Beloit is most dependent on state revenue

Beloit is most dependent on state revenue

By Hilary Dickinson and Justin Weaver
Daily News staff writers
Published: Wednesday, March 2, 2011 11:32 AM CST

When Gov. Scott Walker presented his budget proposal on Tuesday, he announced a cut of more than $1billion in aid to public schools and local governments.

Beloit City Manager Larry Arft said that cut was not as dismal as some feared, but nevertheless he anticipates city programs and service areas will be altered.

“There’s nothing lying around loose in that general fund,” said Arft, citing the budget cuts the city already has made in recent years. “We’re way past the fat and the muscle.”

Arft does not yet know how much state shared revenue the City of Beloit will receive, but he said Beloit is the largest per capita recipient in the state.

State shared revenue makes up 65 percent of the city’s general fund, which means $18 million of the general fund’s $30 million budget comes from the state.

In addition, 80 percent of the city’s general fund is used for salary and benefits for its employees.

“It’s going to take some time to analyze this and get the full impact,” Arft said. “We really need to see numbers on the resource side before we get too serious about what to cut off on the expenditure side.”

He did say, however, that property tax increases will not be occurring because Walker mandated a zero percent levy increase.

“There’s no other funding sources to help offset so it will all have to come from cuts and reductions,” Arft said.

Layoffs will try to be avoided, he said, because between unemployment and accrued benefits it’s a long time before any savings are made.

Early retirements, which have been done in the recent past, could be an alternative option to layoffs as is the restructuring of departments.

For now, city staff has begun putting together an inventory of all the city departments’ services and programs to get a reference point as to what is all currently offered.

Arft said union negotiations won’t begin until he has a solid handle on how much state shared revenue the city will receive next year.

In the meantime, he plans to stay in close contact with the city’s five unions.

“We will work with them, the management team, and the employees in the most reasonable matter possible,” Arft said.

As of Tuesday, City of Beloit union leaders say it’s too early to tell the impact.

Steve Warn, president of the International Association of Firefighters, said he is worried about the potential for layoffs though.

“It’s definitely a possibility,” he said. “Everything is on the table when it comes to budget cuts.”

John Baumgartner, the president of the Wisconsin Professional Police Association, said he and the other union presidents are looking forward to meeting with Arft to see how bad the budget appears on paper.

“All associations know some type of change is coming — just not to what magnitude,” Baumgartner said.

As for the Beloit School District, it is not a stretch to say the budget will impact no school district in the state more than it will impact Beloit’s. The Beloit School District receives 82 percent of its funding from the state, the highest of any school district in Wisconsin.

“We are the most aided district in the state,” said Superintendent Milt Thompson.

The district preemptively braced itself for the massive state budget cut by approving the impending closures of Royce and Wright Elementary Schools.

“There are other districts close by that are thinking about closing schools,” Thompson said. “We’ve already put that on the table, and it’s going to help us.”

The district has not yet followed suit with other schools in administering layoff notices, and hopes not to resort to such maneuvers. Planning for the future will be a full-time job, Thompson said.

“We spend a lot of time problem solving. When we get the information, we run through our options,” he said. “Until we see the hard numbers, I don’t know (what’s going to happen). My team and I are pretty creative problem solvers. We need to see what the dollars look like and what the real situation is.”

Thompson said it is imperative that district administrators and employees maintain a sense of optimism during what could prove to be a very pessimistic period.

“I’ve never found anxiety to be a helpful factor in decision making. What’s happening in our state right now is unprecedented. It calls for unprecedented thinking,” he said. “The key is for us to maintain a high level of academic excellence. I hate putting ourselves in a box. That’s what happens if you let moments like this warp your perception. The ‘Chicken Little’ approach leads to poor long-term decision making.”

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