City Publishes 2012 Budget

The city has published its proposed 2012 budget, and I feel strongly that it does as good a job as possible as dealing with the pain of declining revenues while still maintaining our vital and first-class city services.

And those cuts are painful.

In all, the city is being asked to deal with $400,000 in declines to state aids for next year, including $259,000 less in shared revenue, $90,000 less in transportation aids and $51,000 less in recycling funds. Combine that with state-imposed levy limits and factors – such as declines expected in other local revenues (such as court fines and forfeitures) – and, like other communities, South Milwaukee is faced with another difficult budget year in 2012.

The published budget addresses those issues head on and does so sensibly and responsibly. Check it out on the city website here.

The budget calls for a levy increase of 2.55%, which meets the state-imposed limits. Most of the levy increase for 2012 comes from increases in debt payments — in large part due to the large borrowing the council approved earlier this year to fund various public works and other projects — as our new construction in 2010 was minimal.

Here are some other details from the document:

• Expenditures are budgeted to increase 0.19%, from the $19,158,798 budgeted in 2011 to $19,195,772 in 2012. This keeps the city well under the cap needed to receive our additional “expenditure restraint” payment from the state – expected to be $350,680 in 2012.
• Revenues are projected to decrease 3.66%, from $9,759,251 to $9,401,701.
• The proposed budget balances in part due to an anticipated $193,238 transfer from the non-lapsing fund to “buy down” the amount of the 2012 levy. This follows a similar $160,000 transfer budgeted in 2011 and $195,000 transfer in 2010.
• The budget reflects no layoffs. Staffing levels remain the same as in 2011.
• Due to the number of employees that have indicated that they will retire in 2012, the cost for retiree health insurance has increased.

Tax rate information won’t be available until November, although it’s safe to assume that the rate will go up to address declining home values due to this year’s revaluation. The increase in the final size of your tax bills, however, should be reasonable … and I am OK with reasonable, especially in these times of increasing city budget pressures.

Of course, there is still a big budget variable for 2012.

The 2012 budget assumes a 0% salary increase for all union and non-represented employees. And it assumes all employees – including those in our police and fire unions, which were not touched by the collective bargaining limits imposed by the state legislature earlier this year – will begin contributing 12% toward the lowest cost qualified health care plan and 50 percent of the cost of their pension (or about 5.8% of their earnings).

The police and fire union contracts expire December 31, and it remains to be seen what negotiations with those unions will yield. I’ll keep you posted.

Our contract with AFSCME, meanwhile, expires June 30, 2012, and employees represented by those unions will begin paying the higher health care and pension costs then. Non-represented employees began paying the higher pension costs earlier this year, and the higher health insurance contributions for those employees will kick in in January.

So some of the “tools” given communities through the “budget repair bill” passed this spring are working – but, as expected, they aren’t nearly enough to make up for the other shortfalls and unfunded mandates passed on by the state legislature.

This budget reflects that reality.

Of course, I wonder what you think of the budget. Please post your comments below.

And don’t forget you can weigh in on the budget at a public hearing Nov. 28. The City Council is expected to vote on the budget on Nov. 29.