Two years after Madison voters approved a $22 million property tax increase in a referendum, the city's finances remain in relatively strong shape, according to the Wisconsin Policy Forum's annual brief on Madison's next proposed budget, released October 30. The analysis finds that Mayor Satya Rhodes-Conway's 2027 budget proposal would limit the property tax levy increase to roughly the recent rate of inflation while protecting transit and expanding services in several areas. For a Midwest city in 2026, Madison remains in an enviable position, benefiting from new construction that generally outpaces the state average, low unemployment in Dane County, and a relatively strong economy.
Under the mayor's proposal, general and library fund spending would reach $477.5 million in 2027, a 5.5% jump over the prior year. While not the largest recent increase for Madison, it would exceed last year's budget and outpace inflation. The biggest areas of spending growth are additional debt payments and the fire and police departments, primarily for cost-of-living pay raises. The city property tax levy on December tax bills would climb to $337.9 million, an increase of $11.2 million, or 3.4%. The budget fully funds a new ambulance company and new library on the city's northeast side, with help from a $350,000 grant from the Madison Community Foundation to implement body cameras for most Madison police officers. City reserves would stay well above target levels, providing ample fiscal cushion.
The report finds that Madison transit revenues still haven't recovered from the pandemic's effects, making transit a key area to watch. 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 behind ridership growth and hasn't 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 address the agency's lingering funding challenges, the mayor's 2027 budget includes a proposed $25.5 million transfer from the city's general fund.
The report cautions that the city's budget shows some signs of pressure despite its current strength. Relatively rapid growth in spending and tight limits on local revenues like the property tax are likely to open 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 could otherwise be used for capital needs such as bus purchases. With the city's East-West Bus Rapid Transit line up and running, attention has now shifted to the proposed North-South line, currently in the final design phase, but this buildout comes with significant questions about the sustainability of Metro Transit funding. The budget would maintain city reserves at very robust levels, but the city's long-term plan calls for them to be drawn down significantly—a move the report notes could work for a few years but couldn't be sustained indefinitely without major tradeoffs.