Public Policy Forum Blog

Recent Forum Research Offers Context for City Budget Deliberations

Mayor Tom Barrett's recent call for a 0.5% City of Milwaukee sales tax to support public safety and crime prevention comes as no surprise to the Public Policy Forum. In fact, our most recent analyses of the City budget saw this coming.

Last September, in Making Ends Meet, we examined the City's overall fiscal condition and challenges. One of our major findings was that annual spending increases required to maintain existing service levels for the Milwaukee Police Department (MPD) were consuming virtually all of the City's annual revenue growth, thus leaving no room for inflationary growth for other departments. The report warned that "if maintaining MPD staffing levels continues to be a top priority…then it is likely that non-Police services will begin to suffer. Moreover, if City leaders wish to explore increases in sworn strength…then reductions in other City services would appear to be inevitable barring some new revenue source."

Similarly, in our review of the Mayor's proposed 2017 budget last October, we noted that while 2017 was not an exceedingly difficult budget year, the outlook for 2018 was ominous. Because of a likely substantial rise in pension costs, the resumption of annual health care increases, and a need to reduce withdrawals from reserves, we concluded that "the City's ability to address the needs of MPD and its aging infrastructure without negatively impacting service levels in other departments is growing short."  

The Mayor's proposed City sales tax is designed to spare both MPD and other departments from substantial cuts, while even adding some police staffing capacity. In light of this proposal, a more recent Forum report on the City's revenue structure (On the Money – released last month) also becomes highly relevant. That report cited flaws in the City’s existing structure, including a lack of diversity and balance. We also pointed to the inequitable nature of the City's state-imposed revenue paradigm, which forces it to lean exclusively on property owners and state aids while providing no authority to generate contributions from visitors and commuters.

With a difficult couple of months of budget deliberations looming, we would urge those seeking an explanation for the City's daunting challenges to read these reports, or at least view the accompanying video summaries. They certainly don't offer easy answers, nor do they support or oppose the Mayor's proposal. They do help explain, however, why City leaders have reached a foreboding budget precipice.   

Rob Henken