For those who hoped the changes to collective bargaining or the arrival of a new county executive might finally solve Milwaukee County's longstanding fiscal problems, we are sorry to disappoint. The Public Policy Forum's 2012 Milwaukee County Budget Preview report - released this morning - shows the county's budget prognosis actually has worsened since last year, leaving it with "few remaining strategies outside of deep service cuts and/or sharp revenue increases."
This is our first report analyzing Milwaukee County's finances since the adoption of the state budget repair bill and 2011-13 state budget. Our analysis confirms that the county realizes substantial savings from the budget repair bill's labor provisions, likely exceeding $24 million in 2012. Unfortunately, about $17 million of those savings already were built into the county’s base budget in 2010 and 2011. Thus, while the net savings of $7 million for 2012 are significant, they do not come close to offsetting the nearly $29 million in state aid reductions contained in the latest state budget.
Additional key findings and observations from the report:
- Our modeling of several approaches for bridging an estimated $38 million 2012 gap shows potentially stark impacts for county employees, services, programs, and/or taxpayers. Those include deep cuts in mass transit and community-based mental health and disabilities services; severe reductions in parks and cultural amenities and exhibits; and additional reductions in health care benefits that could greatly exceed those imposed on other public sector workers in Wisconsin.
- Because the county may have a one-time opportunity to boost its property tax levy by nearly $10 million in 2012, there is a limited timeframe to include significantly enhanced local revenues as part of the county's deficit-reduction strategy. The only other local broad-based tax or fee available to the county is the vehicle registration fee, which could be used to generate additional revenue for transit or other transportation needs, but which has generated considerable political opposition.
- A five-year fiscal outlook prepared by the county before adoption of the 2011-13 state budget showed a noticeable improvement over the five-year forecast from a year ago. Once the impacts of state aid reductions from the state budget were plugged into the model, however, the county’s five-year outlook became even worse than that forecasted in 2010, despite the budget repair bill’s provisions giving the county unilateral control over many labor and benefit costs.
The full report can be accessed here, and our media release here.