The Legislative Fiscal Bureau (LFB) has released a report (Informational Paper #16) that summarizes 2005 municipal and county finances. While the report is part of a series of budget-related documents designed to brief legislators on a wide range of policy issues, it can also be used to inform newspaper editors and other opinion leaders about the overall pattern of local finance in Wisconsin because: 1) Data are expressed in per capita terms, which simplifies general comparisons; and 2) The LFB is a widely respected and easily accessible source. Following are some key findings:

Expenditure Patterns: Table One highlights two fundamental local finance themes in Wisconsin. First, per capita expenditure patterns are highly variable across different types of governments. Second, towns have relatively low per capita costs. Transportation is the only major expenditure category given roughly equal emphasis by all four local government types. Counties dominate health and human service spending. Public safety, sanitation, recreation & education, conservation & development, principal & interest and utility operation costs are all relatively high in villages and cities. Town expenditures are relatively low in nearly all categories and overall they amount to less than 24% of total per capita city spending.

Revenue Patterns: Table Two again underscores the highly variable nature of local government finances in our state. It is no surprise to see that per capita taxes levied in towns are well below city and village levels. But note the large differences in the intergovernmental revenue, public charges for services, long term debt and utility revenue categories. Overall, per capita revenues in towns add up to less than one-quarter the level reported for cities. Another table included in the report offers additional details on intergovernmental revenues. It shows that transportation is the only major state payment category that favors towns, with towns receiving $73 per capita, versus $52 in villages, $55 in cities and $23 in counties. Cities compete exceptionally well for state shared revenues, receiving $188 per capita, compared to $37 in towns, $92 in villages and $28 for counties. Federal payments amounted to only $3 per capita in towns, versus $11 in villages, $47 in cities and $35 in counties.

A skeptic may respond that town taxes and expenditure are relatively low because town residents consume a disproportionate share of county services. While it’s difficult to measure service consumption patterns, another DOR report ("Town, Village and City Taxes”) shows that town taxpayers actually pay a disproportionate share of the county tax burden due to the statutory formula that apportions county taxes to underlying municipalities. Specifically, town taxpayers paid $403 per capita in county property taxes in 2003, versus $231 in cities and $294 in villages (to learn more about this, see: Do Town Taxpayers Pay a Fair Share of Taxes?).