Village Aid Cuts, Pension Savings Even Out in Budget Deal

A new state agency report shows the amount of state aid and transportation aid stripped from Whitefish Bay this year should be entirely offset by savings from employee pension contributions, but even those numbers do not tell the entire story.

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.

According to the memos, the village will see a total reduction of $222,654 in transportation aid and state aid, but the cuts will be more than offset by a total of $224,600 in savings from employees contributing 5.8 percent of their salary to their pension — a requirement under Walker’s hotly contested budget repair bill, which eliminates many collective bargaining rights for public unions.

The latest reports do not include the amount of recycling grants lost in each municipality, but Interim Village Manager Matt Schuenke said the village will lose $100,000 in grants. The shortfall will have to be accounted for in some way, as the village expects to continue its recycling programs, Schuenke said.

To break down the revenue cuts, the amount of state aid the village receives will drop 50 percent from $234,768 to $117,384. Additionally, transportation aid will decrease by more than $105,000, a 15 percent from $701,801 to $596,531.

Those reductions will be more than offset by pension savings, which total $224,600. The village can expect to save $131,000 due to employee contributions, and another $93,600 in police and fire employee contributions.

Schuenke said the reports do not paint a representative picture of how the village will be affected. He said he expects to only save $100,000 in pension contributions, which would only account for one-third of the roughly $325,000 in overall revenue cuts.

“We expect the employee concessions to cover a third of what has been cut from the revenue stream,” he said.

Along with pension contributions, the budget repair bill also requires employees to pay 12.6 percent to their health benefit premiums, which were also not calculated in the memos.

Schuenke said the Department of Public Works employees, the only unionized department with an approved contract, already pay roughly 11 or 12 percent toward their health insurance, so he said the savings would be marginal in that area. Schuenke said the village will continue to bear more costs of health benefits, as he expects those costs to increase 10 percent this year.

Schunke said more information about the actual cuts and savings will be known once the budget is passed and the village begins its budget process in late July.

“When the fall comes and we have solid numbers, then we’ll start putting pencil to paper,” he said.