After word surfaced in July that Milwaukee County faced a $19 million mid-year budget deficit for 2024, supervisors did not mince words about the severity of the situation. In fact, one predicted a “brutal” budget for 2025 in a Milwaukee Journal Sentinel article that also cited the likelihood of renewed efforts to ask the state for help.
Taken in that context, the county executive’s 2025 recommended budget can only be deemed a pleasant surprise. The budget is able to mostly avoid cuts in departmental staff and services, while keeping the Debt Service Reserve withdrawal to a reasonable level and adding nearly $11 million to shore up public safety departments. The budget does include an $8.3 million (2.8%) increase in the property tax levy – the highest percentage increase in 15 years – but that must be viewed in the context of a $24 million (7.7%) decrease in the levy in 2024.
A key to the relative mildness of the recommended budget is the continued benefits reaped from 2023 Wisconsin Act 12, the landmark legislation that authorized the county to increase its sales tax from 0.5% to 0.9% this past January (yielding an additional $84 million in the 2024 budget) and produced a $7.6 million increase in its 2024 state shared revenue payment. County leaders prudently used the immediate infusion to shore up budget weaknesses in ways that continue to pay dividends in the 2025 proposal.
Unfortunately, as we will discuss in depth in this report, the county’s growing financial challenges – including its enormous capital improvements backlog that is highlighted by the imminent need to finance a new criminal courthouse – now appear to be eclipsing the Act 12 benefits sooner than expected. Other challenges include an ongoing structural gap in the transit budget that could produce a “fiscal cliff” two years from now, as well as escalating debt service obligations that have materialized even before initiation of the courthouse project. Together, these factors paint a far more alarming picture for the future than the mild nature of the 2025 recommended budget would suggest.
In the pages that follow, we highlight the key decisions made to balance the 2025 recommended budget and examine why the fiscal stability produced by Act 12 is likely to be short-lived. Our goal is to provide county policymakers and the public with impartial analysis and perspective that will be helpful in their consideration of the 2025 budget and in assessing the scope of the county’s future challenges.