Public Policy Forum Blog

VRF Dominates Milwaukee County Budget Debate for Second Straight Year

At this time last year, in the Forum’s review of the Milwaukee County Executive’s 2017 recommended budget, we marveled at how unique it was to see a single issue dominate the budget and its deliberations. This year, in our analysis of the 2018 recommended budget, we sheepishly admit we were wrong, as the same issue once again transcends all others.

That issue, of course, is the vehicle registration fee (VRF). Despite the County Board’s decision to knock down the County Executive’s proposed $60 fee to $30 during last year’s budget debate – and despite an advisory referendum in April in which 72% of voters opposed the fee – the recommended budget again contains a $60 fee as the centerpiece of its strategy to reduce a $31 million budget hole.

This reflects the County Executive’s determination that significant service and staff reductions and new outsourcing initiatives no longer are palatable after years of reliance on such strategies. In other words, he views revenue enhancements as the ‘least bad’ of the County’s difficult deficit reduction options.

The proposed VRF increase would generate an additional $14.6 million in 2018, which would be used both to preserve transit service and to free up property tax resources to spread among other County functions. To further shore up departmental budgets and offset a $20 million increase in health care and pension costs, the budget also recommends $4.4 million in other new or enhanced fees for items such as parking at County parks, transit fares, Zoo admissions charges, and inmate phone calls.

We note in our budget brief that it’s reasonable for County supervisors to find fault with the increased fees, and we ourselves question whether the recommended budget leans too heavily on revenue enhancements to address this year’s structural budget gap. Yet, we also attest that the need for $19 million in new revenue is real, and that responsible alternatives are scarce. Indeed, the VRF is the only comprehensive option on the revenue side, and options on the expenditure side inevitably would need to include service reductions in discretionary areas like parks, culture, and transit.

This year’s budget brief does not limit its analysis to fees. For example, we review the 2018 capital budget, where despite major investments in a new international airport terminal and much-needed bus replacements, only a fraction of the County’s overwhelming infrastructure needs are addressed. And, on the operating side, we find that while new investments are proposed for programs serving delinquent youth, the homeless, and persons suffering from substance abuse and mental illness, a perennial hole in the Sheriff’s budget is not fully addressed.       

Yet, the primary 2018 budget issue is fees, and our main concern is that the issue be resolved responsibly and with the County’s severe long-term structural problems in mind. Real expenditure and service reductions are appropriate (though painful) alternatives; delaying needed capital projects, depleting reserves, or ignoring legally-bound obligations to retirees are not. Indeed, kicking the can down the road would be the worst possible outcome and only would erode the County’s recent financial achievements.   

Author: 
Rob Henken