Public Policy Forum Blog

The main focus of the Public Policy Forum’s annual review of the Mayor’s proposed City of Milwaukee budget – released this morning – is the immense challenge posed by a $59 million pension fund payment in 2013, which marks the beginning of an unprecedented series of pension payments that will impact city budgets for the foreseeable future.  We find that thanks to the foresight exhibited in previous budgets, the impacts in 2013 are manageable.  In fact, the Mayor has proposed a budget that deftly accommodates the remarkable increase in pension payments without fully depleting pension reserves or slashing critical services.

The impact of these new pension payments should not be taken lightly, however.  Pension costs will consume 32% of the city’s property tax levy in 2013, as compared with 15% in 2009. In the next few years, that percentage is likely to continue to grow, as the city’s pension reserves are tapped out and expenditures are cut elsewhere. 

The 2013 proposed budget also accommodates heightened pension costs with elevated municipal service charges.  The fee increases proposed for 2013 raise the dependency of general fund spending on this revenue source to 19.5%, as compared to 15.9% in 2009.  In fact, in 2013, charges for services become a larger source of support for general departmental spending than the property tax levy, a development that is likely to remain in place for the foreseeable future. 

Our analysis of the 2013 City of Milwaukee proposed budget can be accessed here, and our media release here.