Is it time to dissolve Milwaukee County government?

With Milwaukee County Board Chairman Lee Holloway's proposal to abolish the position of county executive, and County Executive Scott Walker's counter-proposal to eliminate all of county government, policymakers and opinion leaders in Greater Milwaukee once again appear primed to discuss big changes in the structure of local government.

But will this iteration really lead to comprehensive structural change, or will it result only in minor reforms, as did the discussion following the 1996 report from Milwaukee County's 21st Century Commission, and the 2002/2003 discussion related to the county's pension scandal?

Research recently commenced by the Public Policy Forum may play a significant role in answering that question. The purpose of this research - which has been commissioned by the Greater Milwaukee Committee - is to explore the fiscal, legal and logistical issues involved with transferring the various services currently provided by county government to other entities, and the options that might exist for doing so.

Does that mean the Forum has taken a position in support of the elimination of county government and is preparing the plan for this endeavor? Absolutely not. We do believe, however, that this suggestion has received enough public attention and civic support, and that the fiscal issues facing county government are sufficiently severe, to at least merit rigorous and objective research as to whether downsizing or eliminating Milwaukee County government might be accomplished and, if so, what options exist.

The fact that rigorous research is needed should not be overlooked. While significant governance change often is seen as a panacea for difficult problems facing local governments or school districts, the experience of those who have attempted such change indicates that fiscal savings can be limited, and that the benefits associated with structural reform can take years to manifest.

In the case of Milwaukee County, the seemingly simple notion of "blowing it up" is fraught with complexity that is caused by some of the very factors that have created the county's current fiscal crisis. The county has more than $2 billion of pension and retiree "legacy" liabilities, as well as close to $500 million of outstanding general obligation debt, that don't simply disappear if the county ceases to provide certain functions. Either those costs must be distributed to the entities that take over county services - a proposition the receiving entity is unlikely to embrace - or they must remain with a shrunken county government that is even less equipped to pay for them with a reduced workforce and receding revenue streams.

The analysis we're undertaking will deconstruct the county budget, showing what the county is actually spending to deliver key services, as opposed to what is budgeted for those services because of the way the county distributes legacy costs across all departments (see our March 2009 report for more detailed description of this issue).

By isolating county retirement costs and their true impact on county services, we hope to engender an informed policy discussion about how those costs should be managed and whether alternatives might exist to prevent them from continuing to diminish the level and quality of every county service. We will then analyze and assess the fiscal and non-fiscal impacts and considerations associated with moving certain functions out of county government, and the pros and cons of various alternative government structures.

As long as the notion of dissolving county government or radically altering its structure is seen as a possibility, it will serve as a convenient excuse by some to delay meaningful action on the dozens of excruciating financial and policy decisions that face the county right now, and that have been pushed off for years. It is time to take the next step in determining whether such an approach is possible and desirable. Stay tuned for our report, which we hope to release by the end of this year.