Public Policy Forum Blog

City Considers New Revenue Idea

Rising health care costs, unfunded pension liabilities, deferred maintenance, and flat revenues are among the common budget challenges facing local governments these days. To combat these financial pressures, localities across the country are looking for new and creative ways to make ends meet. Some governments have placed an emphasis on restructuring programs and services to gain operational efficiencies, while others have sought to increase fees to recover the full cost of providing services.  

While these strategies may be effective in the short term, their long-term utility can be limited once all fees are raised to cover service costs and every ounce of efficiency is squeezed out of programs.  As a result, it is becoming more important than ever for local governments to explore every new revenue opportunity to help support ongoing services. 

One increasingly popular new idea being kicked around across the country is the creative use of public assets to generate income to support government programs. Recently the City of Milwaukee hired Milwaukee Civic Partnership to conduct an audit and evaluate several ways city assets might be used as a revenue source, including:

  • Naming rights of buildings and structures
  • Official cell phone carrier for City government employees
  • Exclusive pouring rights to beverage companies at public events and facilities
  • Underwriting of programming on cable stations
  • Advertising on websites, fleet vehicles, parking meters, bills, mailings, and newsletters
  • Soliciting donations for capital improvement projects
  • Sponsoring of health, wellness, educational, and transportation programs
  • 3rd Party Lease Buyouts

A draft of this analysis can be found here.  

One point that stands out in the report is the diversity of assets being explored.    Assets are typically thought of as tangible things like buildings and structures. However, this report goes beyond simply contemplating advertising on city hall and includes opportunities for private sponsorships of several existing city programs including the Bublr bike share program, the Strong Neighborhoods program, and the city’s wellness program, as well as other potential initiatives such as the streetcar program. The analysis also includes the possibility of private sponsorship of existing streets to help preserve cleanliness as well as street beautification initiatives including the East Layton Avenue Development. Another interesting option considered was the selling of sponsorship ads on parking meters and tickets to pay for a program to help support the homeless. Meter patrons would have the option of making donations at these stations. 

There appears to be a clear win-win outcome in soliciting private sponsorships to help offset the costs of programs designed to help improve quality of life. This may arguably be preferable to cluttering city streets, bridges, parking structures, and parking meters with various advertisements. In any case, given the very limited revenue options at the City’s disposal, its efforts to identify new ways to benefit from city assets appear promising. 

Author: 
Mike Gavin