Milwaukee County Budget Caught Some Breaks, But The City Budget Faces Challenges

Oct 21, 2019

It’s that time of year again when lawmakers are deliberating budget proposals from the city of Milwaukee and Milwaukee County. This year the county caught some fortuitous breaks whereas the city is struggling to cover soaring pension costs. But both are calling for raising the sales tax as a tenable way forward. 

Rob Henken, president of the Wisconsin Policy Forum, says there was a lot of concern over the summer from the county executive potentially cutting things like bus routes and potentially having to look at delaying or deferring permanently some capital projects in parks. But it turns out, the 2020 recommended budget is relatively calm.

"There were a variety of different good news items that sort of coalesced toward the end of the budget process," says Henken. 

There were two key items that aided the county executive to balance the budget. The first was the discovery that the county's capacity under state law to levy property taxes actually grew by $2.9 million unexpectedly. Initially, the county thought it had the ability to maybe raise property taxes by about $3.9 or $4 million. It turns out that in the recommended budget, there's an increase of $7.4 million that's due to this newly found $2.9 million of extra capacity. It's essentially unused capacity from previous years. 

Henken says that despite the discovery, the proposal is still just that — a proposal.

"Now, obviously county leaders need to decide whether they want to take advantage of the availability of this extra cap space. The county executive has done so in his recommended budget, but that provision actually requires a two-thirds vote of the county board," Henken says.

READ: Milwaukee County Budget Faces More Cuts

The second important factor is health care. Milwaukee County originally projected it would have to increase spending on health care by about $5.5 million. It turns out it can reduce health care spending by about $2.2 million.

Henken says that these lucky breaks run the risk of downplaying the gravity of the county's challenging fiscal situation. 

The city of Milwaukee is also facing a difficult budget for 2020. One of the main contributors is the rising cost of pensions.

"It's really difficult for me to overstate the significance of this and the challenge that is going to pose to city government in the years to come," says Henken. 

READ:  Mayor Tom Barrett Says 'Pension Structure Is Not Fiscally Sustainable'

In the 2020 proposed budget, the mayor is suggesting a 3.5% property tax levy increase. That would generate about $9.8 million, with $8 million immediately going toward the pension reserve fund, which Henken says sets up a very difficult set of circumstances for the rest of the city budget.

Currently, there's a proposal from the mayor for a reduction of 85 positions across the Milwaukee Police Department. Sixty of those positions are sworn police officers. Henken says that's something quite unique.

"We have seen public safety and the police department, in particular, shielded from sizable budget cuts during the past decade by the mayor and the council, and this year will be different," Henken says.

The Policy Forums briefing for the Milwaukee County's 2020 budget proposal can be viewed here, and the briefing for the city of Milwaukee's 2020 budget proposal can be viewed here