Q&A: ‘A fight to maintain what we have’: Alder MGR Govindarajan explains Madison’s budget shortfall

For many city officials, the looming $22 million budget shortfall is at the forefront of their minds. The Madison Common Council is currently discussing ways to close the gap after approving a referendum that will raise property taxes higher than otherwise allowed under state law.

District 8 Ald. MGR Govindarajan sat down with The Daily Cardinal to explain the budget process, what it means for students and how Madison is planning to fix it. 

This interview has been edited for clarity and brevity.

What exactly is the city of Madison looking at as the issue?

There's two budgets: one of them is called the capital budget, and one of them is called the operating budget. 

Think of the capital budget for your one-time expenses. For example, we want to build a new bridge. We're not going to build this specific bridge every year, it’s just one time funds. Or we're going to do the BRT, [so] we need to paint these bus lanes. That's a one-time fee. 

The operating budget is where we have the $22 million deficit. Those are your recurring fees — that's your salary, that's your pensions, your health care. In total, that all makes up around 60% of the operating budget. If the city has any debt, we pay it off in the operating budget. If we have programs that the city funds, like a rehabilitation program or preventing juveniles from going to prison, we fund those programs there. Additionally, we fund partner nonprofit programs through this budget.

When we talk about that $22 million deficit for 2025, that's equivalent to about 220 jobs. Those 220 individuals compromise the entire Streets Department — that's snow removal, that's cleaning your streets. It's a variety of things that residents rely on daily. 

How does the budget process work?

First of all, the agencies make the budget requests and provide that information to the mayor. This information tells the mayor what they want to cut and/or what they need. After that initial process, the mayor then creates the capital budget. Shortly after, the operating budget is released, or what is called the “executive budget.” This is where the mayor can add or cut funds for new programs. 

After that, the budgets are handed over to the Common Council. Two massive binders compose all of the information, and this is where alders can add their own changes to try to change the budget and add their own priorities. 

Usually, there is money left over for alders to split and use to fund district specific projects. It has gone from $200,000 to now $0. This year, it’s gonna be a fight to maintain what we have. 

What is causing the budget deficit? 

This problem isn’t new. Before 2011, the state Legislature would give us money based on a formula. The formula stated that the city would receive a 1-2% increase year after year. This is called shared revenue. To adjust for inflation, the city also received a 3% increase on top of that. 

However, in 2011, the 3% inflation increase was taken away. That became the problem. At the end of the day, inflation is still going to go up. We didn’t get enough money to meet that inflation rate, so we slowly started to see a growing deficit that has been building and building since the end of the 3% inflation increase. We have seen a budget deficit every year since 2011. One-time federal COVID-19 relief funds have allowed us to delay the issue for a bit longer. Now, those funds have expired. 

In the past, the city has tried different ways to address this problem. For example, some fees — water utility and ambulance — have been increased, parking enforcement has been removed from the police budget and is now self-funded based on the money they bring in from fees, and budgets have been cut. With a $22 million deficit, there are not enough changes we can do similar to that. 

We’ve also worked with Gov. [Tony] Evers for several years. We’ve asked him for more money in shared revenue, to which he has always agreed and put it in his budget proposal. However, the legislature has always removed it. 

We also asked for a local sales tax option. While the State of Wisconsin has a sales tax at 5.5%, any additional increases for Madison would go to the city. 

A Regional Transit Authority (RTA) has also been proposed. This means that instead of the city running Metro Transit, it would be a different jurisdiction that would have, basically, their own local government with tax powers that could expand to all of Dane County. It would be infinitely more efficient and cheaper for the taxpayers. An RTA, actually, did exist for a couple of months. Gov. Walker’s administration made it illegal. 

What is at stake? 

I think the main thing that a lot of students don't realize is how many city services they rely on, and I don't blame them. Before I became an alder, I had no idea as well. The big service that every student pretty much interacts with is the buses — whether it's bus 80 or any other bus, it's run by Metro Transit at the end of the day. 

Other services include snow management in the winter, or making sure your trash is collected, especially if you live in a smaller apartment. So when we talk about the budget, we're seeing potential cuts to those day-to-day operations. 

Proposed cuts include reducing poll workers, cutting Madison’s mental health responders, eliminating one fire engine company, reducing Metro Transit service for late night/weekends and eliminating the aquatics program, among many others. 

What is the city’s plan to stabilize the budget?

For the first time ever, the city is going to a referendum. On Nov. 5, there will be a question that basically asks: can we increase your property taxes by a certain amount to make up the deficit? 

It won’t impact students directly. However, it’ll impact their landlord, and their landlord could put that cost off to students. For most students, a potential rent increase will depend on where you live. It could really vary from single digit increases a month to around $13 increases. But, for the most part, as renters you will not see a whole lot compared to if the referendum doesn’t pass. We still cannot cut $22 million without getting rid of a lot of services. We would have to increase some fees. Those fees would probably start much higher and most likely disproportionately impact students more. 

When you go to vote in November, you will see a total of four referendum questions. The first one proposes a state constitutional amendment, the second one is for Madison’s budget, and the last two are related to [the] Madison Metropolitan School District’s budget. 

What should students do? 

Historically, the city has always seen students as a source of income but not a source to provide services to. I’ve been told to my face that students are the university’s problem. The chances of that happening again are so much higher.

I plan on voting in favor of the referendum as I did on the council. If it passes, then we won’t see nearly as many cuts, or any hopefully. But if it fails, we will have to make cuts. That’s what I’m afraid of. 

Govindarajan represents District 8 on Madison’s Common Council. You can contact him by emailing district8@cityofmadison.com.

---