MENOMONIE, Wis. — Dunn County officials are having difficult 2027 budget deliberations as projections show the county has an estimated $1.4 million gap in next year’s budget. 

“We are at the point where we are going to be reducing the level of services we provide to the public,” said County Manager Dan Dunbar about the prospects for the 2027 budget. 

The projected shortfall is the result of state-imposed limits on property tax increases, employee compensation and benefits increases, inflation, increasing operational costs and growing human services placement expenses, Dunbar said, adding the problem is not with one department or program but reflects broader financial trends affecting local Wisconsin governments. 

“We just can’t raise enough money under the state’s current fiscal restrictions to pay for basic services, while trying to keep our valuable employees,” Dunbar said.  “Costs are rising faster than our ability to pay for programs and services.” 

Dunbar cautioned that “there are no easy cuts” and services to the public will be affected. 

Under Wisconsin’s levy limit law, counties are restricted in how much they can increase property taxes each year. Costs associated with providing services have continued to rise, but local revenue growth has remained limited, officials said. 

County officials note that inflation has increased nearly 50 percent since 2010, while Dunn County’s net new construction growth, which determines levy increases, has grown by 22 percent. County officials said that a service costing $100 to provide in 2010 now costs approximately $150, while the revenue to fund that same service has risen to only about $122. 

Dunbar said the cost to provide employees with market-level salaries and the rising cost of living  exceeds the amount of revenue available.  Officials estimate that rising health insurance expenses currently consume roughly two-thirds of the county’s available annual revenue growth, he added. 

Dunn County also is expecting a significant increase in human services placement expenses, which is a mandatory expense for Wisconsin counties. Current projections indicate approximately $1.2 million in placement-related costs for 2027. Officials said placement expenses are already exceeding budgeted levels in 2026 and remain difficult to predict. 

Dunbar said the County Board has taken measures in recent years to reach a balanced budget, including using salary savings via staff turnover and indirect cost allocations that recover administrative expenses from programs supported by outside funding. Those efforts helped balance budgets in past years, but don’t provide ongoing relief, he said.  

County staff estimate that there remains a gap of roughly $200,000 between anticipated new revenue and projected salary and benefit increases in 2027. When combined with the anticipated increase in placement costs, the total budget gap reaches approximately $1.4 million. 

To address the shortfall, the County’s Executive Committee has discussed a plan that would use $700,000 from County’s fund balance to offset a portion of the placement costs while requiring approximately $700,000 in ongoing expenditure reductions during 2027. The plan also anticipates an additional $700,000 in recurring reductions in 2028 to strengthen the county’s long-term financial position. 

Department heads have been asked to identify potential efficiencies, savings and expenditure reductions for consideration during the upcoming budget process. Saving $700,000 annually will require slightly more than a 2 percent reduction in departments that are funded by the property tax. Of the county’s total budget, about 30 percent is funded by the property tax. 

Dunbar said the budget will go to the County Board in the middle of October.  A public hearing will be held Nov. 10.    

Alongside discussions about balancing the operating budget, county officials are also working to establish a more sustainable funding strategy for the county’s Capital Improvement Plan (CIP), which funds major infrastructure, facility and equipment investments. 

The county has relied on a mix of funding sources for capital projects, including using the fund balance, borrowing and one-time federal funds. Since 2021, CIP projects have been financed through varying approaches depending on available resources.  

To create greater predictability, the Executive Committee has endorsed a plan to establish a dedicated funding source for future capital projects. The strategy would separate capital investment decisions from annual operating budget pressures and provide clearer financial boundaries for future boards, officials said.