EDITORIAL

Jul 29, 2010 — The Leader-Telegram

Jul. 29, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- A quick glance at a nonpartisan group's report on taxes and spending by Wisconsin communities points to a challenge faced by Eau Claire and most other cities and villages heading into this fall's budget deliberations for 2011.

The report, MunicipalFacts10, compares Wisconsin's 237 largest cities and villages with others of similar population in a number of taxing and spending categories.

One of the lines that jumps out is that the amount of state shared revenue -- primarily income and sales taxes -- returned from Madison to Eau Claire was essentially flat from 2004-08. In 2008, Eau Claire received $131.40 per person in state shared revenue, up only 12 cents from the amount per person received in 2004. Incidentally, that $131.40 per person is about $11.50 less per person than the median for the 23 peer cities with populations between 30,000 and 150,000. Eau Claire's estimated population in 2008 was 65,362. That means if Eau Claire received the median amount of shared revenue in 2008, roughly $750,000 would have been added to the city budget.

Unfortunately, the Legislature faces a roughly $2.5 billion hole in its budget come next summer, so we can't expect much help from Madison.

The City Council is limited by the state to raising the tax levy by no more than 3 percent to cover the 2011 budget. Eau Claire's municipal tax levy went up 2 percent a year ago, according to the WTA study, well below the average 5.3 percent levy increase between 2006 and this year.

The WTA study shows Eau Claire to be within the median range in most categories compared with our peers, although we did trend upward in some categories in 2008 compared with the year before. For example, net per-capita operating spending in 2008 here was $976, putting us above the median for our peer cities ($901). The year before, Eau Claire spent $29 below the per-capita median ($820 versus $849).

Overall, the city's finances continue to be managed well within the range of our peers. Our 2010 city tax rate, for example, was $7.62 per $1,000 of property value, compared with the peer average of $7.87, and our municipal levy per person of $491 is below the peer average of $569.

But the strain on taxpayers is a concern. Net spending on operations per person increased an average of 7 percent here between 2004-08. That's more than twice the average 3.3 percent annual increase in the Consumer Price Index during the same period.

Although the City Council has limited control over increases in insurance, fuel and utility costs, it must bear down as much as possible on areas it can control to avoid a further widening of the gap between the growth in government and the growth in taxpayers' incomes.

- Don Huebscher, editor

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For buy a copy of MunicipalFacts10, call 608-241-9789. The cost is $17.95 plus tax.

The issue: A watchdog group releases its annual study comparing municipal taxes and spending.

Our view: Eau Claire continues to rank in the middle of its peer group, but another tough budget year looms.

Newstex ID: KRTB-0398-47428979