LOCAL GOVERNMENT IN-SERVICE
DECEMBER 15-16, 2011
In-Service Design Committee:
Alan Probst
Local Government Center
Steven Deller
Ag & Applied Econ
Kate Lawton
Local Government Center
Craig Maher
MPA Program
UW-Oshkosh
LOCAL GOVERNMENT IN-SERVICE
DECEMBER 15-16, 2011
Objectives:
 Outline a model for local government finance as a subset of
the core competency
 Overview of current conditions
 Overview of a “take home” educational program for local
elected officials
 Overview of additional needs
LOCAL GOVERNMENT IN-SERVICE
DECEMBER 15-16, 2011
Day I
Noon-1pm:
Box Lunch and introductions
1-1:30:
What is happening at the state level as it pertains
to local governments?
1:30-2
Types of local governments in Wisconsin
2-3
Major revenue and expenditure trends for counties and
municipalities.
Objective: move elected officials from looking only at last year’s budget when
setting this year’s budget. Focus on elected officials needing worry about the “big
picture” and not the day-to-day details. (analogies, the Board of Directors setting
general directions, or Generals thinking about the big picture).Plans is to put the
template on-line
LOCAL GOVERNMENT IN-SERVICE
DECEMBER 15-16, 2011
3-3:15
Break
3:15-4:30
Making the case for why public finances matters to CNRED
Karl Green – Housing
Pat Malone – County jail
Arlen Albrecht – Local towns
Art Lersch – Visioning with local governments
The “talking points” to be addressed:
 How was a request for technical information turned into an educational program.
 Role of the Educator.
 Balance between technical advice and educational programming.
4:30-5:30
How do we engage the community? Annie Jones
LOCAL GOVERNMENT IN-SERVICE
DECEMBER 15-16, 2011
8:30-10:30
How do we analyze and discuss local trends (computer lab)?
10:30-11 Break
11-noon
Local Governance Preparedness Index
Noon-1
Lunch: Dean Rick Klemme
1-2
Local Governance Preparedness Index (continued)
2-2:30
How to move to an action plan for local government elected
officials. Steven Grabow
2:30-3
Review of the “Big P” program
3
Adjourned
LOCAL GOVERNMENT IN-SERVICE
DECEMBER 15-16, 2011
Idea of a “take home” educational program for local elected
officials
 Balance of process and content
 Built in the spirit of the Pulver-Shaffer Community
Economic Analysis program (e.g., Take Charge but for
local governments)
 How do we engage the community in the conversation.
LOCAL GOVERNMENT IN-SERVICE
DECEMBER 15-16, 2011
General Introductions
What do you hope to walk away with from
this in-service?
What is happening at the state level as it pertains to local governments?
Per Capita Income
What is happening at the state level as it pertains to local governments?
State Government Total Tax Rev
What is happening at the state level as it pertains to local governments?
State Government Sales Tax Rev
What is happening at the state level as it pertains to local governments?
Property Tax Rev
What is happening at the state level as it pertains to local governments?
State Government Employment
What is happening at the state level as it pertains to local governments?
State Coincident Index
The Coincident Economic Activity Index includes four indicators: nonfarm payroll employment,
the unemployment rate, average hours worked in manufacturing and wages and salaries.
What is happening at the state level as it pertains to local governments?
Leading Economic Indicators
Jan. ’08 GAO Report:
Growing Fiscal Challenges will Emerge
during the Next 10 Years
“…in the absence of policy changes, large and recurring
fiscal challenges for the state and local sector will
begin to emerge within a decade.”
“Continuing on this unsustainable path will gradually
erode, and ultimately damage, our economy, our
standard of living…”
-David Walker, Comptroller General, January 2008
GAO Report (Jan. 2008)
“Tax receipts would need to rise considerably
faster than historical experience to enable the
operating balance to remain in the historical
range.”
“Substantial policy changes would be needed to
prevent the fiscal decline in the state and local
government sector.”
Long Term Fiscal Gap
• The GAO simulation shows that by the mid2020’s states will be in strong fiscal distress
• Fiscal gap requires a 15.2% tax increase or a
12.9% spending reduction
• Tough choices on spending and tax policy
– Balanced budget requirements
– Bond ratings
Current and Future City and Village
Financial Prospects 2010
Current and Future City and Village
Financial Prospects 1997, 2004, 2007,2010
Quotes from Survey

“I wouldn't say 2007-2010 was particularly stressful, but
2010-2012 will be.”

“Levy limits and maintenance of effort requirements will
ultimately deplete our reserves and force
reduction/elimination of services.”

“Loss of jobs, forced foreclosed properties. Poor economy,
reduced new homes to be built in our TIF district and no
businesses to come to expand into our TIF district.”

“Limited funds based on population, hard to get grant
funding.”
Quotes from Survey Con’t
 “No incurring debt and "good old fashioned home budgeting"
has helped this small municipality to thrive in this challenging
economy.”
 “Wisconsin doesn't provide municipalities another revenue
generating source other than property taxes, user fees,
revenue sharing, and other State aids, the overall financial
conditions of most Wisconsin municipalities will be depressed
greatly for the following reasons: Increased cost of operations
& maintenance; the replacement of aging infrastructure and
the increasing costs associated with it; and the continued cuts
in State revenue sharing and continued imposition of levy”
Quotes from Survey Con’t

“We could have somewhat adequate revenues if the Council would
allow reasonable Property Tax increases.

They required 0% last budget (2010)and are demanding 0% or a
reduction for 2011.

Significant property tax increases in 2008 and 2009 for debt
service intended to respond to a long term infrastructure
maintenance deficit helped address that issue, but that was after
12 years of belt tightening and expanding demands for municipal
services.

Now there is no cushion and the anti tax/fee fervor is as hot here
as anywhere. Yet most everyone wants us to do more...”
What is happening at the state level as it pertains to local governments?
What is happening at the state level as it pertains to local governments?
What is happening at the state level as it pertains to local governments?
What is happening at the state level as it pertains to local governments?
What is happening at the state level as it pertains to local governments?
Type of WI Local Government by Population (2005)
Cities
Villages
Towns
less than 500
129
251
500-999
7
106
480
1,000-4,999
88
127
487
5,000-9,999
33
20
37
10,000-24,999
36
17
4
25,000-49,999
14
3
50,000+
12
Total Number
190
402
1,259
Average Population
16,097
2,055
1,328
Counties
2
3
21
19
27
72
77,174
Wisc Employment (FTE)
Town
City/Village
County
10,000
20,000
2007
2002
30,000
1997
40,000
50,000
Wisc Employment (FTE) 2007
Education Total
Elementary and Secondary Instructional Employees
All Other Elementary and Secondary Education
Libraries
Public Welfare
Hospitals
Health
Highways
Air Transportation
Water Transport and Terminals
Police Protection Total
Police Officers Only
Other Police Employees
Fire Protection Total
Firefighters Only
Other Fire Employees
Corrections
Natural Resources
Parks and Recreation
Housing and Community Development
Sewerage
Solid Waste Management
Financial Administration
Judicial and Legal
Other Government Administration
Water Supply
Electric Power
Transit
All Other and Unallocable
County City/Village
411
0
385
0
26
0
275
2,476
12,194
177
1,214
65
5,457
832
3,662
3,655
371
32
1
16
5,035
9,669
3,645
7,616
1,390
2,053
60
4,549
40
4,343
20
206
3,740
100
597
229
1,227
1,657
62
440
8
1,250
207
1,383
1,374
1,614
3,014
413
1,826
2,121
2
1,631
10
498
1,081
634
1,656
1,564
Town
0
0
0
63
1
0
30
1,337
1
0
323
278
45
254
238
16
0
1
28
3
49
70
356
14
1,046
21
0
0
136
What is happening at the state level as it pertains to local governments?
Limits to the flexibility of Local Governments….
Property Tax Limits (or TELs)
Limits on Fees and Charges
Bankruptcy is NOT an option
Empowering the flexibility of Local Governments….
Cooperative Agreements to provide services
Not at all
Not very much
Somewhat
A lot
Don't Know
Improved productivity through better
management
Contracted out services
7.0
12.3
60.8
17.0
2.9
16.8
33.0
39.9
9.3
1.2
Consolidated departments
42.2
22.5
26.0
8.1
1.2
Pursued regional cooperative agreements
24.4
23.8
40.1
8.7
2.9
Reduced hours for public facilities
51.7
27.0
18.4
1.7
1.2
Eliminated services
Drawn down cash reserves to meet daily
operations
Raised property tax levies
39.5
34.9
24.4
0.6
0.6
30.0
22.4
34.7
11.2
1.8
13.5
32.8
50.3
3.5
0.0
Adopted or increase user fees and charges
12.9
18.7
54.4
13.5
0.6
Created or expanded enterprise funds
39.6
25.4
20.1
5.9
8.9
Pursued grants from federal/state government
4.1
5.3
44.4
46.2
0.0
Refinanced outstanding debt
36.6
15.1
34.3
13.4
0.6
Increased short-term debt
56.5
18.8
20.0
4.1
0.6
Delayed routine maintenance expenditures
17.9
27.2
39.3
15.0
0.6
Delayed capital expenditures
11.6
18.5
39.9
28.9
1.2
Laid off workers
73.4
11.6
13.9
1.2
0.0
Hiring freeze
44.5
12.7
28.3
12.7
1.7
Across the broad budget cuts
28.9
25.4
33.0
12.1
0.6
Targeted budget cuts
12.1
20.8
51.5
15.6
0.0
Response strategies: 2011 Wisconsin Municipality Survey
Response strategies:
2011 Wisconsin Municipality Survey
Bottom line
Municipality have pretty much played out
all the “marginal” adjustments and
“accounting fixes” that are possible;
extended periods of fiscal stress will
necessity structural changes.
Most serious problem?
 Tendency to think in the short-term by local
elected officials….
 ”we set policy by tweaking last year’s budget”
 Tendency to “micromanage” administrators...