Five-year forecast shows $1.5M 2026 gap; council weighs levy, services and sales-tax options

Finance Director John Regine presented the city's five-year general-fund forecast (2026'2030) at the June 3 meeting, showing a roughly $1.5 million projected gap in 2026 under the forecast's assumptions and prompting councilors to discuss levy policy, service trade-offs and other revenue options.

Regine said the forecast assumes a 3% operating levy increase and a 0.5% debt-service levy increase each year through 2029 (3.5% total) and then a reduced increase in 2030 tied to net new construction when the city would be limited to growth in the tax base rather than drawing on excess levy capacity. Under those assumptions, the forecast showed the 26'30 five-year gap was 45% lower than last year's five-year projection because staff used higher levy increases in the near term; nonetheless, the immediate 2026 gap rose from an earlier estimate of roughly $500,000 to about $1.5 million.

Staff identified the primary drivers: compensation growth (staff used a 3% cost-of-living assumption for non-represented employees and contract increases consistent with police and assumed for fire), which totals about $2 million in additional cost in 2026, and reductions in state aid and interest earnings (Regine cited a $250,000 state-aid decline and about a $262,000 reduction in interest income). Regine also noted ambulance-fee revenue was forecast lower because billable trips have declined; he estimated a roughly $272,000 loss tied to trip counts.

Committee members and the mayor discussed policy choices. Several alderpersons urged staff to continue exploring fee changes and service-level options (for example, yard-waste collection), and members discussed broader solutions including a local sales tax. Regine said a 1% local sales tax could produce several million dollars annually depending on state design and revenue-sharing rules, but the League of Wisconsin Municipalities is still advocating at the state level and any change would likely take additional legislative action. Alders also noted the school district's operating referendum could raise property tax bills further (Regine estimated the referendum'related operating levy increase could add roughly 10% to a typical homeowner's bill in the referendum year, before adjustments tied to reassessment).

Regine recommended the committee provide feedback on forecast assumptions as staff prepares departmental budget requests and the mayor's executive budget this summer. Committee members discussed smoothing levy increases across years vs. a higher near-term increase and noted the difference would mean either higher spikes in future years or steadier, smaller increases now.