Build Your Own Budget Worksheet
Welcome and thank you for taking part in the City of Madison’s second annual “Build Your Own Budget” workshop. You are the M ayor and must balance the City’s 2007 operating budget. These workshops are designed to help City residents and taxpayers gain a better understanding of how Madison’s budget is assembled. The following worksheet provide you with a menu of options. Any budget gap created by new spending or cost increases must be offset by a combination of cuts or revenue increases. For each item, note your recommendation in the appropriate boxes. To be balanced, you must close your budget gap and your Grand Total must be $0 or less. Good luck!
Step 1: Pick your levy target
The City Comptroller has provided you with a summary of current levy revenues and spending. He has also provided you with a “cost-tocontinue” increase generally based on several assumptions and estimates for several formulaic spending increases. Examples include increasing health insurance costs, wage settlements, fuel prices and so forth.
Levy Spending Base spending for 2006 Cost-to-continue increase Total Levy Spending $136,000,000 $12,000,000 $148,000,000 Levy Revenue Base revenue for 2006 Target levy increase (see table below and enter value) Total Levy Revenue Target - $136,000,000 -$ -$
Pick your target levy increase to enter above:
Increase on the levy Flat revenues (0% increase) 1% increase Inflation (3.8%) 15-year average increase (5.6%) State levy limit (6.2%) Full-funding to cover $148 million (8.8% -- prohibited by levy limit) Resulting revenue increase $0 $1,400,000 $5,200,000 $7,600,000 $8,400,000 $12,000,000
Note: Every $1 million added to the levy equals a $12 property tax increase for the average home.
Calculate your starting budget gap:
Total Levy Spending (base plus cost-to-continue) Total Levy Revenue Target (base plus increase) Starting Budget Gap (spending less revenue) $148,000,000 -$ $
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Step 2: Select New Spending Requests
City agencies have presented several new spending initiatives and proposals to increase funding for various programs. Some requests expand existing services; others are needed to maintain current service levels. Each of these items is positive because they add to your budget gap. Select those items you wish to fund.
New Spending and Related Benefits Police: Hire additional police officers to improve 911 response times, especially to the city’s periphery. Police: Buy new squad cars. The department typically uses one car for four officers. Police: Upgrade one police officer to detective and one to inspector. Detectives work on complex cases and gang issues. Inspectors collect forensic evidence at crime scenes. Police: Promote 13 police officers to supervisory status like sergeant, lieutenant, parking supervisor or additional detectives. Some of the upgrades would occur in November, which increases total costs the following year. Fire: Train a recruit class of 10 fire fighters to fill anticipated retirements. Trainees are paid during this 14-week course. Fire: Solicit applications for a future pool of recruits which is good for two years. Funding is for test validation and outreach. Fire: Upgrade firefighters to paramedic status. These positions will increase the pool available for rotation on ambulances. Fire: Promote seven fire lieutenants to captain and authorize an additional captain and division chief Parks: Reinstate 2005 policies for mowing of medians and parks Metro: Provide uniformed police officers on buses on an asneeded basis Levy Impact $50,000 per officer (Police Dept has requested 10 new officers) $50,000 per squad (Police Dept has requested 4 new squads) $17,000 Recommendation (positive number)
$70,000
$230,000
$120,000
$13,000 per upgrade (Fire Dept has requested 9 upgrades) $270,000
$75,000
$10,000
Continued…
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New Spending and Related Benefits Planning & Development: Hire a consultant to update the City’s economic development implementation strategy. The last time the plan was updated was the early 1980’s. Community Services: Increase funding for financial assistance to help eligible parents pay for child care. This represents a 10% increase. Community Services: Provide an inflationary increase for programs such as teen suicide prevention and homelessness assistance Community Services: Increase funding for community programs and centers. This would expand existing or create new program funding. Engineering: Create an “energy issues engineer” to support Citywide energy conservation efforts Other new spending Subtotal of New Spending (from this and previous page)
Levy Impact $50,000
Recommendation (positive number)
$50,000
$112,000
$250,000
$71,000
$
Starting Budget Gap (from Page 1) = New Spending Subtotal (from above) = Gap After New Spending =
$________________ + $________________ (Remember: Spending increases are positive because they add to your budget gap) $________________
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Step 3: Adopt Proposed Cuts
Anticipating revenue limits and high cost-to-continue increases, you have directed your program managers to identify possible cuts to help close the gap. Each of these items is negative because they will reduce your budget gap. Select those cuts you wish to adopt.
Spending Cuts and Possible Implications Parks: Eliminate eight positions primarily responsible for maintenance and upkeep of parks. Streets: Reduce standard to send out snowplows from 3 inches of snow to 4 inches, reduce night-time sanding of side streets, and reduce funding for clearing of snow and ice from crosswalks. Streets: Eliminate graffiti removal program which currently discourages gang activity and blight Streets: Eliminate program for removing stumps from street terraces. Residents would be responsible for stump removal. City Channel 12: Eliminate Closed Captioning for coverage of council and committee meetings, public hearings, etc. Human Resources: Eliminate funding for classified employment advertisements in local/community publications. Only major area newspapers would run City job openings. Health: Reduce funding for the following contract programs: $12,000 from Harambee $26,000 from AIDS Network $66,000 Access Community Health Center $15,000 from Safe Communities Coalition Community Services: Cut funding from several community programs on a priority basis. Levy Impact $403,000 Recommendation (negative number)
$285,000
$73,000
$118,000
$10,000
$19,000
$119,000
$93,000
Continued…
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Spending Cuts and Possible Implications Traffic Engineering: Eliminate funding for seasonal employees that repaint crosswalks, turn arrows and speed humps. If repainting is delayed too long, traffic safety could be compromised. Libraries: Cut expenditures for new books and materials. Fewer new materials can reduce availability and adversely impact the library’s circulation. Libraries: Cut funding for hourly staff. Service hours would be unchanged, but circulation would backup and customers may experience delays. Other spending cuts Subtotal of Spending Cuts (from this and previous page)
Levy Impact $123,000
Recommendation (negative number)
$110,000 per 10% reduction
$80,000 per 10% reduction
$
Gap After New Spending (from page 3) = Cuts Subtotal (from above) = Gap After New Spending and Cuts =
$________________ - $________________ (Remember: Spending cuts are negative because they will reduce your budget gap) $________________
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Step 4: Identify Any Additional Revenue Increases
The City charges fees for various permits, licenses and services. It also collects revenue from fines like parking violations. Each of these items is negative because they will reduce your budget gap.
New Revenues Increase parking ticket rates. (Note: higher rates may reduce violations, and thus revenue gains) Institute a solid waste fee to pay a portion of the costs associated with collection and disposal of refuse. A flat fee would be paid by households, businesses and nonprofits. Institute a new fee for delivering semi-truckloads of woodchips to area farms, other municipalities and Dane County dog parks Increase fees for the processing of police records such as fingerprinting, records checks, etc. Other new revenues FUND BALANCE: Use a portion of the city’s “rainy day” fund (current balance is $26 million). Subtotal for New Revenues Note: using more than $500,000 may harm the city’s AAA bond rating $ Levy Impact $440,000 for every 10% increase Recommendation (negative number)
$1,000,000 for every $20 charged to each user of municipal refuse collection
$40,000 based on a $100 per truckload delivery fee
$6,000 for every 10% increase
Gap After New Spending and Cuts (from previous page) = New Revenues Subtotal (from above) = GRAND TOTAL = (Reflects gap after new spending, cuts and new revenue)
$________________ - $________________ (Remember: Additional revenues are negative because they will reduce your budget gap) $________________
Your Grand Total must be equal to or less than zero. If it is a positive number greater than zero, additional funding or cuts must be identified to balance the budget. Page 6