3rd Quarter 2023 President’s Message

I wrote my first report on a local government budget for the Forum in October 2008. At the time, there was a great deal of acrimony between then-Milwaukee County Executive Scott Walker and the Board of Supervisors, which plunged discussion of even the most mundane fiscal issues into politics and hyperbole.

We hoped our inaugural Milwaukee County “budget brief” would benefit the public by objectively explaining key fiscal pressure points — as well as the long-term context in which that year’s short-term decisions would be made. We sought to publish the brief at least a couple of weeks before budget adoption, in the hope that it would provide useful perspective to supervisors and citizens as budget deliberations hit their apex.

So began a 15-year-and-running tradition for the Forum, which has grown to include annual briefs on the proposed budgets for the cities of Milwaukee and Madison, the Milwaukee Public Schools, and the Madison Metropolitan School District, as well as a brief and updates on the two-year state budget in odd years. Yet as the 2024 municipal and county budget season now unfolds, I can attest that I have never been so excited to dig into hundreds of pages of budget minutiae.

The discussion this fall, of course, marks the first time that Milwaukee’s city and county budgets can plug in tens of millions of dollars from new sales taxes adopted as a result of a grand legislative compromise at the State Capitol earlier this year. Another point of distinction is an influx of $274.9 million in additional shared revenue for 2024 included in the new state budget, which will be distributed across every county, city, village, and town throughout Wisconsin.

We have taken great pains to point out that these new developments do not solve all of the deep fiscal challenges facing Milwaukee’s city and county governments (nor Madison’s for that matter) – and the three budget briefs we release next month will continue to reinforce that notion. But for the two Milwaukee governments, they will produce a stunning reversal in the way we analyze budgets for at least one year by replacing our focus on the cuts that have been proposed with an emphasis on evaluating the prudence of new investments.

Indeed, among the prominent themes our readers can expect in this year’s city of Milwaukee and Milwaukee County budget briefs are the following:

• Both governments received a huge fiscal break by garnering new sales taxes starting Jan. 1, 2024 – one year before their dreaded fiscal cliffs were expected to hit. We’ll focus on whether and how they are able to take advantage of this unexpected benefit by “banking” some of the proceeds for 2025 and beyond – when much of their federal pandemic relief aid will be exhausted – as opposed to using it to fill holes or, even worse, initiate new programs in 2024 that they would struggle to afford in future years. One new cost on the horizon for both local governments may be a contribution toward renovations at American Family Field to help keep the Brewers in the city.
• Both governments have prudently built up reserves over the past few years to help them respond to their once-expected fiscal cliff – including an $80 million pension reserve at the city and a $100 million-plus debt service reserve at the county. We’ll be looking at how those reserves are being employed or perhaps even strengthened in 2024, a year in which there does not appear to be a great need to use them.
• The interplay between operating and capital budget priorities will be a key point for the two governments, which both face huge infrastructure repair backlogs (particularly at the county) as well as daunting operating budget challenges in key areas like police and transit. How their new revenue streams will be divvied up between those competing needs will be another key point of analysis.
• The need to find efficiencies and explore collaboration may have been temporarily alleviated but remains critical for both governments’ long-term fiscal health. Will this year’s budgets show the same urgency to move forward on such efforts? And will recommendations contained in soon-to-be-released reports by the Greater Milwaukee Committee on city efficiency initiatives and the Forum on city-county back office service sharing opportunities be initiated?

Stay tuned for answers to these and other questions within the next three weeks, and please feel free to share any thoughts of your own as the Forum gears up for a provocative new budget season!