Wednesday, December 19, 2007

Election Issues '08: Revenue challenges for city and county

On April Fools' Day 2008, Milwaukee citizens will elect people to four-year terms in city and county public offices. Candidates for those offices have an obligation not to fool voters with shallow promises but rather to provide answers to critical questions facing local government. Among those questions, none is more important - and more rarely addressed - than this one: How do you plan to ensure the long-term financial stability of the government with which you will be entrusted?

The Forum releases today the first of a series of reports highlighting government finance issues vital for local voters to understand. A challenging revenue picture for Milwaukee local government lays out the recent trends in municipal and county general purpose revenue and concludes stable long-term financing is in jeopardy for both the City of Milwaukee and Milwaukee County governments.

The key findings:
- Intergovernmental support – mostly in the form of state shared revenue – for both the city and the county has declined sharply in real terms over the past 10 years.
- Both the city and the county have relied most heavily on service fees to fill the gap, although in the county’s case that is primarily due to an accounting change.
- Property tax revenue to support both governments has outpaced inflation even though the taxpayers’ resources to pay have not.
- Spending for city government has kept pace with inflation whereas county spending has exceeded it.

The city and county governments of Milwaukee are the two largest governments in Wisconsin other than the state itself. Their financial viability affects the surrounding region and the state as a whole. Candidates for mayor, county executive and the legislative bodies of county and city governments need to address this fundamental issue. Where are they going to get the revenue to run local government?

Note: Future reports in this series, covering capital expenditures and employees benefits, will be released over the next two months.

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