Budget-builders should expect pressure on revenues.
Since Wisconsin and every other state is still in what experts have called the first inning of the coronavirus pandemic, it’s hard to predict with any accuracy how state revenues may be impacted by economic disruption.
But it’s a sure thing the impact will be substantial.
When Gov. Tony Evers sent a letter to President Trump encouraging the federal government to remember state governments in assistance plans, Evers projected Wisconsin could lose as much as $2 billion because of the virus.
Is he right? Who knows? It could be $2 billion. It could be $1 billion. It could be $5 billion. Less? More?
This much is clear. State decision-makers and every municipality and school district should be anticipating a sharp departure from the status quo.
In Beloit, that’s an alarming prospect. Despite lots of investments and improvements the community remains one of Wisconsin’s most dependent on state revenues to fund city government and the public schools. And while other area governments and school districts are relatively better off when it comes to dependency, state funding is important to all.
Counting on the continued flow of state dollars without interruption or change seems foolhardy.
Yet already we are seeing instances of raises being considered or handed out, along with other matters related to expenses. Soon, school districts will be building annual budgets—normally, approvals come in the early fall—and ability to pay should be a prime consideration.
Look, the state of Wisconsin—along with cities and towns—has a long and proud tradition of supporting good schools and good government. We’re all for that and hope it continues, to the best extent possible.
But this normal is not normal. The virus has knocked a couple of bricks loose in the economic foundations of Wisconsin, and everywhere else, for that matter. Tens of thousands of Wisconsin citizens are out of work, and the prospects for recovery are vague. A lot of people have been living off emergency assistance provided to cushion the coronavirus turmoil, and no one knows how long that will last.
As local units of government shift into budget mode, we encourage them to do so with an eye toward frugality and caution. This is the time to curtail or freeze spending, not increase it. This is the time to expect lower revenues, not incremental gains. This is the time to avoid passing extra costs to property owners, who may be struggling to stay in their homes.
Budget cycles will be deeply challenging. Anticipate the pain. Don’t make it worse by finding ways to spend more.