Tuesday, September 7, 2021
In 2021, the county has budgeted to spend $106 million dollars. That money is spent on things like highway maintenance, law enforcement, human services, parks, and staffing county offices.
The four largest sources of revenue for the county are property taxes ($32 million), sales taxes ($10 million), user fees ($10 million), and state and federal government ($27 million).
This year and next, because of the American Rescue Plan Act (ARPA), we’ll be getting an especially large boost from the federal government — about $6.25 million this year and another $6.25 million. That's a substantial increase in our funding, but the purposes for which the money can be used are tightly regulated.
With that kind of money at stake, the county — just like a private business — needs a carefully planned budget.
PREPARING THE BUDGET
A budget is prepared for the county each calendar year. Preparation of the budget is pretty much an all-year task. When the county begins living under its current budget each January, it starts at the same time to plan a budget for the next year.
Budgets bubble up from the county departments. We’ve got over thirty departments in the county, including — among others — departments for administration and finance, law enforcement, information systems, public health, and human services.
Each year, each of those departments figures out its financial needs for the next year. It estimates the costs of staffing, equipment, supplies, travel — everything it will need to spend in order to carry out its mission.
Each department is overseen by a committee of the Board of Supervisors, and that subcommittee, together with the department head and the county’s Finance Administrator, work together to hammer out a budget for the department.
Those departmental budgets are then assembled and presented to the Board’s Finance Committee, and it’s the job of that committee to come up with a county-wide budget that can be submitted to the entire Board in October.
A sound budget is good for the county’s credit rating.
Of course, spending needs can’t be assessed in a vacuum. The Finance Committee also has to determine what revenue the county can expect in the coming year.
For the most part, revenue comes from four sources:
Property taxes: the county’s portion of property taxes is about one-third of the total tax. While the county has some ability to set that percentage, that ability is pretty strictly controllec by levy limits set by the state legislature.
Property taxes, as I mentioned above, make up about $32 million of the county’s annual revenues.
Sales taxes: the county’s portion of sales taxes is 0.5%. While we have some ability to set that percentage, that ability is pretty strictly limited, and we're currently collecting the maximum allowed by the state.
Sales taxes make up about $10 million of our annual revenues.
It’s worth noting that about half our sales tax revenues come from Lake Delton. That means two things: First, that a substantial portion of that tax burden is borne by visitors from outside the county, and, second, that we suffered a huge drop in sales tax revenue during the pandemic. On the bright side, we’re seeing record sales tax collections now, as people begin traveling again and as people spend stimulus checks received from the federal government.
Usage fees: Many services provided by the county are paid for, at least in part, by the users of those services. That includes fees for such things as automobile registration, park permits, and land use permits. Those fees make up about $10 million each year.
Contributions from the state and federal government: County governments in Wisconsin are, legally, administrative extensions of the state government. The state decides what services and functions the counties will provide, and it’s up to the counties to provide them. So, while the county raises some revenue directly, there’s also a portion of our revenue that comes directly from the state.
In addition, every year, we get some amount of funding from the federal government. This year and next— as I mentioned above — we are receiving substantial additional revenue from the federal government.
Currently, the U.S. Congress is working on some major spending bills that would deliver funds to the county next year, primarily for ‘hard’ infrastructure projects (like rural broadband and bridge repairs), as well as ‘soft’ infrastructure, like child care for working parents, pre-school, and support for elder care. At present, we don’t know whether those bills will pass or what level of funding would come to Sauk County.
OVERSHOOTING AND UNDERSHOOTING
Clearly, everything in the budget is a best estimate. Unusual snowfall might mean unexpected highway expense. A pandemic can wipe out sales tax revenues.
During the year, if necessary, we ask departments to adjust. For example, when we lost sales tax revenue during the pandemic, we had to cut back expenses, too.
If possible, I like to see a bit of money left over at the end of the year. Yes, I realize that it means we asked people to contribute more tax money than was absolutely necessary, but it has two major benefits for the county.
First, it means we have a ‘rainy day’ fund, so when things happen — like the pandemic — we’ve got some funds to get us through it while minimizing cuts to essential services.
Second, a sound budget is good for the county’s credit rating. Right now, Sauk County has an excellent credit rating, and that will pay off for us financially. In 2022, the county hopes to build a new highway administration building. That project will cost an estimated $35 million, and we’ll have to use bonds to finance a substantial part of the project. Because of our excellent credit rating, the county will save hundreds of thousands of dollars on bond interest.
APPROVING THE BUDGET
As I mentioned earlier, the Finance Committee delivers a proposed budget to the full Board of Supervisors in October. Under state law, the board must vote and approve a budget at a November meeting, on the second Tuesday of that month.
Prior to that meeting, copies of the budget are made available on the county website. In recent years, the Finance Committee has also prepared a slide show that summarizes and explains the proposed budget. Here’s a link to the slide show for last year’s budget: xxxxxxxxxxxxxx
You are welcome to submit comments about the budget in the run-up to the Board’s vote. You can also attend a public comment meeting before that vote, at 6 PM on November 9.
SOME BIG PICTURE THINGS TO REMEMBER
As you think about the budget, keep a couple of things in mind:
First, remember that most of the services the county provides are mandated by the state of Wisconsin — we don’t control that. We have to provide the services. What we can control is how effectively and efficiently we provide those services.
Second, remember that the county, as an employer, is an important contributor to our local economy. The county provides good jobs to 650 people — in county offices, on road crews, in courtrooms, in parks. Those people spend their money in local businesses. They build homes, pay rent, buy groceries, maintain their cars, eat in restaurants — and, of course, pay their own share of county taxes.