State Municipal Aid to Falls Will Drop By 50 Percent

The Legislative Fiscal Bureau on Tuesday released a series of memos crunching the numbers in Gov. Scott Walker’s 2011-13 budget and its impact on aid to local municipalities.

Menomonee Falls will see its general state aid slashed by 50 percent, and another 15 percent shaved from state transportation aid. Even though employees will pitch in 5.8 percent toward their pensions, Falls will still see a net loss in the general revenue fund.

The way the numbers shake out in the reports, Menomonee Falls can plan for an approximately $200,000 overall reduction in general fund revenue. That’s the difference between the cuts in state transportation aid and general municipal aid, and the additional revenue generated from employee contributions to their pensions.

Menomonee Falls has trimmed its total operating costs by 20 percent over the past several years, and now state funding cuts will require the village to find cost-saving opportunities in what is already a streamlined organization.

“I don’t think people are always aware, based on how they see our operations on the street, that we’ve almost cut 20 percent of our organization already,” Village Manager Mark Fitzgerald said. “There are not a lot of things we can to do in terms of further reductions. We’ll have to find ways to work within the parameters and we have to save every dollar we can, and live within our means.”

The budget does not allow local municipalities across the state to raise the tax levy in order to offset losses in aid. The levy can only increase if there are substantial construction projects in a community.

According to the LFB, aid to cities, villages and towns around the state will drop $59.5 million in 2012. Menomonee Falls received $559,000 in aid for 2011, and in 2012 the village will receive $279,000.

Walker’s budget proposal would also remove $32.9 million in transportation aid throughout the state in 2012. Menomonee Falls will see its aid drop $259,000, or 15 percent. Fitzgerald said the village would continue its yearly road maintenance plan despite the reduction in aid.

“We will try very hard so that it won’t have an impact on our road maintenance work because we can’t let that be impacted,” Fitzgerald said. “We’re almost always fighting in catch-up mode because of how quickly roads deteriorate in Wisconsin.”

However, the LFB report indicates $440,000 of additional funds will be freed up after employees — not including policemen or firemen — pay 5.8 percent more into their pensions. Fitzgerald said this figure is closer to $425,000 since the LFB reports included utility employees that shouldn’t have been.

The village will also lose a $95,000 recycling grant from the state in the proposed budget. However, Fitzgerald has said the village will continue the program.

The state budget is still in the early works, and much can change as it makes its way through public hearings and the Legislature before approval. Fitzgerald said the LFB reports offer a worst-case scenario of how the village budget will be impacted. He said staff will begin planning a rough sketch of the budget using these figures.

“We can at least start planning based on these numbers. My sense is is that they likely won’t get worse,” Fitzgerald said. “We’ll work through it. That’s what we are charged to do.”