Marathon County braces for federal, state cuts

Uncertainty surrounding state and federal budgets – including talk of massive cuts to health and social services — has Marathon County officials bracing for a 2026 budget that will likely have to get by without as much help from Madison and Washington, D.C.

“There’s just more uncertainty in that respect that we’ve seen in the past,” county administrator Lance Leonhard told supervisors during a budget kickoff presentation delivered during the county board’s June 19 educational meeting.

With both state and federal lawmakers in the midst of developing their budgets for the next one or two years, county officials are just getting started with their discussion on next year’s budget. Besides the kickoff presentation on June 19, supervisors have also been presented with the first draft of the 2026 capital improvement plan, which includes $10 million in requests at this point.

Supervisor John Robinson, chair of the Human Resources, Finance and Capital Committee, said the budgeting process has been made more complicated by the fact that the county’s budget follows the calendar year, Jan. 1 through Dec. 31, while the federal government’s fiscal year starts on Oct. 1 and the state’s biennium budget is supposed to start on July 1 (it is still being negotiated by the legislature).

As a result, county officials won’t know until later in the year how much money the county can expect to receive through grants and other budget allocations for programs that it administers on behalf of the state and federal government.

Nearly 30 percent of the Health Department’s funding comes from the federal government, Robinson noted, and if lawmakers follow through on cutting those funds, county supervisors could be left with some tough decisions to make between now and November when the budget is adopted.

Leonhard said one of the areas slated for cuts is the federal Public Health Emergency Preparedness Program (PHEP), which is used to help local health departments respond to public health emergencies such as natural disasters, disease outbreaks and bioterrorism.

Wisconsin’s public health departments received $5.2 million in PHEP money for 2023-2024, and Marathon County’s share is estimated to be around $100,000, so the county is already developing strategies for how to respond if that money goes away, he said.

“We will have a plan for you as to what that looks like,” he told supervisors at a June 24 HRFC meeting.

Even more concerning are the proposed cuts to Medicaid, which provides health insurance for low-income individuals so they can afford medical services, he said.

“Depending on what comes down, those are the revenues that would be much more of a challenge,” Leonhard said, noting that North Central Health Care relies heavily on Medicaid reimbursements to pay for the services its provides. Other programs, such as Comprehensive Community Services and Children’s Long Term Support, are also at risk of losing federal funding, he added.

The state could decide to step in and fill some of the funding gaps left in the next federal budget, he said, but county officials still need to be prepared to make decisions at the local level.

“We’ll find out more as time goes on,” Leonhard said.

Supervisor Ann Lemmer, who represents Marathon County at the Aging and Disability Resource Center of Central Wisconsin (ADRC-CW), said she also worries about the impacts of federal cuts on that agency, and on the FoodWIse program, which provides nutritional education and is partially funded by the federal Supplemental Nutrition Program - Education (SNAP-Ed), another program potentially on the chopping block.

Generally speaking, Robinson said the county’s policy is to discontinue programs if their outside funding source goes away rather than trying to cover the cost with local tax dollars. With that mind, Lemmer said she would like to be proactive in trying to prevent layoffs or service cuts.

“If it’s our responsibility as a board to decide if we’re going to protect these positions, I’m going to need a list of potential positions that could go, so I know in advance who or what programs I think are important that I would advocate for,” she said.

Board chairman Kurt Gibbs said it’s too early in the process to know what cuts will go through at the federal level, but he emphasized the need for the county’s standing committees, which each oversee different departments, to be engaged in the discussions ahead of time and focus their attention on programs, not positions.

“If we’re going to cut services, we need to do it strategically and we need to have that direction from those standing committees to administration early,” he said.

When it comes to the county’s local sources of revenue, finance director Sam Fenzke told the board that the property tax increases allowed under state law restrictions have been lagging behind inflation for years now, creating a $5 million gap between what the county takes in every year and how much prices have gone up.

“It’s particularly problematic if we’re considering the inflation we’ve seen in certain areas, such as goods and equipment, which have certainly increased higher than general inflation,” she said.

Property tax hikes are limited to the percentage of net new construction within the county each year, which usually ranges between 1.59 to 2.32 percent, Fenzke said. Last year, that equated to an allowable tax increase of about $900,000 for 2025, Leonhard noted.

One source of funding that is going away next year is the American Rescue Plan Act, which was signed into law by President Biden in 2021 to help local governments deal with the aftermath of the COVID-19 epidemic. The $21 million that Marathon County received has either been spent or is allocated to be spent by the end of 2026.

“That really helped counties,” Leonhard said. “We did a lot. The board was really strategic with those funds.”

As the county embarks on its next budget process, Robinson reminded supervisors that not all spending cuts they propose will cut county taxes, as the money comes from multiple different sources.

“Sometimes, if you make cuts you don’t knock the levy down as much as you knock our spending down,” he said. “So, it’s important that you factor in, when you’re looking at cuts, what the implications are, because not all dollars are equal.”

Based on the county’s established timeline, the board will be asked to officially establish budget priorities and assumptions over the next couple of months for Leonhard to follow when putting together his proposal. Leonhard is scheduled to deliver that proposal to the board on Sept. 30, after which it will be up to supervisors to propose amendments before and after a public hearing is held in October, prior to budget adoption in November.

Between now and then, Gibbs said it’s critical for supervisors to be fully involved in the budgeting process through their committees, which are regularly asked to review mandatory and discretionary programs and consider possible fee increases for services.

“The biggest policy document that this board undertakes is the development of the budget because it sets our priorities, it sets our programming and it delivers the services that the citizens of Marathon County expect,” he said.