La Crosse mayor and finance staff present 2027 budget parameters; levy could rise about 21% without cuts

The mayor and the city’s deputy finance director presented preliminary parameters for La Crosse’s 2027 operating budget on June 30, showing a projected increase in expenses and several levy scenarios the council must weigh before the Board of Estimates and Common Council hearings.

Deputy Director Dan DeGeer told the council the 2026 operating budget expenses were $74,000,000 and the presentation’s baseline adds estimated expense increases of $8,200,000—about an 11% rise—bringing total expenses to roughly $82,300,000. He said operating revenues are estimated to fall about $360,000 to roughly $31,000,000. “The 2026 levy was $42,600,000,” DeGeer said; under the worksheet’s baseline, the city would need an $8,600,000 increase to the levy—about a 21% rise—to cover the gap and reach a $51,300,000 levy.

Why it matters: those headline numbers set the structure staff will use to produce recommended budgets. DeGeer described three constraints that will shape decisions: the state-imposed levy limit (tied to net new construction, with exceptions for debt or referendum), participation in the Expenditure Restraint Program (ERP) that caps allowable operating expense growth but provides state aid, and a maintenance-of-effort requirement for public safety that carries a potential 15% penalty on shared revenue for noncompliance.

The presentation included several specific, funded changes. DeGeer said the worksheet fully funds personnel costs and noted line items for a July 1 step increase for non-represented employees ($309,000) and a 3% cost-of-living adjustment for non-represented employees ($588,000). The budget restores six previously unbudgeted positions from 2026—three police officers and three firefighters—and one grant-funded police officer, a package the presentation identified as $716,000.

On public-safety overtime and premium pay, the Chief explained that prior budget practice had underfunded overtime and some premium-pay accounts; the current worksheet builds in a line (line 8) of $758,500 to reflect the full and true cost of overtime, premium payouts and specialized premium pay such as field-training officers and K-9/ER team assignments. “This budget … is fully funding those costs to make sure that all of us can look at this as a true cost to what public safety would essentially cost within a budget year,” the Chief said.

Health benefits are another major pressure. The Human Resources director presented a projected 30.5% increase in health‑plan costs for 2027—about $2,600,000—if the city maintains the current plan design. She said the Employee Benefit Trust Fund Committee will hold an informational meeting at 1 p.m. Friday, July 10, to discuss plan-design options and approaches to manage rising health-care costs.

Transit also accounts for a notable adjustment. Adam, the director of transit, said the proposed $1,200,000 increase in the transit subsidy is the local match needed as pandemic-era federal and state backfill (CARES/ARP) is exhausted; the increase is intended to “make the transit department whole again” and restore the local dollars that normally fund salary and benefit costs and operations.

DeGeer laid out three levy scenarios for the council’s consideration: (1) make no adjustments to expenses or revenues, which produces a levy of about $51.3 million; (2) cut about $5.7 million in expenses to meet ERP, producing roughly a $45.5 million levy; or (3) cut about $8.3 million to hold property-tax dollars roughly steady, producing an estimated $42.9 million levy (these scenarios assume assessed-value growth of around $75 million). He also said the city’s unassigned fund balance was preliminarily estimated at $19,700,000 as of Dec. 31, 2025—about $4,900,000 above the city’s 20% policy minimum—giving the council a limited reserve that could be used but would reduce the buffer for future shocks.

Council response mixed between caution and pragmatism. Council member Janssen urged that any scenario showing a maintained mill rate be paired with specific service-level tradeoffs so the public can weigh priorities: “presenting a budget that maintains the mill rate is important, but you can’t just provide that … it needs to be provided with very specifics of what services would actually be provided and which services would be eliminated,” Janssen said. Council members proposed that staff present a menu of scenarios (including maintaining ERP, a 3% tax-increase scenario, and a no‑tax‑increase but substantial cuts scenario) and noted the importance of protecting fund balance given future uncertainties.

What happens next: staff will prepare multiple scenarios for the Board of Estimates and council hearings, including budgets that maintain ERP, that assume a modest tax increase (one council member asked for a 3% scenario), and that aim to hold the mill rate. The deputy director noted that ERP participation influences state aid estimates (ERP payments vary by how many municipalities opt in) and that some revenue elements (e.g., the ERP payment) are not finalized until later in the process.

The council approved the Board of Estimates working-session dates and times (Sept. 1 and Sept. 2 as a first round; Oct. 12 and, if needed, Oct. 13 as a second round, with Oct. sessions set at 4 p.m.) and added a separate public information meeting to occur after the Sept. 1 meeting but before Oct. 12 for staff to present detailed cut options and solicit public feedback before final recommendations.