Who will really pay the cost of Madison’s budget referendum?

Affluent homeowners are using poor renters to mask their grievances and save $19 a month.

Opponents to the City of Madison’s proposed $22 million referendum—which would increase property taxes to fill an urgent budget gap—invoke its potential impact on the working class and poor for why they plan to vote “No” on November 5. They argue that a “Yes” vote would aggravate the “unequal burden on renters,” or paint a picture of senior citizens on fixed incomes absorbing the cost. But that’s not an accurate picture of Madison homeowners in the aggregate or the dynamics of rental prices. It is also not an accurate representation of who will have to pay the most if the referendum passes, and who will be hit the hardest if it doesn’t. 

Let’s run through the numbers. As The Cap Times reported last week, a home valued at approximately $457,000 (which is close to the average home valuation) will see its property taxes rise $83 next year, regardless of whether or not the referendum passes, because average home values in Madison keep rising. If the referendum does pass, that number goes up to $313—a $230 increase per year, or $19 per month.

But the majority of Madisonians are renters. According to the City’s 2023 housing snapshot, they are already rent-burdened. “The median renter household in the City of Madison, with an income of $46,151, can ‘afford’ (spending 30% of their income) an all-inclusive rental cost of $1,171 per month before becoming cost-burdened,” the report reads. 

First, let’s note that the average renter income—$46,151—is considerably lower than the average Madison income, which is a hair under $75K, according to the U.S. Census Bureau. The low-income Madisonians, whose plight homeowners invoke in their opposition to the referendum, are mostly not homeowners. Second, anyone who spends more than three seconds looking at rental listings knows an all-inclusive $1,171 per month rental is a goddamn unicorn. Renters are already heavily rent-burdened. 

And as much as our landlords love to claim that they’re raising the rent because of property taxes, anyone who can do a little math knows that’s a lie. Sure, landlords pass on the costs of property taxes to renters, but that’s hardly the only factor at work here. Until we come up with more aggressive solutions to our housing crisis, landlords will continue to raise rents, with or without a referendum.

I live in Sun Prairie, which is not experiencing the same demand for housing as Madison, but has still had multiple rental-housing complexes open in the past few years. My rent went up $150 when we renewed in 2023, and another $100 this year. That’s $250 per month over a two year period. I personally know Madisonians whose rents have increased $200, $300, even $400—not annually, per month. This isn’t just a Madison problem—Wisconsin is one of the top 10 states for rent increases from January 2023 to January 2024. And unlike Madison’s homeowners, renters don’t have an average of $450,000 in assets.

So, the claim that this referendum will hit low-income Madisonians the hardest rings hollow. However, the cuts the City has proposed, in the event that the referendum doesn’t pass, would actually affect low-income Madison residents the most. 

Some of the biggest cuts would be to Madison’s public library system, reducing staff, cutting hours, and closing all libraries on Sundays. Libraries are one of the few remaining public spaces we have where people do not have to spend money. Our library system, in particular, is a bright spot in an otherwise bleak environment for the arts. I appreciate Mayor Satya Rhodes-Conway’s proposal to commit an additional $200,000 for the library system’s planned Imagination Center at Reindahl Park, a desperately needed facility in a growing and chronically divested segment of the city. But in Rhodes-Conway’s budget proposals, that would come at the cost of the troubled Office of the Independent Police Monitor, which was created to hold the Madison Police Department accountable for police violence. A 2019 study confirmed that police are more likely to kill residents in neighborhoods that have more low-income residents and more residents who are people of color.

Another big cut would be to Metro Transit, including reduction of morning, evening, and weekend hours. This will disproportionately affect Madison’s poorest residents and its disabled community from accessing work, healthcare, and basic amenities like groceries and socializing. It’ll also further push our reliance on private vehicles, increasing traffic, collisions, and CO2 emissions at a time when Madison is already seeing the harmful impacts of climate change.

And you know that valuable social services for the poor are going to be some of the first items on the chopping block, including “youth restorative justice programming, child care tuition assistance, and job training” according to Cap Times. 

But what about efficiency? Why can’t the City just figure out how to do more with less? Because that’s a myth created to justify corporate downsizing, even though research shows “that not only does downsizing generally fail to improve a firm’s financial performance, but that it may even lead to reduced financial performance.” Anyone who’s worked for an organization amidst budget cuts knows they are the clumsiest tools for promoting efficiency, and inevitably cut valuable people, and reduce the quality of service.

If we actually want to help low-income Madisonians, who are mostly renters, we need to change our state’s landlord-tenant laws. Renters are getting squeezed across the state because our landlord legislature changed state laws to heavily favor landlords—themselves. Ask legislative candidates what they’ll do about our rent crisis besides building more housing, and then continue to force the issue after the election.

Pushing for reforms at the state level is also a better solution for resolving Madison’s fiscal crisis and its dependence on property taxes to pay for basic services. It’s more effective than voting “No” on the referendum to save homeowners $19 a month on property taxes. We need a state legislature that will give Madison its fair share of the state’s shared revenue and repeal laws restricting our ability to, say, cut our police workforce without losing out on the shared revenue we pay into. Policing makes up an outsized proportion of Madison’s budget. If policing made us safe, the U.S. would be the safest nation in the world for all the money we throw at cops.

We could also remove restrictions on raising our own taxes, like a sales tax or—my personal favorite—a municipal income tax. Remember that gap between the average income of all Madisonians and Madison renters? It’s time for some of us to pay our fair share for city services.