Two years after Madison voters approved a $22 million property tax increase for the city in a referendum, the city’s finances, services, and infrastructure remain in a relatively strong position. According to the Wisconsin Policy Forum’s annual brief on the city of Madison’s next proposed budget, it would limit the property tax levy increase to roughly the recent rate of inflation while protecting the transit system and bolstering services in some areas.
The city benefits from rates of new construction that generally outpace the state average, low unemployment rates in Dane County, and a relatively strong economy. For a Midwest city in 2026, Madison remains in an enviable position. This enables Mayor Satya Rhodes-Conway to make new investments in her 2027 budget proposal, which will be taken up by the Madison Common Council in coming weeks.
It provides raises for city employees and fully funds a new ambulance company and new library on the city’s northeast side. With the help of a $350,000 grant from the Madison Community Foundation, the budget would implement body cameras for most Madison police officers. And city reserves would remain well above target levels, providing ample fiscal cushion.
At the same time, the city’s budget shows some signs of pressure. Relatively rapid growth in spending and tight limits on local revenues like the property tax are likely to open up gaps in future budgets, and a relatively fast-growing population means city staff and resources are being spread more thinly. The city also covered Madison Metro Transit’s operating shortfall in this budget with federal money that in part could otherwise be used for capital needs such as bus purchases.
Under the mayor’s proposal, general and library fund spending would total $477.5 million in 2027, a
5.5% increase over the prior year. While not the largest recent increase for Madison, it would be more than last year’s budget and outpace the rate of inflation. Top areas of spending growth are for
additional debt payments, as well as for the fire and police departments, primarily to give cost of living pay increases.
The city property tax levy on December tax bills would grow to $337.9 million, an increase of $11.2 million, or 3.4%. That would be more than the prior year’s increase but still roughly the rate of inflation.
Madison transit revenues still have yet to recover from the effects of the pandemic, making transit a key area to watch in this budget. The 12-month period from September 2025 to August 2026 marked the first post-pandemic year in which monthly average ridership topped 1 million riders, nearing the pre-COVID monthly average. However, revenue growth lags the growth in ridership and has not increased as much as expected. Revenue from sources including fares in 2027 is projected to remain 16.2% below 2019, before adjusting for inflation. To respond to the agency’s lingering funding challenges, the mayor’s 2027 budget includes a proposed $25.5 million transfer from the city’s general fund.
Looking ahead, with the city’s East-West Bus Rapid Transit (BRT) line up and running, attention has now shifted to the proposed North-South line, currently in the final design phase. Yet this buildout comes with significant questions about the sustainability of Metro Transit funding.
The budget also would maintain city reserves at very robust levels. However, the city’s long-term plan calls for them to be drawn down significantly – a move that could work for a few years, but could not be sustained indefinitely without major tradeoffs.
