Taxpayer Alliance: Municipal Debt Rising Rapidly

MADISON—Per capita debt in Wisconsin’s largest municipalities increased markedly over the past
decade, according to the nonpartisan Wisconsin Taxpayers Alliance (WISTAX). In a study of 228 Wisconsin
cities and villages, WISTAX found that average per capita debt rose from $712 in 1994 to $1,234 in 2004,
an increase of 73.4%, or an average of 5.7% per year.
WISTAX also noted that 2004 marked the first time in state history that any municipalities exceeded
$5,000 in per capita debt. Pleasant Prairie ($5,341) and Glendale ($5,082) shared this record, while no other
communities exceeded $4,000 in per capita debt.
Since state law ties debt limits to property values, and values escalated considerably from 1994 to
2004, the amount of debt municipalities could carry increased rapidly. When measured as a percentage of
state limits, allowable municipal debt actually decreased over the decade, WISTAX said. In 2004, the cities
and villages held 39.2% of their maximum debt, down from 41.5% in 1994 and 41.7% in 1999.
WISTAX found two communities with debt exceeding 97% of their limits: Wautoma (97.5%) and
Pleasant Prairie (97.2%). No other communities had more than 85%, but Mukwonago (83.3%), Oconto
Falls (83.3%), and Menasha (81.3%) all exceeded 80%. By contrast, in 13 of the 228 municipalities, debt
was under 10% of the maximum. Two municipalities, Stanley and West Salem, were debt-free. It was the
15th consecutive year that West Salem did not incur any long-term general obligation debt."

It is important to monitor municipal debt, WISTAX noted, because it is a key factor in determining
credit ratings, which in turn affect the interest rates cities and villages are charged. Also, indebtedness
usually requires regular payments that impact municipal budgets and property taxes.
For a free copy of The Wisconsin Taxpayer containing the article “Municipal Debt,” write WISTAX,
401 North Lawn Ave., Madison, WI 53704-5033; e-mail wistax@wistax.org; visit www.wistax.org; or phone
608.241.9789. !
Contact: Ryan Parsons or Todd A. Berry
608.241.9789 or wistax@wistax.org
July 12, 2006
The Wisconsin Taxpayers Alliance, founded in 1932, is the state’s oldest and most respected private government-research organization. Through
its research, publications, civic lectures, and school talks, WISTAX aims to improve Wisconsin government through citizen education. Nonprofit,
nonpartisan, and independently funded, WISTAX is not affiliated with any group—national, state, or local—and receives no government support.
Wisconsin Taxpayers Alliance
401 North Lawn Avenue • Madison, WI 53704-5033
www.wistax.org • 608.241.9789 • fax: 608.241.5807
wistax NEWS

Municipal Debt Grows Rapidly
WISTAX Examines City and Village Debt