Conservative Fond du Lac leery of Republican Legislators Voodoo Economic suggestions for city budget.

I just love this story. It shows how completely irresponsible Madison Republican legislators are about their continued use of supply side, voodoo economic policy.

First, let’s see how one state senator and one state representative would solve Fond du Lac’s budget problems. Yes, they want tax cuts. FDLReporter:

Fond du Lac City Council will take a couple more weeks to consider applying more

Trust us, we know what we're doing?

reserve funds to the 2015 budget. Sen. Rick Gudex and Rep. Jeremy Thiesfeldt, both former councilmen, spoke as “city residents” suggesting the Council use some or all of the $1.5 million in unassigned fund balance to help reduce the tax levy that includes a 5.4 percent increase …saying it was unfair to ask taxpayers to “pay more” in the form of a tax increase.

What makes their suggestion even more ludicrous is that it sets up a budget before the city’s reassessments are factored in, which could be dramatic.  

The tax increase, though, will vary in the wake of a citywide property revaluation, where some properties increased in value and others decreased. Thiesfeldt said “I am very uncomfortable with maintaining a fund balance well beyond Council policy of 15 percent and ... increasing taxes by 5.4 percent of equalized value. There should be some consideration to knocking that down.”

No, there shouldn't. And that was the message by the city's real managers of taxpayer money, who presented some very important reasons:

City Manager Joe Mooreand Director of Administration Hal Wortman both voiced concerns Wednesday about the use of additional fund balance to reduce a tax rate increase. Wortman said the city could get into a cycle of increasing budget deficits and would have to cut services.

Moore said by lowering the levy, no matter how it’s done, it would “re-set” the baseline property tax levy and the amount cannot be recovered. There is no additional state aid and the levy may be increased only by the percentage of new construction and increases in debt service. “If you don’t levy up to the levy limit, you've reduced your levy and that is the new base for the next budget year and years going forward,” Wortman said. “You've lost forever whatever amount you reduce it by.”

Wortman is talking about our big government Republicans in Madison, who put a fiscal straitjacket on local government:

Wortman said there would be better ways to use excess fund balance, including repayment of debt, avoidance of new debt and for economic development. “I would say stick with the levy budget as is,” he said. “It would be a poor financial decision to draw down the tax levy.”

The outright rejection of Rep. Thiesfeldt and Sen. Gudex’s budgetary suggestions tell the whole story:

Moore said the risk inherent in using the entire $1.5 million is having no fund balance at the end of 2015 for use in 2016. Previous budgets have used some fund balance to support the upcoming year’s budget. If an emergency arose, there would be no funds to draw from. 

I think this sums it up:

Council President Sam Meyer said he wanted to be comfortable about the city’s ability to pay bills in the future.