Waukesha Could Lose $1.5 Million in State Aid

The City of Waukesha potentially stands to lose about $1.5 million in state aid for the 2012 budget under Gov. Scott Walker’s 2011-13 executive budget, City Administrator Lori Luther said.

Walker’s budget summary, which reduces aid to local government bodies by $1.25 billion, states that the budget repair bill puts tools in place for local governing bodies to make up the difference in increased payments to the health care and pension costs.

However, for the city’s 2012 budget, that won’t be enough.

“We know that the repair bill and increases to the pension fund for our non-represented employees would generate less than $300,000,” Luther said. “If the public safety employees continue to be carved out of that repair bill, the amount that city would stand to receive from employee contributions to the pension will not be sufficient to fill the gap created by the loss of state revenue.”

One of the reasons for that is the city employees already contribute toward their health-care costs. The current contract includes increased payments toward premiums and co-payments. In 2012, Waukesha employees will be contributing between 8 percent and 10 percent toward the premium costs.

“Going up to 12 percent, as I believe is suggested in the repair bill, won’t necessarily help us as much as other communities where their employees might not be contributing a higher percentage already,” Luther said.

While Walker’s budget and budget repair bill are being enacted to address the state’s budget shortfall, local government agencies will not be allowed to make up the difference by increasing property taxes.

The only way a government agency can increase the total amount of taxes collected each year is if it is offset by new development. The city’s 2011 executive budget offered exactly that but then was further sliced to the 2010 tax levy – which did not have the increased property values – by the Common Council at the request of Mayor Jeff Scrima.

Because the city actually lowered the taxes paid by average residents this year, it places the city in a worse financial position as it tries to bridge the budget deficit gap in 2012. Municipalities who did raise taxes in 2011 will have more funds to work with in 2012 than those that kept property taxes flat.

Luther told the Common Council on Tuesday that she has met with the city’s finance director, Scrima and Finance Committee Chairman to discuss a variety of scenarios to fix the budget gap.

“Our budget process starts now,” Luther said. “I do think that there are some significant policy decisions that our community and cities across the state are going to have to face regarding service delivery.”