For the second year in a row, the leaders and citizens of Milwaukee County are facing a difficult budget. A projected $50.8 million gap for 2027 and the revelation of a major cost re-estimate for its largest capital project in recent memory raise substantial concerns for both home and business owners as well as the vulnerable county residents who rely on key public services such as transit.
Over the past generation and under leaders from across the ideological spectrum, Milwaukee County has taken a number of steps to put its finances in better order. Those changes have included cutting thousands of positions, reducing employee benefits such as retiree health care, cutting transit service, approving a vehicle registration fee, increasing employee health and pension contributions, shifting to more modest earnings assumptions within its legacy pension system, issuing bonds to help cover unfunded pension liabilities, increasing earned revenue in the parks system, and shrinking the number and size of county buildings and offices. More recently, the county has begun phasing out its legacy pension plan in favor of the better-designed Wisconsin Retirement System and imposed an additional 0.4% sales tax on top of the county’s previous 0.5% sales tax – two steps made possible by the legislation known as 2023 Wisconsin Act 12.
Some short-term moves to balance the budget over the years have hurt the county’s long-term prospects, including the practice of deferring maintenance and upkeep of county assets. That in turn has added to a long list of capital projects for roads, parks, and other county assets. But most of these steps have put the county on a better long-term financial trajectory, helping to address its unfunded pension liabilities and to build up sizeable reserves in a key fund used to make debt payments.
Despite all of these actions, however, the growth in county expenses has continued to outpace revenues year after year. Most notably, the compensation for county employees has risen along with consumer prices in recent years even as growth in the county property tax levy used for operations has been limited to well below the recent rate of inflation by a state-imposed cap. State aid for key county functions has also lagged despite a one-time bump in 2024 from Act 12. As a result, the county once again faces a budget gap and the prospect of renewed cuts.
Milwaukee County Executive David Crowley’s 2027 budget would address a large part of the budget gap in a sustainable way by tapping better than projected revenue growth, directing agencies to limit their spending increases, and imposing some additional efficiencies such as passing more health care costs on to county employees. However, his budget would also defer a large portion of the problem into the next budget by withdrawing a sizeable amount of county reserves. That would postpone painful cuts in transit service until late 2027 or 2028 but would also make that future budget more difficult to balance than it otherwise would be. The move would allow county officials more time to seek additional assistance from state elected officials, but it’s unclear whether that aid will materialize.
As the Forum does every year, we have prepared this review of the county’s finances with the aim of highlighting both the progress that has been made and the challenges that remain to be surmounted. We neither advocate for nor against the county’s executive proposal, but instead hope our analysis will serve policymakers and the general public as they consider the best way to manage the complex finances of Wisconsin’s largest county. Continue reading…