COUNTY – Waupaca County’s projected operating deficit for 2027 has grown from an initial $1.2 million to about $3.2 million, Finance Director Heidi Dombrowski told the County Board Sept. 15.
The deficit is driven by depleted cash reserves, strict state property tax limits, decades of flat state aid for mandated services, and sharp increases in employee health care and wage costs.
Initial budget reports cited a projected shortfall of $1.2 million, which later rose to $2.3 million in preliminary working drafts. The earlier estimates assumed the county would use $1 million in cash reserves to cover major capital projects, such as replacing the Law Enforcement Center’s cooling system, rather than count those costs toward the operating deficit, Dombrowski said.
Dombrowski presented the official 2027 proposed budget worksheet at last week’s county board meeting, which showed that the county’s total operating revenues are projected to grow by just 0.78% to $66 million, while total operating expenses will rise 3.84% to $57.8 million.
The primary expenses contributing to the deficit include a projected 10% surge in health insurance premiums costing $600,000, and a baseline 2.5% employee wage increase estimated at $625,000. Contracted service costs across departments also have jumped between 5% and 10%.
Data presented at the county board meeting shows a shift in Waupaca County’s financial health over the past seven years. Between 2020 and 2023, the county consistently generated annual fund balance surpluses, peaking at $4.85 million in 2022. In 2024, rising costs began outpacing revenue caps, forcing the county into recurring fund balance deficits.
Dombrowski cautioned supervisors against continuing to draw from reserves to subsidize daily county operations, warning that doing so would compromise cash flow and leave the county in a deeper hole for 2028.
Multi-year financial modeling shows that if current spending trends continue without transitioning capital projects to bonding or implementing structural cuts, projected annual operating deficits will escalate to $9.6 million in 2028 and $7.3 million in 2029.
Dombrowski told the county board that under state statute, county operating property tax levies cannot be raised to match general inflation, and are capped by the percentage rate of net new construction.
Between 2010 and 2025, cumulative consumer price index (CPI) inflation climbed 49.9%. Over that same 15-year period, Waupaca County’s cumulative net new construction grew by only 15.5%, leaving county revenue growth 34.4% behind real-world cost increases, she said.
Waupaca County ranks in the bottom 30% of all 72 Wisconsin counties for new construction growth. For the 2027 budget, the state Department of Revenue calculated Waupaca County’s net new construction rate at 1.12%, generating $286,223 in allowable new property tax levy. That addition covers only 0.5% of overall annual operating costs. At the same time, state funding for mandatory programs like Human Services has remained completely flat for 30 years.
During the county board meeting, Supervisor Joel Bartel introduced a motion that would require the Finance Committee to present a budget proposal with $3.3 million in direct departmental spending cuts before considering any tax or borrowing options.
Corporation Counsel Andy Phillips intervened, advising supervisors that taking binding legislative action on budget cuts during an agenda item noticed only for discussion violated Wisconsin’s Open Meetings Law. Phillips said the public must receive advance notice before the board votes on major financial mandates.
Supervisors discussed alternative cost-saving ideas such as employee furloughs, eliminating non-mandated community programs, or trimming operational items like paper and lighting.
At the Sept. 16 Finance Committee meeting, Dombrowski said the county is transitioning from funding capital projects with cash on hand to financing them through planned bond issuances.
Waupaca County historically avoided debt by spending down cash reserves to pay for road building and facility upgrades. With reserves exhausted, Dombrowski recommended issuing debt in two-year increments to finance long-term projects, such as highway reconstruction, cooling systems, and building maintenance, spreading capital costs over 10 to 30 years.
Alongside those long-term financing changes, the county is also taking steps to limit spending. The Human Resources Department has placed a hold on new position requests across all county departments, according to discussion at the meeting.
Dombrowski said there are limits to how much the county can save through administrative cuts. Eliminating the Human Resources, Finance and Information Technology departments, for example, would appear to save a combined $3 million, but the county would need to contract out those services, offsetting the savings, she said.
Dombrowski presented data comparing Waupaca County spending against statewide county medians, which shows the county invests significantly above statewide medians in highway construction and public safety, with human services and debt payments right at statewide averages.
Though the county is projecting a budget deficit, the county portion of property tax bills are expected to decrease due to a 9.73% increase in countywide equalized property values.
For 2027, Waupaca County homeowners will see an 8.26% reduction from $4.21 to $3.87 per $1,000 of assessed value. For a Waupaca County homeowner with a property valued at $192,800, the county portion of the property tax bill will fall from $812.52 to $745.40, amounting to an average annual tax bill savings of $67.12.
The first formal reading of the county’s proposed 2027 budget is set for Oct. 27, with a public hearing and final county board vote set for Nov. 10.
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