Clear: Council has a 'moral obligation' to fund Overture.
Council members will propose restoring $900,000 of the $1 million that Mayor Paul Soglin cut from the Overture Center. And they have enough sponsors -- 14 -- to override a mayoral veto.
If approved, the total subsidy for Overture would be $1.75 million, which is $100,000 less than this year's contribution.
Ald. Mike Verveer says the council members found the money without adding to the tax levy. The money comes from the so-called premium on city debt: a bonus that finance institutions pay in advance in exchange for imposing a higher interest rate throughout the life of the loans.
This year, the city's premium was $4.3 million. The city was going to use some of that money to pay for a new roof at Olbrich Gardens. If the Overture amendment is approved, the city will borrow next year for the roof, Verveer says.
"We're simply moving pots of money around," he says.
But Ald. Satya Rhodes-Conway opposes the move, saying it creates a structural deficit by using a onetime bonus to fund an ongoing expense. "It's incredibly fiscally irresponsible, and I'm frankly shocked that 14 of my colleagues would support this."
Several other amendments are likely, including money to restore park services, avoid a 25-cent bus fare hike, and restore overtime pay for trash pickup. These items are less expensive than Overture's subsidy.
Money is especially tight this year, after the state put caps on municipal tax increases. Madison can only raise the levy by 3.4% unless it gets approval in a referendum. Soglin's $266 million budget raises taxes by 2.4%.
Several council members feel obligated to give more to Overture. Two years ago, when the council negotiated a restructuring of the arts center, it promised to contribute $2 million a year. It has yet to keep that promise, made under Mayor Dave Cieslewicz, who lost his seat to Soglin in early 2011.
Ald. Mark Clear says the city has "a moral obligation" to keep its financial commitments. "We asked for a number of things from Overture. Overture has fulfilled all of those commitments," he says. That includes meeting a higher fundraising goal.
Last year Soglin proposed funding the arts center at $1.35 million, but the council provided an extra $500,000. This year, Soglin cut Overture's subsidy even further, proposing $850,000 -- a $1 million cut from last year.
Overture officials aren't happy. [Editor's note: Isthmus associate publisher Linda Baldwin is a member of the Overture Center Foundation's board of directors.]
"What we forged two years ago was a real public-private partnership," says Overture spokesman Rob Chappell. "And it could have broader effects if the city is seen as not honoring those public-private partnerships."
But Rhodes-Conway says there are dangerous long-term effects to the budget maneuver the alders propose. "For ongoing operating expenses that you know you're going to have every year, the only fiscally responsibly thing to do is to use money you know is going to be there," she says. "The city of Madison has a long history of responsible budgeting. Other cities do things like this and it gets them in trouble."
Soglin threatened vetoing the 2012 budget during an all-night council meeting last November, partly over Overture funding. The council avoided that scenario with some hasty last-minute amendments. Alders remember the threat.
Soglin prides himself on being a straight shooter, but he won't say where his line in the sand is. In a phone interview Tuesday, he was nonchalant about a council showdown.
"The council has to make a decision on the budget," he says. "We'll worry about it if it occurs."
