A guest post by Kenosha’s 8th District Alderman Dave Mau.
Kenosha, let’s get our spending and debt under control, to properly and responsibly fund our first responders.
In May of this year, I received my first council meeting agenda as a new alderman. I was surprised to see a proposal for a referendum to raise our taxes.1 The amount a city can tax (levy) has a limit set by the State, and Kenosha has reached that limit. The only way the State allows them to tax us more is by passing a public vote. So on August 9th at the polls, Kenosha citizens will be asked to vote on raising taxes to pay for 10 police and 6 firefighters.
I strongly support our officers and firefighters and believe they need to be well funded. A central tenet of our government is to protect our rights, which includes the right to be free and safe, and I believe it to be a proper and moral use of taxpayer money. Knocking doors during my campaign, the vast majority of residents told me safety was their number one concern. So I think it’s imperative to allocate the City’s budget to move towards that assurance.
However, prioritizing funds is not the same as raising taxes, which my constituents are against. The City needs to fix its debt and development problem in order to free up funds. I also believe the way this proposal is being presented to the public is misleading and unethical. I ultimately voted “No” for the referendum, which passed 16-1.
According to the official city press release, “A failure to pass the public safety referendum to increase the levy will result in the City’s inability to hire the additional staff to meet the growing public safety needs of the community.” It essentially presents a false binary choice: either raise taxes, or you won’t be safe. Some might say that it has a hint of leveraging fear. But moreover, it’s misleading by omitting the other options, namely balancing the budget or limiting the duration of the tax increase.
Being new, and due to the way this proposal was brought to council, I had almost no time to talk it over with constituents or other alderpersons.2 So during the council meeting, I questioned if we could limit the duration of the tax increase, in order to provide time to get our budget back on track. The State statute allows either 1 year of increased taxes, or continuous. It was said that limiting the duration would result in officers being laid off after 1 year. I simply contend that wouldn’t happen if the budget was balanced. Point being, other options exist but are not being discussed with the public.
In addition, this referendum has often been portrayed as necessary due to the growth of Kenosha. I believe this is deceptive because the population has stayed close to 100,000 for a dozen years. Instead, the growth we are seeing is often due to development, requiring more city services and resources, and spreading the City limits outward. “Increased development in the City of Kenosha means the City needs additional public safety personnel,” said Mayor John Antaramian. In the past few decades, I believe the City has overcommitted resources to development and hasn’t properly budgeted for imperative spending. The development is often fabricated, wouldn’t exist without government influence, and creates debt. In my opinion, a debt per capita increase is not growth.
Regardless of a levy limit, we still have to prioritize. It’s not just a numbers issue, it’s a priority issue. There’s a good reason the State sets limits on how much cities can tax their citizens. It seems unfathomable to me that we’ve spent so much that we can no longer provide the most basic and essential needs like public safety. Many citizens who have ever struggled to maintain a household budget know that prioritizing is always possible and many times a requirement. I believe it’s never too late to stop the wild spending that has gotten the City here in the first place.
Imagine this scenario: A man exceeds his budget through frivolous spending on unnecessary luxuries. His roommate bails him out by agreeing to pay more of the rent from now on. This, of course, merely enables the man to continue his excessive spending because now he has extra money for his necessities. So even if the City uses the money for public safety, it can still continue its original wild spending habits elsewhere.
The City is currently in $225 million of debt, and accumulating $25 million in interest, which calculates to a shocking 11% in interest paid over the next 10 years.3 The debt is partially paid back each year, taking funds from the Operating Budget. A whopping 17% of the budget goes towards debt repayment.4 By State law, employees cannot be paid with credit, so police and firefighters must be paid by a budget that is 17% depleted from the get-go. That strain can be reduced if we re-prioritize.5
We’ve spent millions of dollars for 3 museums and 5 libraries with low turnout and six-figure salaries. Millions spent on special interests like the Boys & Girls Club, the bus barn, the Trolley, an archery range proposal, etc. This year alone, the City will create debt to the tune of nearly $1.5 million on the Libraries, $1.65 million to the Redevelopment Authority, $2.1 million to Transit, $1.2 million to City Development and $400,000 to the Bookmobile, to name a few. All these things might be wonderful, but it’s hard to argue that they take priority over the safety of your family.
Another large portion of the debt is from Tax Incremental Financing districts (TIDs). The City designates special areas where it funds speculative projects using credit. Using future taxes from that new development, the debt is paid back over the course of approx 30 years. These districts don’t create tax revenue for the City, because the tax money goes back to the debt created by the formation of the TID. Yet they require more services like police and fire.
Kenosha has 28 TID districts, the highest percentage of designated property in the State.6 The City sacrifices 29% of its revenue to tax abatements and these economic development subsidies.7 Some TIDs include luxury apartments, an art gallery, community theater, a boutique hotel, Amazon, Uline, Rustoleum, 4 gas stations, the failed Pick n Save on 63rd, and new projects like “Downtown Vision” and the Kenosha Innovation Neighborhood. These are all projects that citizens have not been asking for, yet the City does them anyway in the name of growth. Meanwhile, we can’t afford police that the people are asking for.
It’s been difficult to piece together the numbers for TID project expenses. The budget records only tax increments, and there’s no indication of how much total money each TID has spent or exactly what the money’s for. Adding to the complexity, funds can be transferred from one TID to another, and more debt can be created over the course of a TID’s lifetime. That could potentially hide spending that many taxpayers would disagree with – like subsidies to corporations. It’s common for municipalities to offer grants or forgivable loans to private companies for building in a TID.
TIDs are touted as a way to grow the tax base and eventually lower taxes when they’re closed. But as in many cities, that speculative revenue hasn’t materialized. And a TID can still cause taxes to go up during its lifetime, and even after closing it.8 Another downfall of TIDs is inflation. Tax revenues are frozen for nearly 30 years, so the value of that money decreases over time (by 9% this year!). To compensate for the lost value, cities have to raise taxes or cut back on services. Government “development” is gambling. And often a bad bet.
You may have seen postcards from the City recently, urging you to vote “YES” on the referendum. The total cost is $28,000 and was apparently budgeted for last fall. The postcard included many affirming quotes from what can be considered partisan unions and special interest groups. The postcard had no disclaimer. The purpose is being portrayed as “community education”, but I have trouble agreeing when the postcard explicitly says to vote “Yes”. That is typically the definition for propaganda.
In 2018, the city passed a nearly identical referendum for 5 police and 2 firefighters. But the postcard says our Fire Department hasn’t added any personnel in the last 20 years. I inquired about this discrepancy and was told that we did add 2 firefighters but then subsequently removed them, resulting in maintaining the original number. Even if that’s the case, the postcard is still quite deceiving.
It doesn’t seem ethical or legal for elected officials or administrators to be using the perks of the office and money from taxpayers to influence elections and tell taxpayers how to vote.9 The City is spending $28,000 for questionable postcards to gaslight us into believing that homeowners need to foot the bill for the City’s poor budgeting and pet projects which result in the “growth” that is the very impetus for an increase in staff.
First we are taxed to pay for investments. Next, we’re taxed because the preexisting services have subsequently become strained by businesses whose presence we subsidize. And finally we are being taxed again on postcards to influence us to be convinced that we should allow ourselves to be taxed even further.
If taxes were just raised 4 years ago with the same referendum, are we to expect another raise in 2026? By attempting to raise taxes, the City is shirking its responsibility to balance its budget. Voting “No” on raising taxes doesn’t mean we can’t fund public safety. Ask our mayor and council to consider a better option: Balance our budget and protect our families at the same time.
- The following question will be on the Aug 9th ballot: “Under state law, the increase in the levy of the City of Kenosha for the tax to be imposed for the next fiscal year, 2023, is limited to 2.654%, which results in a levy of $75,763,738. Shall the City of Kenosha be allowed to exceed this limit and increase the levy for the next fiscal year, 2023, for purpose of additional police and fire protection services, by a total of 3.3%, which results in a levy of $78,263,738, and on an ongoing basis, include the increase of $2,500,000 for each fiscal year going forward?”
- This referendum proposal was sent through the Finance Committee. Proposals must pass at a committee level before they proceed to a full council vote. Most committees, such as Public Safety and Welfare, meet every other week. The full council meets on the opposite weeks. That usually provides a week in between the first time a topic is heard at committee, to when the council casts the final vote. However, the Finance committee meets on the same day, a half-hour before the council meeting, so there was nearly no ability to deliberate, especially being one of 4 brand new council members.
- See page 283 of Kenosha’s 2022 Operating Budget.
- See page 55 of Kenosha’s 2022 Operating Budget.
- The latest S&P Bond Rating report states that Kenosha’s “economic measures lag those of similarly rated peers and its growth has contributed to a high direct debt burden.”
- California was the first state to adopt a TIF program in 1952. Wisconsin followed suit in 1975, but now has more TIDs than most other states. Since then, Kenosha created a total of 33, and only 5 have ever been retired. Only a handful of districts were started without Antaramian as acting mayor, and a large number were created in just the last few years. This could be attributed to Antaramian proposing and contributing to many WI State TIF laws over the years, including those that loosened restrictions.
- Kenosha ranks #10 for US cities reporting the largest losses from tax abatements. See https://www.governing.com/archive/local-tax-incentives-subsidies-income-inequality-report.html
- New TID construction can increase the City’s overall levy limit, meaning taxes will go up during the lifetime of the TID. On top of that, when a TID is terminated, state law allows a 50% increase in the base levy of the tax increment, for a total increase of 150%.
- Kenosha’s General Ordinance code 30.06 prohibits the use of City equipment or work time to participate in a political campaign. The Federal Hatch Act also restricts the political activity of local employees. A referendum question is inherently political (note I did not say partisan), because it’s a Yes or No vote and some individuals will see the issue one way and others will see it another way. But even if a specific law hasn’t been broken, it seems quite unethical. Those who hold a differing opinion don’t have the ability to use City funds to promote a No vote, and probably can’t do it themselves because $28k is a very large sum of money.
*The opinions and beliefs expressed in this article are mine and do not reflect the opinions and beliefs of the City.