What's up with Madison's city budget?

A crash course in the most important thing local governments do—and the
most confusing.

A crash course in the most important thing local governments do—and the most confusing.

Image: Layers of blurry numerical columns from Madison’s city budget overlap with charts and the City of Madison logo. Illustration by Tone Madison, source images via City of Madison 2021 adopted budget.

Last summer, uprisings for racial justice sparked a wave of engagement in local politics. In Madison, hundreds of people took to the streets—and to social media, as Facebook posts dedicated to tracking and publicizing the gritty details of legislation related to racial equity sprang up from week to week. Madison Common Council meetings received the live-tweeting treatment. Tutorials to navigate the pandemic-adapted Zoom systems for City meetings aimed to ease entry for those new to giving public testimony. As people showed up again and again to keep change for racial justice on the agenda, behind the scenes, a slower force was at work. 

The budget. 

Budgets suck. Do you have a budget? And how do you feel about that? 

I'm not talking about a budget as in the very real constraint of how much money you can spend each week or month. I'm talking about a list of numbers in specific categories like "Groceries" and "Entertainment." Think Venmo emojis: 🏠 💡 🍊 🍺  🐶  🎥  🚕, etc. etc. 

If you have a budget, sticking to it and keeping track of it is a chore. If you don't have a budget, you probably know that budgets can be hard or impossible to maintain at all. A budget requires some income to shift around—a little more here, a little less there. Otherwise, you're just plugging holes.

What is actually up with the budget?

The City of Madison is currently working on its 2022 budget. We're in 2021, so we're budgeting for 2022. You can keep track of the ongoing Madison 2022 budget process here. 

There are two City of Madison budgets, the capital budget and operating budget. Here's how the City of Madison website describes them:

The capital budget provides funding for the City’s major construction projects including building new facilities, improving our transit system, maintaining our roads and parks, and purchasing major equipment.

The operating budget provides money for running City departments and services. It pays for the day-to-day spending on employees and materials and supplies.

Let me offer a couple of mnemonic devices:

The Opera

The operating budget is like the opera of City activities day to day. A look at the operating budget tells the story of what we're funding in Madison each year. From public library services and staffing, to Metro Transit, the police department and more, the operating budget shows what is often in the spotlight when we talk about funding priorities within our community.

Those particular departments fall within what is called the "General and Library funds" portion of the operating budget. Most of the money for the General Fund—73 percent in the 2021 adopted operating budget—comes from property taxes. Additional funding for the operating budget comes from fees, fines, and government grants.  

The operating budget is much larger than the capital budget. In 2021, the City of Madison's $715.2 million operating budget was 81.1 percent of the overall adopted budget, compared to the $166.4 million capital budget. 

Major expenditures in the 2021 operating budget include $98.7 million for Debt Service, $84.9 million for the police department, $62.2 million for Metro Transit, $61.5 million for the fire department, $36.6 million for the Streets Division, $25.8 million for community development housing operations, $20.7 million for the Community Development Division, and $18.8 million for libraries.

The Capitol

If you have trouble remembering the difference between the operating and capital budgets, here's another trick. The capital budget funds buildings and physical infrastructure projects. Imagine the State Capitol building downtown. It's corny, I know, I'm sorry! But it works!

The planning process for the capital budget focuses on the upcoming year, like the operating budget, but it also looks ahead at the five following years. Think big, multi-year projects. 

Most of the funding for the capital budget comes from selling bonds. We pay back this debt in the operating budget. So although the two budgets are separate, the City's use of debt forms a major link between them. When we spend money in the capital budget, it ultimately impacts the amount that we're able to spend in the operating budget, because we have to pay down that debt.

Most of the 2021 capital budget went towards public works projects (45 percent), followed by transportation (16 percent), planning and development (15 percent), utilities (14 percent), and parks (6 percent). 

The timeline

The City of Madison's budget process begins in the spring. The mayor kicks it off by sending a message to the heads of all the City departments and divisions (a long list that includes everything from Parks, Transportation and Engineering to Library, Public Health and Civil Rights) with guidance as they work on crafting their budget requests for the following year.

This year, Mayor Satya Rhodes-Conway sent memos to agency heads for the capital budget on April 13 and for the operating budget on May 24. Her operating budget memo cited a projected $18 million budget gap and asked that all General and Library Fund agencies (except for Public Health Madison & Dane County) include 5 percent reduction proposals as they plan their budget requests.

Agencies have already sent their budget requests to Rhodes-Conway for 2022. Those requests for the capital budget are published on the City's website. Agency requests for the operating budget were not yet available online at the time of publication, but will be published here.

The Mayor uses these agency requests to craft the executive capital and operating budgets, encompassing all of the agencies and setting priorities for the next year. 

You can imagine the budget throughout this process like a volleyball, careening back and forth over the net. The Mayor serves the ball, the agency heads bump it back, and at this point, the Mayor gives it a wild whack, sending it off the court and into the crowd. (That's us! We are the crowd!) 

Personally, I think this is the most important part of the budget process, although it's not necessarily the most influential. When the volleyball (the budget) finally lands in the stands, it has already been shaped by the commitments of past years (it can be difficult to remove funding for ongoing services and projects), and the priorities of City staff (agency heads) and the Mayor. At this point, we have the option to shout from the crowd and demand change by appealing to our elected representatives on the Common Council—our Alders.

The executive budgets from the Mayor are made public in late summer or early fall. This year, the executive capital budget is scheduled to be released August 31, and the executive operating budget, October 5. 

Within a week or two of the budget's release, the Common Council's finance committee holds public hearings on each budget. The finance committee, which includes six Alders and the Mayor, can make amendments to adjust the budgets. During these hearings, people can speak in support or opposition to aspects of the budget, and request budget amendments.

Save the dates: public hearings on the capital budget will take place September 13 and 14, and on the operating budget October 11 and 12. 

By the time the budgets reach the Common Council for a final vote (slated for November 9 through 11 this year), there will already have been several meetings for public input. These November Common Council sessions are the last chance to amend the budgets before they are approved for the following year.

Why it matters

Practically, the budget outlines how we use our resources and where we put our time, energy and attention as a City. It also says a lot about our priorities as a community. Policy change can happen through legislation—individual resolutions and ordinances—as well as through the budget.

Demands to defund the police use budgets as a tool to make broader societal changes. Shifting money out of policing and into services like housing and healthcare is a strategy to take one (big and important) step towards a more equitable community.

The budget process is not perfect. If you want to read about alternative processes, I recommend checking out information about "participatory budgeting." 

So now you're hooked, right? You want to know all about the 2022 budget. Here's a link again to the City website charting this year's budget process and timeline. You can also contact your Alder for more information, and sign up for email updates. Also, show some love to your local journalists! If you find an article with information about the budget that you find helpful, remember to check back for updates from that publication and/or author.

Coda

The Dane County budget also matters! And it's not a terribly different process from the City's. You can learn more here. 

Save the dates: public hearings for the County budget will take place on September 13 and 14, and October 20.

Dane County also has a rather nifty budget simulation that allows you to look at the budget as a pie chart and shift money around before sending it off to the County to share what you think spending priorities should be for the next year. Do they take your feedback into consideration? That would be nice, wouldn't it. Make sure your County Supervisor hears from you.

TL;DR

Budgets suck. It is known. 

Operating budget = staff, services and debt. Capital budget = buildings and equipment. Of course it's not that simple, but also, it's that simple.

The operating budget is funded through taxes, fines and fees, and state and federal grants. The capital budget is funded through the warped system that is capitalism (i.e. local governments borrow money). 

Budgets start in the spring and are finished in the fall. If you're scheming to change the world (of municipal budgets), start that shit early.

We live on stolen Ho-Chunk land that is currently organized into cities, towns and villages within larger counties. You'll have a municipal budget—City of Madison, Middleton, Fitchburg, Verona, etc.—as well as a County budget—Dane County, in this area.  

Keep track of the municipal budget for the City of Madison here. If you don't live in Madison and your local government doesn't have a tidy timeline online, you can bug your elected representatives for more information. Bug them! 

Follow the Dane County budget process here.

There's more where this came from.

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