SUN PRAIRIE RISING

by Andy Schoenherr
Editor, Sun Prairie Rising
Bill Connors provided additional background and analysis

In parts of the community, there’s a common refrain that the City of Sun Prairie “needs to live within its means.” But a closer look at the city’s finances shows the reality is more complicated.

Unlike state or federal governments, Sun Prairie does not have an income or sales tax. Its primary source of revenue is the property tax.

And unlike most households, which must adjust spending to match income, municipalities operate in reverse.

With income or sales taxes, governments generally set tax rates and then adjust spending to match the revenue those rates generate. Sun Prairie operates differently. In conjunction with the city staff, the Mayor and City Council first determine how much to spend, develop a budget, and then set the total property tax levy—the amount collected from taxpayers—to raise only enough revenue to cover costs.

As a result, Sun Prairie has consistently balanced its budget each year.  However. recent events, including the failure of the proposed tax referendum earlier this month—highlight how difficult that may become in the near future.

At its core, the issue facing the city is not whether the budget is balanced, but how the city pays for services as costs rise and revenue limits tighten.

A key source of confusion is the difference between the tax rate and the total tax levy.

The tax rate (or “mill rate”) is the amount charged per $1,000 of assessed property value. One mill equals $1 for every $1,000 of value.

In the past five years, Sun Prairie’s mill rate has ranged from about 6.34 to 7.51. At the same time, property values have increased—sometimes significantly.

That matters because even if the tax rate stays the same, rising property values mean higher total tax bills.

If the city had simply held its property tax rate constant at the 2022 level—$7.5101 per $1,000 of assessed value—it would actually be collecting significantly more money today due to rising property values. That would mean higher total spending and larger tax bills, even though the rate itself stayed the same.

Instead, the city has adjusted its rate over time. In other words, the city’s approach to balancing the budget has actually resulted in lower tax rates than a “do nothing” scenario would have produced.

While you hear a lot of complaints about taxes going up, it’s primarily due to rising property values, which typically outpace inflation.  In most cases, tax rates decrease as property values increase, with the levy adjusted to balance the budget.

What Residents Are Paying in 2026

For 2026, the approved budget includes:

• A 7.0% increase in the TOTAL property tax levy
• About a 5.7% increase on the average home, or roughly $148 more per year

You’re reading that right.  Even though the total amount levied went up 7% last year, average property taxes went up less than that.  Most of that increase reflects rising costs for wages, health care, infrastructure, and everyday services. This year’s budget was designed to fund only “cost-to-continue” services—meaning the minimum needed to maintain current service levels.

What the Budget Supports

The 2026 budget continues funding for:

• Police, fire, and emergency response
• Roads, sidewalks, and transit services
• Parks, facilities, and city infrastructure
• Library services and community programs
• Housing and human services initiatives

In short, the budget largely maintains the services residents already expect, rather than adding new ones.

Who Decides the City’s “Means”?

For years, the answer was straightforward: the Mayor and City Council.

Elected officials weighed spending decisions against their impact on taxpayers and made judgment calls about what level of service—and taxation—was appropriate. That is a core function of local government.

In that sense, the city has consistently “lived within its means.” The key point is that those means were set locally, based on community priorities and decisions of elected leaders.

Despite the rejection of the referendum, voters gave no indication they were unhappy with their current representation.  Maureen Crombie ran unopposed in District 3, two incumbents retained their seats, and the only new face on the Council is Cheryl Batterman, who was supported by her predecessor Cassi Benedict in District 4.

Despite satisfaction with local Alders, control over budget priorities has increasingly shifted to the state level, emphasizing the importance of the referendum.

State Limits Are Reshaping Local Control

Today, the amount the city can raise in property taxes is largely determined by a formula in state law. That formula is tied to factors like new construction—not to the actual cost of providing services.

This shift moves decision-making away from local officials and toward a fixed amount. Instead of asking, “What level of service should we provide?” the question increasingly becomes, “What level of service can we afford under the limit?”

The budget will still be balanced. But how that balance is achieved is changing.

Why the Referendum Matters

Earlier this month, voters rejected a proposed $3.95 million increase to the city’s levy limit, which would have provided additional funding for

• Two full-time firefighters and increased pay for part-time staff
• One additional police officer
• Enhancements to the library, including a makerspace

City officials, including Mayor Steve Stocker, described the referendum as a way to keep up with rapid population growth and maintain service levels.

Following the vote, the mayor said the city will now need to revisit its budget and make “difficult decisions” about potential cuts to services, programs, and staffing in future years.

A Temporary Break in 2027

There is, however, an important wrinkle.

The referendum ballot question included a key detail: even without voter approval, the city’s allowable levy for 2027 is expected to rise by 5.462%, from about $37.1 million to $39.8 million. That is significantly higher than the 3.0% increase allowed in 2026.

This larger increase is unusual. It is likely tied to the closing of two tax increment districts (TIDs), which under state law can temporarily boost a city’s levy limit.

TID 8 was created in 2001 and includes parts of downtown and Cannery Square.

TID 9 encompasses parts of the Prairie Lakes area, including Bass Pro Shops, Hilton Garden Inn, and Marcus Cinema (but not Costco).  The former St Mary’s ER and current SSM Orthopedic Center across Highway 151 was also developed in this TID.

These districts have already completed their development phases and incentive payouts, but the city took advantage of a provision to hold them open for one additional year to support affordable housing efforts.

Combined, these TIDs have generated over $320 million in incremental property value.

When they close, the full value of the development within those districts is returned to the city’s general tax base.  That increases the total amount of property value subject to taxation and reduces the burden on single family homeowners.

Under State Law, municipalities are allowed a one-time increase in their levy limits in the year after a TID closes. While the exact dollar impact can vary based on final valuations, city budget documents indicate that the closure of these TIDs will allow for significant additional levy capacity.

That one-time increase may be enough to fully fund the city’s “cost to continue” budget in 2027—meaning the city could maintain current services without major cuts, at least for one year.

Cuts Have Already Been Made

Keep in mind as well that significant steps have already been taken to reduce spending in 2026, and lower the amount asked for in the referendum.  City employees have absorbed a larger portion of health insurance premiums, and a reorganization of city staff has reduced several higher-salary director-level positions.  All of the following employees have resigned in the past six months, with their responsibilities falling to remaining staff in their departments. 

• Kristin Grissom, Parks, Rec & Forestry Director
• Rachel Packard, Media Center Director
• Katie Scanlan, Historical Museum Director
• Sunshine Anderson, Museum Programing & Design Coordinator
• Adam Schleicher, Director of Public Services  
• Dr. Rose Daily, Sustainability & Resilience Manager

This is in addition to the changes that were made in 2023-2024 to merge the city’s Fire and EMS departments, eliminating the EMS Director and EMS Operations Manager positions. 

Why 2028 Is the Real Turning Point

The challenge is what comes next.

That temporary levy increase will not carry forward into 2028. Once it disappears, the city is expected to return to smaller allowable increases—closer to the 3% range—while costs for wages, services, and infrastructure continue to rise.

That is when the pressure builds.

Absent new revenue, the city will likely face choices such as:

• Reducing or eliminating certain services
• Delaying maintenance or capital projects
• Limiting staffing levels

In short, 2027 may feel manageable. 2028 is when the real trade-offs begin.

A Shift in the Conversation

Much of the public discussion has focused on whether the city is “balancing its budget” or “living within its means.”

In reality, it is doing both—and has been for years.

The more relevant question now is different:
Who decides what those “means” are—and how flexible they should be?

That question is no longer answered solely at the local level. And as that shift continues, residents may begin to see more visible impacts in the services they receive.

The budget will still balance.  But what it takes to get there will increasingly become more noticeable to residents.

Meta Description: A detailed look at how the Sun Prairie budget works, why property taxes are increasing, and what the failed referendum means for future city services.