1. L OCAL G OVERNMENT I N -S ERVICE D ECEMBER 15-16, 2011 In-Service Design Committee: Alan ProbstSteven Deller Local Government CenterAg & Applied Econ Kate LawtonCraig Maher Local Government CenterMPA Program UW-Oshkosh

2. L OCAL G OVERNMENT I N -S ERVICE D ECEMBER 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

3. L OCAL G OVERNMENT I N -S ERVICE D ECEMBER 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? 1:30-2Types of local governments in Wisconsin 2-3Major 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

4. L OCAL G OVERNMENT I N -S ERVICE D ECEMBER 15-16, 2011 3-3:15Break 3:15-4:30Making 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. 4:30-5:30How do we engage the community? Annie Jones

5. L OCAL G OVERNMENT I N -S ERVICE D ECEMBER 15-16, 2011 8:30-10:30How do we analyze and discuss local trends (computer lab)? 10:30-11Break 11-noonLocal Governance Preparedness Index Noon-1Lunch: Dean Rick Klemme 1-2Local Governance Preparedness Index (continued) 2-2:30How to move to an action plan for local government elected officials. Steven Grabow 2:30-3Review of the “Big P” program 3Adjourned

6. L OCAL G OVERNMENT I N -S ERVICE D ECEMBER 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.

7. L OCAL G OVERNMENT I N -S ERVICE D ECEMBER 15-16, 2011 General Introductions What do you hope to walk away with from this in-service?

8. What is happening at the state level as it pertains to local governments? Per Capita Income

9. What is happening at the state level as it pertains to local governments? State Government Total Tax Rev

10. What is happening at the state level as it pertains to local governments? State Government Sales Tax Rev

11. What is happening at the state level as it pertains to local governments? Property Tax Rev

12. What is happening at the state level as it pertains to local governments? State Government Employment

13. 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.

14. What is happening at the state level as it pertains to local governments? Leading Economic Indicators

23. 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

24. 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.”

25. Long Term Fiscal Gap The GAO simulation shows that by the mid- 2020’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

28. Current and Future City and Village Financial Prospects 2010

29. Current and Future City and Village Financial Prospects 1997, 2004, 2007, 2010

30. 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.”

31. 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”

32. 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...”

33. What is happening at the state level as it pertains to local governments?

45. 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

46. Not at allNot very muchSomewhatA lotDon't Know Improved productivity through better management 7.012.360.817.02.9 Contracted out services16.833.039.99.31.2 Consolidated departments42.222.526.08.11.2 Pursued regional cooperative agreements24.423.840.18.72.9 Reduced hours for public facilities51.727.018.41.71.2 Eliminated services39.534.924.40.6 Drawn down cash reserves to meet daily operations 30.022.434.711.21.8 Raised property tax levies13.532.850.33.50.0 Adopted or increase user fees and charges12.918.754.413.50.6 Created or expanded enterprise funds39.625.420.15.98.9 Pursued grants from federal/state government4.15.344.446.20.0 Refinanced outstanding debt36.615.134.313.40.6 Increased short-term debt56.518.820.04.10.6 Delayed routine maintenance expenditures17.927.239.315.00.6 Delayed capital expenditures11.618.539.928.91.2 Laid off workers73.411.613.91.20.0 Hiring freeze44.512.728.312.71.7 Across the broad budget cuts28.925.433.012.10.6 Targeted budget cuts12.120.851.515.60.0 Response strategies: 2011 Wisconsin Municipality Survey

47. 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.

48. 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...