2 Wisconsin Cities Face Similar Budget Troubles

Two cities on opposite sides of the state — Superior and Beloit — are facing similar decisions on how to balance their budgets while at the same time, keeping money stashed away for when they need it most.

Both municipalities are cutting about 1 percent from their budgets next year.

Superior Mayor Bruce Hagen said that his city is doing so in order to build up their reserves. Hagen said Superior’s roughly $27 million budget may face a $1 million deficit in the next five years if revenues stay the same.

“The reserves will help soften the deficit when and if we get to that point,” said Hagen. “As that discretionary portion of funding continues to be reduced, then you have to look at the draconian decisions of (cutting) services, staffing and so forth.”

Added Hagen: “We’re not an anomaly. This is happening everywhere, and it’s just part of the time and philosophy of state government that they want to keep reducing and eliminating local control.”

As for Beloit, Eric Miller, the city’s finance and administrative director, said they’re trying to maintain what they have in reserves. The city has a policy to keep at least 25 percent of its annual $30.5 million budget in Beloit’s fund balance.

“We’re getting pretty close,” said Miller. “We had a couple of bad winter years. Just (something) as simple as weather can play a big part in what we either put back in or use in our reserves each year.”

Plus, if city reserves drop below that level, Miller said that could adversely impact their bond rating and ability to borrow money.

Jerry Deschane, executive director for the Wisconsin League of Municipalities, said a slow economic recovery is making it difficult for some cities to grow, which is the only way they can increase property taxes under state-imposed levy restrictions.

“It’s still pretty tight out there, and it would not surprise me if quite a few municipalities were dipping into reserves this year,” said Deschane.