Janesville city manager warns about next budget cycle in State of City address

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Elliot Hughes
Friday, January 29, 2016

JANESVILLE—City Manager Mark Freitag spoke positively about 2015 and the year ahead during his State of the City address Thursday, but he suggested tough times lie ahead for the city.

Freitag said the city is projected to have a $800,000 shortfall to deal with when it begins its 2017 budget deliberations this fall. He said that gap is large enough to prompt conversations of whether the city “can continue to be a municipal government that provides the full spectrum of municipal operations and services.”

“We're getting to the point where it's going to be very, very painful,” he added.

Budget shortfalls are nothing new for Janesville. In the past two years, city officials have figured out ways to swallow deficits that were about half the size of the $800,000 chasm that's predicted for 2017.

“We're so lean now, it's hard to imagine what we can give up,” council member Kay Deupree said after Freitag's remarks.

City officials have long been frustrated by the way the state government controls some its revenue streams.

State shared revenue formulas award Janesville $5.12 million annually, which is about $5 million less than the average amount given to 15 other Wisconsin cities of comparable size. A cap on increasing property taxes and a ban on municipalities implementing a sales tax also limits options.

Freitag said the city can't keep up with inflation with those restrictions.

“I feel his (Freitag's) pain for the city,” said state Rep. Debra Kolste, D-Janesville.

She has said before that the state shared revenue formula should be changed, but there is not enough interest in Madison to do so.

Freitag said a community discussion should begin as soon as possible. He pointed to a city council listening session scheduled for 6 p.m. Thursday, Feb. 11, at Kennedy Elementary School as an opportunity for residents to talk about what “they can and can't live without.”

Up to 40 people attended Fretiag's speech at City Hall on Thursday. The crowd also featured several other council members and spring election candidates. State elected officials such as Andy Jorgensen, Janis Ringhand, Mark Spreitzer and Stephen Nass and a representative of U.S. Sen. Tammy Baldwin's office also attended.

Freitag spent much of his 45 minutes at the podium recapping accomplishments in 2015 and outlining 2016 developments. Among many mentioned, he said he was proud of the way the city has handled a wave of retirements and that the city retained its AA bond rating from Standard & Poor's.

He said he looked forward to continuing the downtown's revitalization in 2016 by exploring the creation of a business improvement district, switching Milwaukee Street to a two-way road and beginning the demolition of the parking plaza that straddles the Rock River.

He also said he was happy with the city striking seven tax increment financing deals in 2015, which created 1.48 million square feet of new space and 831 new jobs. Together the deals are worth $90 million.

More of that is believed to be on the way in 2016 as well. Freitag said three new TIF deals are close to being finished. Together they would create 299,000 square feet of new industrial space, 30-plus jobs and be worth $11.9 million. He said they could be ready for the council's review in two months.

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