Public Policy Forum Blog

2015 County budget characterized by a singular focus on the structural deficit

The Public Policy Forum’s annual Budget Brief of Milwaukee County’s recommended budget  -- which we release this morning  -- cites a return to familiar territory for the County, as its leaders must grapple with  a substantial budget gap and a limited set of options to address it.  This scenario contrasts with the 2014 budget, which was remarkable by Milwaukee County standards given its manageable structural gap and the opportunity it afforded to reinvest in infrastructure and services.

Faced with increased pressure from fringe benefit and salary costs and less capacity to withdraw funds from the Debt Service Reserve, the county executive and his budget team forsake major new spending  initiatives.  Instead, as we point out in the report, the recommended budget reflects almost a “singular focus” on the structural deficit, using additional health care changes, a wage freeze, and a series of restructuring and outsourcing initiatives both to fill the 2015 gap and to effectuate long-term savings.

With a 101-year-old reputation as a fiscal watchdog, it’s difficult for the Forum to be critical of such an approach.  Indeed, we note that the budget’s effort to hold the line on departmental spending and creatively seek structural savings is fiscally responsible and reflective of the County’s ongoing fiscal challenges.

A key question, however, is whether the same strategies that require departments to get by with fewer resources by finding new efficiencies with fewer resources and that defer action on key infrastructure needs can be used year after year; or whether, instead, whole sets of services will need to be eliminated or new revenue options found. 

Our report contains analysis of the key budget strategies that eliminate next year’s $32 million budget gap, including the aforementioned employee health care changes and wage freeze, use of reserves, and restructuring initiatives.  The report also discusses important budget issues related to the Office of the Sheriff, mental health services, and parks and cultural institutions.

Overall, we find that the 2015 recommended budget’s ability to bridge a substantial budget gap without slashing services or raising taxes is a significant feat that should not be understated.  We caution, however, that because certain longstanding problems continue to linger, the degree of difficulty is likely to increase in future budgets. 

Our analysis of next year’s City of Milwaukee budget – released earlier this week – can be downloaded here.

Author: 
Rob Henken