Madison City Council raises property taxes by $22 million to address budget deficit

The Common Council of Madison convened on May 20, 2025, to address pressing financial challenges facing the city, particularly in light of recent state legislative actions that limit local revenue generation. The meeting highlighted the city's ongoing structural deficit, exacerbated by rising costs and stagnant revenue growth.

City officials discussed the implications of a referendum passed by voters in November 2024, which allowed for a $22 million increase in property taxes to help balance the budget and maintain service levels. Despite this measure, officials noted that the structural deficit persists, as the costs of maintaining services continue to outpace revenue growth. Madison's revenue limitations, particularly concerning property tax growth, were emphasized as a significant hurdle, especially when compared to other municipalities in Wisconsin and across the nation.

The council also reviewed the impact of the COVID-19 pandemic on city revenues, which had not fully recovered following the expiration of federal pandemic relief funding in 2024. This situation has led to a projected deficit of approximately $22 million for the upcoming budget year, prompting discussions on potential future revenue sources, including special charges and the use of the city's rainy day fund.

In addition to budgetary concerns, the council examined the city's capital budget and debt management strategies. Madison's debt, primarily in the form of general obligation bonds, is used to finance capital projects, with a current total of around $650 million. The council noted that the city's debt service is excluded from state-imposed levy limits, allowing for flexibility in funding essential infrastructure projects.

The meeting concluded with a focus on the city's financial outlook, which anticipates another gap in funding by 2030 if current trends continue. Council members expressed hope for potential legislative changes that could provide more diverse revenue options for municipalities in Wisconsin, aiming to better support service levels as the city continues to grow.

Overall, the meeting underscored the city's financial challenges and the need for strategic planning to address ongoing deficits while maintaining essential services for residents.