Proposed budget would boost OC property taxes by 5 percent

News analysis

Inflation has ripped through the economy, wreaking havoc on residents’ pocketbooks, and the ripple is causing consumers to pay more not only for private sector goods but for public sector services, through higher property taxes to pay for those services’ ever rising costs.

Oneida County is no exception, and as such the proposed 2024 budget approved by the county’s administration committee and forwarded to the full county board for consideration next week would increase property taxes by 5 percent to $19.08 million, about $861,000 more than last year’s levy of $18.22 million.

According to a report prepared by county finance director Tina Smigielski and the county finance department, the tax increase is driven by inflationary costs associated with library support, township bridge aid requests, and supporting other governmental programs within human services.

But headed into the budget meeting, county board chairman Scott Holewinski sounded an alarm this week, saying the county budget as proposed is unsustainable in the long-term without program cuts or personnel reductions through attrition.

Holewinski especially scrutinized the county’s labor expenditures.

“Personnel costs are $30.55 million, or 46 percent, of the total $67 million budget,” Holewinski told The Times this week. “Of that, the increase of wages and benefits increased $3.3 million from 2023 to 2024. I don’t have how much the allowable levy increase for 2024 is, but it is nowhere near our employee personnel wages and benefit increase.”

The last few years show the steep and increasing wage trend lines. In 2020, the county spent $23.92 million in wages and benefits; in 2021, it spent $24.21 million, a 1-percent increase; in 2022, $25.04 million, a 3-percent increase; in 2023, $27.30 million, a 9-percent increase; and the 2024 proposed budget is $30.55, a 12-percent increase.

Moving forward, Holewinski said, personnel costs are out of control and are unsustainable.

“Where will these employee increases come from if we don’t start looking forward and start getting rid of services or not filling positions that occur from retirements?” he said.

Right now, the county’s 2024 budget report shows that inflationary wage and benefit increases are driving those costs up by 12 percent year-over-year, but, to Holewinski’s point, it’s not just inflation keeping costs high, it’s the reluctance of the county board to pare the size of government.

For instance, one good gauge of where government spending and growth are headed is in the employee head count, and, as it stands, the 2024 budget would employ 297.87 full time equivalent (FTE) positions, a slight decrease from the prior budget year’s total of 300.25 and also below the 2022 FTE employment roster of 299.25.

But while the number of full-time equivalent employees is slightly lower than in the last couple of years, over time the county’s government work force has grown significantly. 

In early 2011, for example, the county employed only 285, so this year’s head count is about 4.6 percent more than in 2011.

Holewinski’s refrain is a familiar one — he’s called for cuts for years — but so far the county has refused to make significant cuts in that direction. Holewinski’s predecessor as board chairman, Dave Hintz, was not inclined to cut spending, preferring instead to balance operational deficits by tapping the unrestricted general fund balance for ongoing expenses, an accounting red flag. 

This year, though the county is running an overall deficit, its general fund operating budget balances with $32.24 million in expenditures and $32.24 million in revenues — which Holewinski points out is being achieved without tapping non-recurring monies for recurring expenses.

Whether as chairman Holewinski can ultimately move the county to reducing its size and scope remains to be seen, but that balance is a significant step.

Another significant step is the recent vote to shutter the beleaguered Human Service Center (HSC) and seek to provide those same services another way and more efficiently. The effort to end the contract with the HSC was driven in Oneida County by sheriff Grady Hartman and social services director Mary Rideout, and, while the jury is out on ultimate cost savings, Hartman says he expects the matter to be a win-win for the county, both budget-wise and for those needing the services the agency now provides.

The budget overall

The proposed budget, which was prepared October 24 and which the full county board will take up Tuesday, would spend $66.76 million, paired against revenues of only $64.35 million, a deficit of $2.41 million, which would be balanced by transfers from the county’s unrestricted general fund balance.

The $64.35 million in revenues represents an increase of $4.64 million, or 8 percent more than the previous year.

While the general fund operational portion of the budget balances, the deficit occurs in special revenue funds and in capital projects funds.

Special revenue funds are used to track restricted funds, such as grants, and are currently proposed with an operating deficit of $1.28 million, the budget report states. That deficit would be funded by transferring unrestricted fund balances from the general fund to support roadway reconstruction projects.

The other deficit of $1.13 million is in the capital projects funds, which the report says accounts for the costs of renewal, replacement or acquisition of capital assets.

“The investments in facility and information technology capital projects will be funded by a transfer of unrestricted fund balance from the General Fund,” the budget report states. “The proposed transfer out of the general fund is 33 percent of the balance available for such funding options per the county’s stabilization fund policy.”

The budget was fashioned in October after county agencies submitted budget requests for the upcoming year and during the administration committee’s budget hearings. The budget hearings resulted in approximately $1.4 million in cost-cutting and revenue modification measures, the finance department calculates.

The tax rate con

While in absolute numbers taxpayers will pay about $861,000 more in taxes, the tax rate for every $1,000 of equalized value will drop by 14 percent, or about 28 cents to $1.73 from $2.02.

Officials usually like to tout a falling tax rate as a sign of fiscal responsibility, even when taxes are actually rising as they are in Oneida County, but Holewinski said taxpayers should not take the bait if that line is used.

“Don’t be fooled by the tax rate going down,” he said. “The state raised our equalized valuation by 22 percent which includes new construction certified by the DOR on August 25th each year.”

That growth translates to an equalized valuation of $11.01 billion, up from $9.04 billion.

As Holewinski noted, much of the tax increase owes to the mounting costs of maintaining nearly 300 full-time equivalent employees. In 2023, across all functional categories, personnel related expenses made up between 42 percent and 44 percent of planned expenditures, and this year’s proposed 2024 budget leap would inhale 46 percent of planned expenses.

Another big reason for the looming tax increase is local bridge aid, which this year is being paid by the tax levy. While inflationary pressures are causing the library levy to rise by 4 percent and social services/ADRC fund by 5 percent (and EMS general fund expenses are actually declining by 8 percent, or $218,947), bridge aid is costing $875,000 compared to no levy dollars applied a year ago.

“There are some things that are omitted from levy limits,” Holewinski said. “One is town bridge aid. The towns submit to the county by a certain day each year for 50 percent matching funds for culverts over 3 feet in diameter. This money is assessed to the whole county.”

The tax allocation bridge aid for Minocqua alone is $233,977.

When it comes to revenue, an ongoing bright spot for Oneida County has been its sales tax collections, which, in an era of continued consumer spending despite high inflation, has been robust. The finance department cites Wisconsin Counties Association forecasts in projecting that those collections will remain at record high levels next year.

Otherwise, with the exception of shared revenue, revenues are tending toward the flat line.

“Overall, intergovernmental revenue is flat over the prior year; however, a significant change due to recent legislation by the state of Wisconsin is increasing Oneida County’s disbursement of shared revenue,” the budget report states. “Licenses and permits, a relatively small revenue for the county, is estimated to be lower than the prior year budget.”

Fines, forfeitures and penalties are projected to stay flat compared to the prior year, the report states, with departments estimating those revenues to be more in line with year-end estimates than prior year actuals.

And while there is significant growth in public charges and intergovernmental charges, the report attributes those mostly to the highway department’s charges to other departments, local governments, and the state of Wisconsin to provide services such as roadway projects and snow removal.

“Intergovernmental charges, which include housing of state and other locality inmates, is budgeted to increase over the prior year,” the report also states.

Finally, with respect to revenues, interest income on invested cash balances is the reason for an increase in miscellaneous revenues, linked to higher interest rates.

Expenses

On the expenditure side of the ledger, total expenses are proposed to be $66.74 million, a 9-percent or $5.45 million increase compared to the prior year’s budget.

“Public works is slated to be the highest spending category at $15.85 million followed by public safety for $15.77 million, general government for $14.66 million, and health and human services for $11.54 million,” the report states. “These categories account for 87 percent of the overall budget.”

Public safety and public works are up 13 percent and 14 percent respectively as compared to the prior year, and the report tracks those significant increases also to inflation — both increased costs of labor and inflationary impacts on contracted services.

Overall, the report states that general government spending is lower than the prior year budget due to American Rescue Plan Act (ARPA) projects winding down since the program was initiated in 2021. Human services spending is down less than 1 percent, the report states, the slight decrease also reflecting the decrease in pandemic related state and federal funding.

The county has plans to spend about $4 million in capital improvement projects, Holewinski says.

“We are still using the American Rescue Plan Act with a total of $6.9 million for capital projects which began in 2022 and continue into 2024,” he said. 

According to the budget report, the capital improvement projects committee is recommending a capital budget of $3.98 million for 2024.

“The funding sources for the Capital Budget include $2.41 million in transfers from General Fund unrestricted fund balance, a $1.20 million loan to the Highway Department from General Fund unrestricted fund balances, $302,000 in departmental funds, and $66,000 in other funding,” the report states. “It should be noted that the transfers from the General Fund do comply with the County’s Stabilization Fund policy, adopted via Resolution # 95-2022.”

As reported, the county is trimming personnel ever so slightly. More specifically, the report states, the clerk of courts has eliminated a vacant deputy clerk position in small claims; the finance department has replaced a full-time staff position with a 60 percent position; and both zoning and public health have eliminated limited-term positions that were either unfilled or for which grant funding had expired.

In other moves, the land information and register of deeds offices moved a previously shared position between the two departments into a full time position in land information. And the sheriff’s department is will receive a new technical support position to be funded from the tax levy, while social services is requesting a new economic support position using grant funds.

Public safety

The agency taking the largest tax bite is the sheriff’s department and EMS. Of the $19.08 million being proposed, the sheriff’s department and EMS together would tap taxpayers for $13.14 million, a little more than two-thirds of the tax levy. 

The $13.14-million levy represents a 10-percent increase over the 2023 sheriff’s/EMS levy. As the budget report states, much of that is due to inflationary pressures on contracted services.

At October budget hearings held by the administration committee, sheriff Hartman, chief deputy Dan Hess, and the agency’s office administrator, Jill Butzlaff, detailed those increasing costs at length, pointing to needed budget increases to cover rising costs for telephone and fax, automotive equipment, medical services, catered food, and jail supplies. 

There has also been costs for mental health services that were previously offset by a rebate received from the Human Services Center, the department reported, though in October the sheriff’s department reported that it had not been received for 2024.

The department was also continuing to struggle with staffing levels, especially in the jail, Hartman reported to the committee. 

Hartman told the committee the jail continues to house up to 30 Dane County inmates and up to 70 state inmates.

In his report to the committee, as outlined in the meeting minutes, Hess said the department was anticipating inmate revenue of $900,000 to $1.2 million for 2023, while Butzlaff reported that for 2024 the department had  budgeted for $550,000 in prisoner revenue with $450,000 of that being used for expenses. 

That prompted questions from the committee, specifically from Holewinski and administration committee chairman Billy Fried, who questioned why the sheriff’s office wasn’t budgeting for a higher amount in inmate revenues. 

The sheriff cautioned against budgeting for the maximum amount expected because it was not a guarantee. That was a mistake that was made in the past, he said, pointing to 2006 when the county lost the state inmate contract, creating a budget hole of $900,000 that led to furloughs and costly cuts.

In the end the administration committee decided to roll the dice anyway and increased the budgeted inmate revenue from $550,000 to $1 million, an increase of $450,000. 

Elsewhere in the public safety budget, Hartman told the committee that in 2024 the department wanted to purchase two ambulances and in 2025 one ambulance, the minutes report. The sheriff said his agency has increased ambulance revenues by $380,000 through negotiations with surrounding municipalities.

This week, Hartman told The Times that, overall, he is pleased with 2024 budget. 

“We were relieved that the county board approved our additional technical support position,” he said. “The influx of methamphetamine into the county has created significantly more reports and significant arrests. With those arrests and calls for service come extra reports from the deputies, open records requests, discovery for the district attorney/defense attorneys and managing the data.”

As for the contracts with Dane County and the state to house inmates, Hartman says he’s optimistic that those contracts will be stable in 2024 ,and he pointed out that, while public safety is an expensive and core proposition of county government, the inmate revenue is beneficial to the county’s bottom line: “We should be able to make a significant positive contribution to the budget with that revenue.”

But, as he told the administration committee in October, filling and retaining positions remains difficult.

“Recruitment and retention continue to be a struggle at our office,” he said. “I’m thankful the county board adjusted the wages and will hopefully help us fill our vacancies, especially in the jail.”

Richard Moore is the author of “Dark State” and may be reached at richardd3d.substack.com.