Following the lead of state government, at least two Dane County municipalities are looking to furlough employees to make up for projected budget shortfalls — an option that has been discussed in communities throughout the county.

In Fitchburg, where about 140 employees learned of the city’s proposed five-day furlough Tuesday, officials attribute the deficit to fewer building permits being issued and a loss of investment income — two major sources of money outside of property taxes.

"Basically, I had to tell them that the only way that we feel we can end the year without going in the red is to introduce a furlough program," said city administrator Tony Roach.

Village of Oregon employees can voluntarily take unpaid additional vacation, while informal furlough talks have occurred in McFarland and Waunakee.

But Dan Thompson, executive director for the League of Wisconsin Municipalities, said the real challenge for cities and villages will be the number of layoffs or eliminated positions in next year’s budget.

Unlike the state government, where salaries and benefits make up about 20 percent of the budget, those costs make up about 60 percent to 65 percent of municipal budgets, he said.

The only significant way to cut back on spending is to reduce the work force, Thompson said.

Some municipalities will have furloughs now, but the "real crunch" will come as cities and villages start the budget process in October and November and begin to determine if any layoffs are necessary, he said.

Details of Fitchburg’s proposed unpaid leave still need to be negotiated by employee unions before the program is approved. Savings through furloughs should cover about half of the city’s projected deficit for 2009, which totals about $300,000, Roach said.

Officials say it will be a challenge for departments such as police and fire to accommodate the additional days off without incurring overtime or seriously affecting service.

"No matter how you cut it, all of the communities in Dane County run relatively slim," said Randall Pickering, Fitchburg’s fire chief. "We don’t have a lot of extra staff."

In Oregon, the village’s 65 to 75 full- and part-time employees have been given the option to take a voluntary furlough.

Administrative staff has suggested five furlough days. However, the number will be set by the employee’s department head, who will approve the time off per the program adopted by the board, said Mike Gracz, village administrator.

"We’re asking employees to respond by the end of next week," Gracz said. Administrative staff will update the Village Board on July 20 on the leave program and other costs savings.

Oregon, which also blames a lower-than-expected number of building permits and losses in investment income for its deficit, is expecting a shortfall in its 2009 general fund between $60,000 and $70,000, Gracz said.

In McFarland, which is facing a $90,000 budget hole for 2009, administrators and department heads have discussed the possibility of furloughs but no action has been taken by the Village Board, said Village Clerk Deb Neal.

In Waunakee, furloughs are "a tool that we’ve talked about at a staff level," but no decisions have been made, said Bill Barlow, village administrator.

Madison officials have cut travel budgets and reviewed capital borrowing costs for this year’s budget, but "what’s more troubling is the outlook for 2010," said Rachel Strauch-Nelson, spokeswoman for Mayor Dave Cieslewicz.

However, it’s too soon to say if furloughs will be required, either this year or next, she said.

"It’s something we really don’t want to do and something that would be hard to administer at the city level," because of the direct services the city provides, Strauch-Nelson said.