Washington County has kept its levy flat for at least the last 8-10 years. We've done this through exercising fiscal restraint and fiscal responsibility. Below are some of the key principles we have focused on. Some of these may sound remedial, yet so many governments ignore these principles.
Overriding Principles
"The problem is not that government taxes too little, the problem is that government spends to much" - Ronald Reagan
In Washington County, we live within our means.
Annual (Bi-Annual) Budgeting
Most local governments, when it comes time to budget, start with their expenses. They then invest their efforts in trying to stretch their revenue to cover those expenses. When that fails, they raise taxes to cover the shortfall. They remind me of the carpenter whose only tool is a hammer. That carpenter will quickly come to see every problem as a nail. These municipalities only know how to address budget problems by raising taxes, so every budget gap starts to look like a revenue shortfall.
Our County has taken the opposite approach. We start with our revenues, and identify ways to shrink our expenses to fit within those revenues. That approach has allowed us to keep our levy essentially flat since 2014 despite starting each budget cycle with a $2.5 million dollar gap between expenses and revenues.
We also recognize the distinct difference between recurring expenses and one-time expenses. If we cut a $100,000 one-time expense from the budget, that's a nice savings for that year, but it has no effect beyond that. If we cut a $100,000 recurring expense from the budget, that's a nice savings for every year going forward. Over 10 years, it is $1 million in savings, over 20 years it is $2 million. Likewise, if we add in a new expense, and it is a recurring expense, that's a new expense that will need to be funded every year going forward. A new $100,000 recurring expense we add in will cost us $2 million over the next 20 years.
Rule #1: Start with our current revenue, and finds ways to trim our expenses to fit within that revenue.
Rule #2: During budgeting, think of recurring expenses not just in terms of their cost in the current budget cycle, but also in terms of their long term financial impact.
Recurring Money vs. One-Time Money
One thing our county has been very focused on is pairing one-time revenue with one-time expenses. The "American Rescue Act" was a great example, where we received a ton of one-time money (roughly $26 million). Many governments took that one-time money and used it to justify all sorts of new recurring expenses, including pay raises or additional staff. Once the one-time money runs out, they still have the recurring expense, with no revenue to fund that expense. Our county has always been disciplined about recurring expenses, they are only allowed if they are paired with a recurring revenue source.
Rule #3: don't fund recurring expenses with one time money.
Staffing
One of the largest expense items in any government is staffing. Our county has been diligent about finding efficiencies and reducing staff. In other government agencies, especially at the state and federal level, all too often when positions are no longer needed, no action is taken to correct the overstaffing.
Rule #4: We will never create a position unless we eliminate a position (even if that position is eliminated from another department).
Rule #5: When we eliminate a position, we will never use that as an excuse to create an additional position.
Shared Services Creates Efficiencies
In many communities in Wisconsin, multiple government agencies perform the same tasks. In Washington County, we have focused on finding ways to eliminate that duplication of services, and we continue to seek out more. If towns, villages, and cities and doing the exact same thing we are, let's combine forces and either save the taxpayers some money or allow the municipality to use that savings to fund other things. We reject the old axiom that many other governments have lived by, "why have one, if you can have 2 at twice the price."
Rule #6: Seek out cooperative agreements with local municipalities that reduce duplication of services and provide a net savings to the taxpayer.
Borrowing Money
Many local governments, when they borrow money, use it as an opportunity to raise taxes. Sometimes, governments fund recurring expenses through borrowed money (which is one-time money). Washington County has adopted a different approach. First, when possible, we plan for major expenses and save up for them. Second, when we do borrow money, we attempt to pay for that out of our existing operational budget. This fits our "live within our means" approach to government.
Rule #7: Do not ever borrow money to pay for recurring expenses.
Rule #8: Work diligently to fund any borrowing from within the current budget. Raising taxes to fund borrowing should be a last resort.
