Public Policy Forum Blog

County's finances on the upswing, but big hurdles remain

The Public Policy Forum released its annual review of the Milwaukee County Executive's recommended budget today, and the tone is decidedly more upbeat than in previous years. Because of a smaller (but still substantial) budget gap heading into the year, and thanks to an unexpected $13 million 2011 surplus, this year's county budget is the least difficult in years.  As we point out in our report, multi-year efforts to manage the county's health care benefits and limit long-term borrowing are paying off, though pressing long-term problems remain.

A focus of this year's budget brief is whether the county executive and his budget team seized the opportunity provided by the convergence of these positive circumstances to make continued progress on long-term structural problems, or simply viewed the 2013 budget as a one-year blueprint. We find that, on the whole, the budget responsibly addresses both short-term and long-term issues, though it also leaves the county short on reserves and long on infrastructure repair needs.

Commendable efforts to address immediate fiscal needs include a clean-up of outdated revenue projections in the Behavioral Health Division and Parks budgets; the use of some of the 2011 surplus to cash finance infrastructure repairs; and investments in long-neglected areas of administrative infrastructure, including human resources and information technology.  We also cite the budget's clear priorities when it comes to budget-cutting - which contrasts positively from the across-the-board approach used in many previous years - and the absence of rosy revenue projections and short-term fixes.

The report also cites concerns, however, about the methodologies used to justify big changes to the sheriff's budget, and raises questions about the long-term feasibility of continued cuts in health care benefits and a decision to spend the balance in the county's Debt Service Reserve.

We conclude that, overall, the recommended budget "should be seen as one that proposes several foundational steps that allow the county to continue its path toward financial stability.  Nevertheless, the county's stagnant revenue streams, continued fringe benefits burden, immense infrastructure needs and lack of reserves - combined with the still tenuous legal standing of its recent pension and health care changes - suggest that years of heavy lifting yet will be required before its journey is complete."

The 2013 Milwaukee County Executive Budget Brief can be accessed here.  Our review of the mayor's proposed 2013 budget for the City of Milwaukee will be released early next week.

Rob Henken