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Community columnist: Walworth County budget on target, even in poor economy

By David Bretl, Walworth County administration

The 2011 budget process is under way in Walworth County. On Sept. 9, I released the first draft of the proposed spending plan, known as the county administrator’s budget. During the next three months, the 11 board supervisors will modify it with the aim of having a budget in place after their Nov. 9 meeting. The proposal calls for a tax levy increase of 2.88 percent. This was in line with a planning target established by the board earlier this year. Last year the levy rose by 2.89 percent.

Each year I focus on a number of themes that figure prominently in preparing the spending plan. Not surprisingly, one of last year’s budget themes, local effects of the national recession, was repeated as a theme, again, for 2011. I recently read a report that the National Bureau of Economic Research determined that the recession officially ended in June of 2009. While this may be technically correct, the poor economy continues to impact county government. Several local measures confirm that the economy is far from recovered.

• Equalized value. Equalized value represents the fair market value of all taxable property in the county. For the first time in recent history, equalized value declined in Walworth County from the previous year. While property values had already turned negative statewide, in 2009, Walworth County defied the trend with a modest increase of 1.22 percent that year. In 2010, we were not as fortunate. Equalized value declined 3.59 percent. This actually exceeded the average state decrease of 3.1 percent, erasing nearly half a billion dollars of equalized value in the process.

• Unemployment. It is hard to believe that just two years ago, the county’s unemployment rate stood at 4 percent. By July 2009, that figure had risen to 10 percent. As of this past July, 9 percent of all workers in the county have no job.

• Economic activity. Sales tax revenue declined by $1 million from its 2008 high of $8 million. The number of real estate documents recorded by the register of deeds, likewise, declined from 50,000 in 2003 to fewer than 30,000 in 2009. While not a perfect measure of home sales, fewer deeds and mortgages being recorded means lower home sales and less new construction taking place in the county.

The above-stated factors have a three-fold impact on the county budget. First, the economic downturn has touched nearly everyone. Those not affected directly, through unemployment, have experienced a decrease in the value of their homes and investments. Homeowners are having a harder time paying taxes. Those who are still employed are understandably concerned about their own economic futures. Secondly, the county has experienced a loss of revenue as a result of the sluggish economy. In addition to its half-cent share of the sales tax, the county receives fees for recording real estate documents and issuing zoning and sanitation permits. These revenues offset the need to levy property taxes. Third, increased unemployment increases the demand for certain county services. Caseloads within our human services department, for example, have increased as residents struggle to deal with poverty-related issues.

The county had some help in reaching its budget target. For the first time in recent memory, we are not budgeting for an increase in our health insurance costs. Employee premium contributions, plan design changes and a certain amount of luck, in terms of our claims experience, contributed to the 0 percent increase. Debt service decreased by more than $1 million as the county continues to pay off bonds that were issued to finance the construction that has taken place in recent years. Finally, the levy associated with the county’s special needs school, Lakeland School, has decreased for the third straight year as a result of a 10-year plan to transition certain special needs education programming back to the school districts.

We probably won’t see a repeat of these three factors in the 2012 budget. It also seems likely that we will see reductions in grants and aid from the state of Wisconsin in 2012 and beyond. At some point the federal government will stop propping up the state budget. The state’s most probable recourse will be to share its “pain” with local units of government; therefore, while we were able to achieve our 2011 budget goals, we need to look beyond the upcoming year. Labor costs will remain our greatest challenge. The 2011 administrator’s budget proposes to eliminate 6.3 full-time equivalent positions. More reductions will be needed, however, to ensure that taxes remain affordable to county property owners.

The annual budget determines not only the amount of taxes property owners will pay, but also what services will be provided in the coming year. Our county is typically one of the first in the state to release its proposed spending plan. The earlier start permits greater public input in the final product.

Anyone interested in learning more about the proposed budget can view it on the county’s website, www.co.walworth.wi.us. For those wishing to comment on the proposal, a public hearing is scheduled for Nov. 1. The hearing will be held at 6 p.m. at the Walworth County Government Center in Elkhorn.

Dave Bretl is the Walworth County administrator. Contact him at (262) 741-4357 or visit www.co.walworth.wi.us.

Read this column in the Oct. 3, 2010 e-edition of Walworth County Sunday, HERE.