How Strong Are Madison Finances?
Updated: Sep 9, 2020
My opponent recently stated that he had the best experience in managing Madison’s financial health and used the metric of 34% growth in total city revenue from 2014 to 2020 to supposedly show his financial prowess. Facts are facts and this number is true, but does that metric have anything to do with financial management?
The vast majority of city revenue is from sales and ad valorem taxes. Ad valorem tax receipts are a product of property owners and property value (both increased since 2014). Sales tax receipts are a product of population and per capita spending (both increased since 2014). What he is taking credit for is not financial acuity, but arithmetic. It would be just as nonsensical for me to claim my position for several years on the Finance Committee of Madison Board of Education is responsible for revenue increases from $100.1M in 2014 to $135.0M in 2020 (35% growth), which they did.
What really matters in financial management is long-range, strategic planning and managing the issuance, maintenance and retirement of debt. First of all, municipal debt is not bad. Schools, roads and stadiums cost money and must be paid upfront. Municipal bonds give our city the ability to provide these services and pay off bondholders over time. However, let’s look at our debt growth over this same six-year period my opponent is hyping.
The 2014 budget showed outstanding debt of $164.5M, with the makeup of debt being $86.7M of school debt and $77.8M of general debt. Over this six-year period, school debt decreased by $5.7M (-6.6%) and city’s general debt increased by $77.1M (+99.1%).
My opponent states that the financial position of the city is strong because our revenues increased and our operating reserve fund is strong. This is similar to a person saying their household finances are strong because they got a raise and their savings account increased a few dollars, while burying in the bottom drawer the fact that their credit cards balances doubled.
Unfortunately, we must now play the hand dealt to us. But does it make sense to go forward with leadership that almost doubled their segment of debt or leadership that decreased their segment of debt over the same period?
As my opponent states, the choice really is clear, vote for Connie Spears in the October 6th runoff and let me be Your Voice on Our Council for fiscal responsibility.
2020 budget document https://www.madisonal.gov/ArchiveCenter/ViewFile/Item/3777 page 108 of 117.
2014 budget document https://www.madisonal.gov/ArchiveCenter/ViewFile/Item/1932 page 76 (see principal remaining)