Some Wisconsin local govts are fine in COVID World. But others have been hit hard

With it being October, it means it's local budget season in Wisconsin. And given the effects of the COVID World, it's a local budget season like no other, and we are starting to see a wide variety of effects for Wisconsin communities.

On the county side, things have held up OK, with a few big exceptions, as an article from Wisconsin Public Radio noted this week.

Earnings in Dane County have dropped 3.7 percent with a loss of $1.7 million, while Milwaukee County revenues are down $1.6 million or 2.6 percent, compared to data from the same time last year.

Meanwhile, Clark County in rural central Wisconsin has seen revenues increase 16 percent, while rural Polk County on the Wisconsin-Minnesota border has seen earnings rise 13.5 percent compared to this time last year.

"The consumers in those counties, because of (the) pandemic, aren't shopping nearly as much at the regional shopping places," said [Dale] Knapp [director of Forward Analytics]. "They're keeping it ... closer to home, or they're shopping online more."

Many counties have been bolstered by the boom in online sales, as those transactions are based on where the individual lives and/or wants the item shipped to. Some of those sales were likely lost to communities that had shopping and/or nightlife before COVID.

In addition, Wisconsin's Tourism Secretary has noted that because much of Wisconsin's tourism is done via driving, some of its areas have gained due to people wanting to stay closer to home for their trips. Movement in rural counties was up 19 percent this summer compared to last year, according to Secretary-designee Sara Meaney with the Wisconsin Department of Tourism. The agency is trying to gain insights on travel patterns through mobile location data that's tracked by the company Arrivalist.

"There are certainly indications that rural counties saw greater increases...and we saw significant decreases in urban areas, as well," said Meaney. Rural areas also continued to draw traffic from people who wished to take advantage of the outdoors, which is generally considered a safer activity than most in regards to COVID. By comparison, Madison and Milwaukee are more likely to rely on entertainment and nightlife-related tourism, which have been hit hard by the COVID economy. As an example, the two Northwoods communities with a local sales tax have been fine. Eagle River's loss has been less than $10,000, and Rhinelander has seen sales taxes rise by more than 10% in 2020.

By comparison, the often-crowded Dells area has taken on losses in 2020, with the most infamous example being the closing of the Tommy Bartlett shows. But many other places have also suffered in the Dells, and the two Dells-area communities allowed to have a local sales tax have seen those collections take a significant dive in 2020.

The biggest damage to local governments' budgets from the COVID World has come from the collapse in the lodging industry. Since most Wisconsin communities are not allowed to have their own sales taxes (only counties), the closest thing they get to a sales tax is one that goes onto hotel guests. And if people aren't staying in hotels, or if they aren't parking in City-owned garages for work (becuse they're working at home) that money isn't coming in.

An example of this effect came from the budget that Madison Mayor Satya Rhodes-Conway put up this week.

Since the pandemic struck, the city has suffered significant drops in hotel room tax revenue, parking violation fines, interest from investments and other revenues. Initially, the city envisioned a staggering $25 million budget shortfall for 2021, but that figure was later revised to $16.5 million. Rhodes-Conway closed the remaining shortfall by using $8 million — the most in recent memory — from the city’s fund balance, known as its “rainy day” fund, which stood at $54 million at the end of 2019; $3.5 million in spending reductions; $1.5 million in hoped-for reductions in police and firefighter labor contracts; $1.2 million in savings through furloughs; $1.1 million from increased ambulance fees and revenue from the town of Madison; and $1 million from delaying some services to the town.

Milwaukee has suffered even more from the lack of lodging and downtown events. What projected to be an historic summer with the Democratic National Convention and a Bucks title run fizzled out as COVID-19 took those events away, along with Summerfest, the State Fair, and a year of Brewer games. And this shows itself in the drop in revenues for the Wisconsin Center District, who oversees the FiServ Forum, which was built for the (canceled) Bucks games and DNC, as well as the city's convention center and other downtown facilities.

Maybe things bounce back toward normal in 2021. But if it doesn't, and the COVID World leads to more permanent changes in people's spending habits, you can see where some local governments in Wisconsin could be severely hampered without more help from the state and the feds in future years. And the fact that some local governments aren't suffering while others are taking on severe damage will make a political solution to these fiscal problems all the more difficult to figure out.