Budget Brief

Milwaukee County 2022 Executive Budget

October 2021


What a difference a year makes. Last year at this time, after noting the startling nature of a recommended county budget that avoided program and staffing cuts in the midst of a global pandemic, we also warned that “any celebration about the relatively tranquil nature of the 2021 budget should be somewhat muted.”

The rationale for our warning was our concern that several of the positive factors that relieved county leaders from difficult budget choices in 2021 were unlikely to be available in subsequent years. More specifically, we did not foresee that tens of millions of federal pandemic relief dollars would again come the county’s way, and we were skeptical that the county’s ability to keep a lid on health care and pension costs and withdraw healthy amounts from reserves would last much longer.

It turns out those doubts were misplaced – at least for the time being. For the second consecutive year, the 2022 recommended budget avoids significant service cuts, fee increases, and reductions to the county workforce. Instead, in even more startling fashion than the 2021 version, it finds room for new investments tied to racial equity, recommends the largest salary increase for county workers in recent memory, and even doubles the county’s contribution to municipal governments for emergency medical services.

Even more remarkable is that these feats are accomplished with only minimal use of the county’s $183.7 million allocation from the federal American Rescue Plan Act (ARPA) passed earlier this year. Instead, the budget benefits from a healthy rebound in sales tax collections, a decrease in projected health care and pension payments, and the ability to withdraw $7.2 million from the Debt Service Reserve (DSR) because of prudent use of last year’s pandemic relief allocation. An additional huge infusion of federal relief dollars for transit also provides critical help by allowing the budget to avoid cuts in bus routes without allocating more property tax levy or general ARPA monies.

The ability to save ARPA dollars for more lasting uses and to preserve at least a portion of the federal transit funds for the next one or two budgets should also alleviate the need for difficult decisions in the 2023 and 2024 budgets. Those dollars may also allow county policymakers to make a dent in the county’s overwhelming capital budget backlog and hold down debt levels.

While this outlook is undeniably far rosier than any the county has seen in decades, the caveat is that it, too, is likely to be short-lived. The federal infusions – while robust enough to bring benefits for multiple years – will be mostly exhausted by 2025. After that time, a stubborn annual structural deficit in the $20 million range almost certainly will resurface, and the county’s infrastructure backlog still will be immense. With few new revenue options at the county’s disposal and a series of fierce expenditure pressures, its annual budget challenges may return with a vengeance.

In the pages that follow, we size up the recommended budget both with an eye toward the good fortune that has befallen the county in the near term and the budget threats that remain for the future. Our aim is to provide impartial analysis and context for policymakers and the public as the 2022 county budget process moves forward in the weeks ahead. Continue reading…