By Dr. Richard Busalacchi
Franklin Community News
A discussion during Franklin’s June 23 Finance Committee meeting has raised important questions about the City’s financial future and what it could ultimately mean for taxpayers.
While reviewing preliminary financing scenarios for the City’s 2027 budget and capital improvement program, Finance Director Danielle Brown told committee members that borrowing approximately $10 million could translate into roughly a 4% to 4.5% increase in the City’s portion of the average property tax bill. The estimate was presented during a discussion of debt financing options and was not an approved tax increase. Any future levy increase would require action by the Common Council during the 2027 budget process.
Although no budget decisions were made, the discussion offered one of the clearest public examinations to date of the financial issues that will shape Franklin’s 2027 budget.
Limited Revenue Growth Creates Budget Pressure
Finance Director Brown explained that Wisconsin’s levy limit law continues to restrict the City’s ability to increase operating revenue.
Based on preliminary estimates, Franklin expects approximately $50 million in net new construction, which would generate only about $167,000 in additional operating levy capacity under current law.
Committee members acknowledged that while new development continues throughout Franklin, the additional operating revenue generated by levy limits is small when compared to projected increases in wages, benefits, equipment replacement, and infrastructure costs.
The discussion quickly evolved beyond next year’s budget into a broader conversation about whether the City’s current financial model can remain sustainable over the long term.
Personnel Costs Continue to Rise
Throughout the meeting, officials repeatedly emphasized that personnel costs represent the largest component of Franklin’s operating budget.
Mayor John Nelson explained that approximately 80 percent of the City’s share of property tax revenue is devoted to employee compensation and benefits, leaving relatively little flexibility as labor costs continue to increase.
Among the financial pressures discussed were:
- A previously approved 4 percent wage increase for police employees, estimated to cost approximately $700,000 annually.
- Pending labor negotiations with the Fire Department.
- Salary adjustments for non-represented employees.
- Rising benefit costs.
Former Finance Director Paul Ratzenberg noted that when revenues remain relatively flat while personnel expenses continue increasing, difficult choices become unavoidable.
“If one major category continues to increase,” Ratzenberg explained, “other kinds of costs are going to have to give.”
Budget Reductions May No Longer Be Sustainable
Committee members also discussed efforts made during last year’s budget process.
Departments were asked to reduce proposed expenditures by approximately five percent to help balance the budget.
While those reductions achieved short-term savings, officials acknowledged that continuing to defer spending may become increasingly difficult.
Brown noted that the Fire Department has already exceeded its overtime budget while Public Works has delayed projects by leaving positions vacant.
Fire Chief Adam Remus explained that although vacant positions have reduced salary costs, overtime has become necessary to maintain emergency staffing levels. The department remains below its overall personnel budget only because several authorized positions remain vacant.
Committee members observed that delaying maintenance, equipment replacement, or hiring may reduce costs today but often results in higher expenses later.
Millions in Capital Improvements Still Need Funding
The committee reviewed approximately $8 million in capital projects that have largely already been approved or committed, including:
- Road reconstruction
- Fire station improvements
- Fire apparatus
- Department of Public Works equipment
- Municipal building improvements
- Other infrastructure projects
Officials also discussed expanding that borrowing package to approximately $10 million, depending upon final capital priorities.
Much of the discussion centered not on whether these projects are necessary, but how they should be financed.
TIF Districts Play an Important Role in Franklin’s Financial Picture
Tax Increment Districts also became an important part of the discussion.
Finance Director Brown indicated that future TID-related infrastructure may require an additional $8 million to $10 million in borrowing if planned redevelopment projects proceed.
Former Finance Director Ratzenberg explained that Franklin has adopted an internal policy limiting how much debt the City wants to carry, even though Wisconsin law would permit substantially higher borrowing.
As a result, borrowing for redevelopment infrastructure must compete with borrowing for roads, public safety facilities, equipment replacement, and other citywide priorities.
Committee members also discussed delayed infrastructure associated with TID No. 8, including Elm Road.
According to the discussion, development proceeded with the expectation that additional infrastructure would eventually be constructed. However, officials noted that the tax increment generated within the district has not yet produced sufficient revenue to support all planned improvements.
The committee described the situation as a difficult balancing act.
Constructing infrastructure can encourage additional development, but borrowing to build that infrastructure requires confidence that future tax increment will ultimately repay the debt.
Borrowing Today Means Paying Tomorrow
One of the evening’s longest discussions centered on debt financing.
Ratzenberg explained that every dollar borrowed today ultimately requires taxpayers to repay both principal and interest.
Using a mortgage analogy, committee members compared repayment schedules over 10, 15, and 20 years.
Longer repayment periods reduce annual debt payments but increase total interest costs.
Shorter repayment schedules save interest but require larger annual debt-service levies.
A Potential 4% to 4.5% Property Tax Impact
Near the conclusion of the meeting, Brown estimated that borrowing approximately $10 million could result in roughly a 4% to 4.5% increase in the City’s portion of the average property tax bill.
The estimate was provided during discussion of financing scenarios and should not be interpreted as a decision by the Finance Committee or Common Council.
Any future property tax levy will be determined during the City’s annual budget process following additional committee review, public discussion, and action by the Common Council.
A Recommendation to Gradually Increase Debt Levies
Ratzenberg recommended gradually increasing Franklin’s debt-service levy over several years rather than postponing adjustments until larger increases become necessary.
Historically, Franklin has levied less than its maximum allowable debt-service levy, helping keep taxes lower while reducing funds available for operations.
He argued that smaller, incremental adjustments may be easier for taxpayers to absorb than larger increases implemented all at once.
The committee voted to forward that recommendation to the Common Council for future consideration.
Landfill Revenue and Shared Services Also Discussed
Officials also acknowledged that Franklin’s annual landfill siting revenue—currently about $2.5 million—will not continue indefinitely.
That revenue has helped finance capital improvements for years, and future councils will eventually need to identify alternative funding sources.
Committee members also discussed potential long-term cost savings through shared municipal services, including possible regional partnerships for health department operations and other governmental functions.
Former Finance Director Takes Lead Role in Technical Discussion
Although Finance Director and Treasurer Danielle Brown presented portions of the June 23 budget discussion, much of the committee’s detailed conversation regarding debt management, levy strategy, capital borrowing, and long-term financial planning was led by former Franklin Finance Director Paul Ratzenberg. Ratzenberg responded to numerous questions from committee members, explained the City’s historical borrowing practices, and offered recommendations regarding future debt-service and levy strategies.
The City’s job description identifies the Director of Finance & Treasurer as the official responsible for leading the City’s financial operations, including budget development, debt management, bond issuance, investment of City funds, oversight of Tax Increment District finances, and providing financial guidance to the Mayor, Finance Committee, and Common Council.
Brown joined the City of Franklin in July 2023 after serving as Deputy Treasurer for the Village of Waterford. Prior to that, she worked for Cancer Treatment Centers of America while completing accounting degrees at Gateway Technical College and the University of Wisconsin–Parkside. Mayor John Nelson previously served as a police lieutenant in Waterford before "retiring" amid an ongoing investigation.
While Brown serves as Franklin’s Finance Director, Ratzenberg’s extensive participation in the June 23 meeting reflected his continuing role to the City and his familiarity with Franklin’s long-term debt structure and financial history.
What Happens Next?
The June 23 Finance Committee meeting marked the beginning—not the conclusion—of Franklin’s 2027 budget process.
Over the coming months:
- Department heads will submit budget requests.
- The Mayor will prepare a recommended budget.
- The Finance Committee will continue reviewing revenues, expenditures, and borrowing plans.
- The Common Council will ultimately determine the City’s operating budget, capital improvement plan, and property tax levy.
While many questions remain unanswered, the discussion made one point clear: Franklin’s elected officials face increasingly difficult decisions as they work to balance infrastructure needs, employee compensation, redevelopment projects, and taxpayer affordability.
Understanding TIF: Why New Development Doesn’t Immediately Fund City Services
One of the most misunderstood aspects of municipal finance is Tax Increment Financing (TIF).
When a Tax Increment District is created, increases in property taxes generated by new development are generally dedicated to repaying redevelopment costs such as roads, utilities, public infrastructure, land acquisition, and debt issued to support the project.
Those additional taxes do not immediately become available to support the City’s General Fund, police, fire, parks, or other municipal services.
Only after a TID closes do the increased property values become part of the City’s regular tax base, benefiting the City, Franklin Public Schools, Milwaukee County, MATC, and other taxing jurisdictions.
During the June 23 meeting, officials discussed how future TID infrastructure may require $8 million to $10 million in additional borrowing, illustrating how redevelopment often requires significant upfront investment before its long-term tax benefits are realized.
FCN Analysis
The June 23 Finance Committee meeting provided one of the most comprehensive public discussions of Franklin’s financial outlook in recent years. Rather than focusing solely on the 2027 budget, officials examined broader issues affecting the City’s long-term fiscal health, including levy limits, personnel costs, capital borrowing, Tax Increment District financing, infrastructure investment, and debt management.
Although no property tax increase has been proposed or approved, the discussion underscored the difficult fiscal choices facing the City as budget development continues. Those decisions will unfold over the coming months through additional Finance Committee meetings and Common Council deliberations before the 2027 budget is ultimately adopted.
This piece reflects the author’s personal opinion and experiences. All statements are presented as commentary protected under the First Amendment. Readers are encouraged to review public records, filings, and documented evidence referenced throughout this article.
Dr. Richard Busalacchi is the Publisher of Franklin Community News, where he focuses on government transparency, community accountability, and local public policy. He believes a community’s strength depends on open dialogue, honest leadership, and the courage to speak the truth—even when it makes powerful people uncomfortable.
🕯️ The solution isn’t another insider in a new office. It’s sunlight, scrutiny, and the courage to vote differently.
Because until voters demand honest, transparent government, the corruption won’t stop — it will only change titles.
Elections have consequences — and Franklin’s next one may decide whether transparency makes a comeback.
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💬 If you value hard-hitting, fact-based investigative reporting about our hometown of Franklin — follow Franklin Community News on Facebook.
Together, we can keep local government honest, transparent, and accountable
— for the greater good.
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