In recent years budget shortfalls have become common in the City of Milwaukee; as a result essential services have often faced cuts in the budget. This year is trending in a different direction for these essential services thanks to help from the American Rescue Plan Act. However, Rob Henken, President of the Wisconsin Policy Forum, explains that structural issues still remain within the budget.
“The city for years has struggled from an imbalance because essentially, its major revenue streams are not growing at a pace that can allow it to meet its primary, pressing expenditure needs,” says Henken.
Both the city and Milwaukee County recently released their budget proposals for 2022 and as always, the Wisconsin Policy Forum has been analyzing what they could mean for the future of our area.
“For both budgets (city & county) the biggest takeaway is how the huge infusions of federal American Rescue Plan Act [dollars] are being utilized,” says Henken. “So as a result, in the 2022 proposed budget by the mayor, there will be about $35 million of these one-time federal dollars, that are essentially used to plug holes and ensure that there are no drastic service reductions, and keep a lid on the property tax increase.”
Henken explains that while the millions of dollars from the American Rescue Plan Act will solve some of Milwaukee’s budget problems in the short term, the amount of money that can be used from the act is finite and doesn’t solve some of Milwaukee’s long-term structural budget issues.
“It will help in 2022 and maybe after, but come 2025 the structural hole in the budget will be even greater,” says Henken.
In addition to being used for maintenance, dollars from the American Rescue Plan Act are also going towards support jobs at the Milwaukee police and fire departments.
“There are roughly 95 police department positions and 95 fire department positions that are essentially being supported exclusively with these one-time federal dollars,” says Henken.
While using these federal dollars now can be seen as cause for concern Henken did say that not everything from the new proposed budget is negative.
“By contrast, the county was able to make ends meet for 2022 with the county executive's recommended budget, without having to use their American Rescue Plan Act dollars,” says Henken. “Their allocation (the county’s) is smaller cities, though it’s still very large being $183 million compared to the city's $394 million. But County Executive Crowley has only recommended the use of $4 million to help with the operating budget in 2022 and there are no service cuts in that budget.”
