State budget deal boosts municipal services payment; Madison to receive about $3.1 million a year, Welch Group says

A Welch Group representative told the Madison Common Council Executive Committee on July 1 that a state budget agreement announced by Governor Tony Evers includes a $14,000,000 increase in the municipal services payment over the biennium — $7,000,000 per year — and that Madison will receive roughly $3,100,000 per year from that increase.

The municipal services payment provides state reimbursement to local governments for police and fire services; the Welch Group representative said the change would raise Madison’s share of the calculated cost from roughly 37.6% to “slightly over 50%,” returning the reimbursement level to about where it was in 2011. The representative cautioned the committee that the budget still needs final votes in both legislative chambers before it goes to the governor for signature.

Why it matters: the municipal services payment is a recurring line in the state budget that reimburses cities and counties for public safety costs. A larger reimbursement reduces pressure on local general funds, but changes to other state-aid lines and local levy calculations can alter net local impacts.

Details from the Welch Group briefing included several other items in the omnibus motion reported to the committee: about $330,000,000 in childcare funding; an increase in the special-education state reimbursement rate to about 42% in the first year and 45% in the second year; an increase in funding for the UW system of roughly $2,256,000,000 over two years; elimination of sales tax on utility bills; a targeted income-tax exclusion for retirees meeting a low-income threshold; and a one-time $10,000,000 line that the Welch Group said will be made a permanent line for the food security initiative grant program.

“It's 14,000,000 over the biennium, so 7,000,000 every each year over the course of the biennium,” the Welch Group representative told the committee during the presentation. When Alder Evers asked what portion of the $14 million would go to Madison, a city staff member (Sam) replied, “Madison will get approximately 3,100,000.0 per per annum.”

Committee members asked follow-up questions about net effects after other changes to shared-revenue lines. The Welch Group representative said the omnibus motion’s text was new and that staff and city finance officials would need time to parse line-by-line impacts; the representative said public summaries reported the municipal services payment as an absolute increase while shared-revenue formulas can produce offsetting changes.

Next steps: the Welch Group representative told the committee the deal had passed the Joint Finance Committee and that he expected both legislative chambers to produce the votes needed this week before sending the budget to the governor for signature. The committee did not take a formal vote on the briefing; discussion was recorded as an informational item.