Paying Its Way

Village of Caledonia’s Fiscal Condition

April 2020


With its location in the growing Chicago-Milwaukee I-94 corridor just a few miles north of the Foxconn development and within an easy commute of sprouting industrial parks in Oak Creek and Kenosha, the Village of Caledonia appeared to be poised for considerable new economic development and fiscal prosperity prior to the COVID-19 crisis. While not without its fiscal challenges, the village had recently seen property values and income levels rise and had invested heavily in new tax incremental districts, added police and firefighters, and constructed a new village hall.

This report provides an independent analysis of the Village of Caledonia’s fiscal condition. It is one of a series of reports produced as part of the “Resilient Communities Initiative,” spearheaded by the Johnson Foundation at Wingspread to foster collaboration among governments and individuals in Greater Racine to address economic and social challenges confronting the region.

The report was completed just prior to the onset of the crisis. While financial and economic circumstances have changed dramatically, it still should give policymakers and citizens insight into the village’s finances as it prepares to navigate future challenges.

Key findings include:

  • Heading into the COVID-19 crisis, Caledonia’s fiscal outlook was stable and its near-term challenges were quite manageable. Nevertheless, village leaders needed to be wary of turbulence as they sought to capitalize on their economic development opportunities within the confines of state-imposed revenue constraints.
  • While Caledonia’s financial challenges were not severe, they still justified prudent planning and long-term decision-making. This is particularly important because many of the factors influencing the village’s financial fortunes are largely beyond its control.
  • Healthy revenue growth will continue to be dependent on growth in property tax collections, which in turn will depend on new development. On the expenditure side, debt service payments and retiree health care costs will continue to pose challenges. These factors suggest the need for continued willingness to explore service sharing opportunities and other potential cost-saving collaboration with neighboring municipalities.