This is a post by Harald Kliems and Craig Weinhold. The views expressed are their own and do not necessarily represent the views of Madison Bikes.
City Budgets and Referendum
The city’s operating budget and its structural deficit have been a hot topic since March, with dire pronouncements of service cuts to pools, libraries, and waste drop-off sites. In July, the common council voted to put a $22 million referendum on the Nov 5 ballot. If passed, the average Madison home (valued at $457,300) would see a property tax increase of about $230/year, or about $20/month.
Since July, the financial landscape has changed slightly due to proactive budget cuts, better than expected investment income, reduced General Obligation borrowing, and a new proposed Infrastructure Special Charge (described below). As of the mayor’s October Executive budget (which will be voted on by the common council in November), just $5.6M in cuts are now proposed if the referendum fails to pass. No additional cuts are expected for 2026. But come 2027, if there’s no change in state funding, we’ll be back in the same situation.
If the referendum passes, the mayor predicts the budget will be good for five years without any additional cuts or hand-wringing, even if state funding does not come through.
So, what’s at risk for bicycling?
On first sight, there are only three items to be cut if the referendum fails:
- Snow removal from multi-use paths removal will no longer be done with overtime hours (projected savings: a measly $15,000). How this plays out depends on the vagaries of winter weather. Clearing major paths on the weekends and holidays was only started in 2020 through a budget amendment. Before then, weekend snow events often led to persistent bad path conditions.
- Metro must reduce service hours to the tune of $500,000, in addition to a one-time $500,000 cut in 2025. The cuts will likely focus on early/late and weekend service. Metro is an important backup option for bikers.
- One vacant traffic engineering position will be eliminated. This will slow projects and impact staff morale.
But also at stake are subtle, longer-lasting things:
Optics: Regardless of the referendum’s outcome, the spectre of Madison’s budget problems will now loom over every project and Common Council vote. In general that’s not a bad thing, but “budget” is an easy argument to lob against anything one dislikes. E.g., when two alders last year spoke out against the Autumn Ridge path, they framed their opposition as budget concerns (despite voting for plenty of other expensive projects closer to their districts). Social media flames blaming BRT and bicyclists for every woe on the road are now invoking “budget!” as a primary line of attack.
Morale: The city’s transportation and engineering staff are fantastic. They love this city even though many of them cannot afford to live here. They get lower pay than in the private sector while having to endure all the frustration of working in government and being held to an impossibly high standard by the public. The 2025 budget cuts have created anxiety about salary, benefits, workload, team size, etc. Staff are being asked to do more with less, and that will only get worse. Regardless of how the referendum turns out, some staff may be looking for other options. And fewer staff means less capacity to bring in grants and to plan and deliver projects.
Community and Culture: It’s hard to predict which and how many Madison events, activities, and experiences will be impacted by the budget cuts. E.g., the Shifting Gears Bike Path Dance Festival is one of about fifty organizations that would lose grants from the Madison Arts Commission. Would they soldier on? Will a stretched Madison Parks department still host Ride the Drive? Will Make Music Madison be more subdued? Public art? These may not affect bicycling per se, but they certainly are part of what makes bicycling in Madison special and joyful.
“Infrastructure Special Charge”
One way to make up for the missing tax dollars if the referendum fails is an “infrastructure special charge.” The revenue from this charge would be used to cover street repair and maintenance, lighting, signage, signals, pavement markings, and bike & ped facilities. The charge will be based on how many car trips a property is assumed to generate, which, in turn, is estimated by the number of parking spaces. A single-family home will see about $6.35 in monthly charge on their municipal service bill, right next to their water, sewer, and urban forestry charges. The city hopes to raise $10M annually from this charge.
It’s a novel use of special charges that have historically been used for sidewalks, though the City started using them for Urban Forestry and Recycling in 2023. This is an innovative strategy, but it’s bound to draw howls of protest and a likely legal fight. Other communities that have tried instituting similar transportation fees have been dragged to court.
How the Operating and Capital Budgets relate
The current budget woes affect the operating budget that covers recurring expenses like staff and loan payments. Of the proposed $417M operating budget, 62% goes to salaries and benefits for the City’s 3,000+ employees.
The capital budget, on the other hand, is primarily about big one-time costs like new roads, paths, buildings, or bus fleets. The construction of new bike infrastructure largely falls to the capital budget.
The two budgets intertwine in both direct and indirect ways:
- Capital projects require loans, and the repayment of those loans often comes from the operating budget. This is called general obligation or GO borrowing (aka “debt service”), and it’s the second largest item in the budget ($68M, about 16% of the budget).
For example, the 2024 capital budget has $273M in projects, of which about ⅓ ($87M) is funded with GO borrowing. That means the $4.8M “Bike Path” expense on page 388 might require about $1.6M in borrowing. Assuming a worst-case, 10-year, 7% loan for $1.6M, the debt service would come to about $230K per year against the operating budget. That’s small, but not negligible.
- Once built, all infrastructure requires maintenance and upkeep. Consider the new Segoe protected bike lanes between Regent St and University Ave: They are too narrow for regular-size street sweepers and snow plows, so city staff will need to transport specialized equipment there, and they’ll need staff trained to operate it.
- Speaking of snow removal, property owners are responsible for their sidewalks, but the city is generally responsible for the paths. In fact, free snow removal is a carrot dangled in front of homeowners to get them to agree to paths (e.g., the new Hammersley Rd path). So every new path implies additional snow removal costs for the city.
The Future
The Nov 5 election will likely not flip the state legislature to Democratic control, but it will shake the Republicans’ hold on power. With more seats at the table (and hopefully stepped up city lobbying), Madison should see increased state funding in the coming years.
On the whole, the city’s first-ever $22M referendum is modest and responsible, gives five years of financial clarity, and has a trivial impact on property taxes ($20/month!). It also comes on the heels of significant cuts and belt-tightening across the city. In contrast, MMSD has been using referendums as a business-as-usual strategy, with seven of them in the past 25 years.
No matter how the referendum turns out, Madison needs its bike community to continue showing up in support of smart transportation. Keep celebrating changes, large, and small, that have improved your daily rides. And involve your alder, your neighbor, your coworker, and others in that celebration. Stay engaged with the Southwest and Southeast area plans that kick off in the next two months. Show up to the budget hearings at the common council (Nov 12-14). And, as you do speak up, keep the budget optics in mind.
Be informed
To help inform you about the financial context and impact of the property taxes, we have built two web tools. Harald created a website that shows how the assessed value, different kinds of property taxes, and the consumer price index have developed over the past few years. Craig’s tool is looking into the future: How much are the city referendum and the two MMSD referendums going to increase your (or your landlord’s) property taxes?