Yes, End the Residency Requirement

But in return the legislature must give Milwaukee the powers it needs to create a great city.

By - Mar 13th, 2013 12:09 pm

You can certainly make a case for ending the City of Milwaukee’s residency requirement. The rule is archaic. It seems unfair. And Milwaukee shouldn’t need this requirement to retain its residents.

However, over time the elimination of residency will effectively grab millions of dollars in property values and economic activity from the city and sprinkle it onto the surrounding suburbs. Ending residency might be a good policy, but only if Milwaukee is adequately compensated for its removal. To avoid another case of “sticking it to Milwaukee,” the city needs to take a more aggressive posture to ensure it gets value in return for eliminating residency.

City of Milwaukee

City of Milwaukee

The residency requirement is not a case of Milwaukee unfairly treating its employees or, as recently argued in a Journal-Sentinel editorial, failing to “encourage the professionalism, talent and bravery of first responders.” The requirement is one element of a bargain long agreed to by city taxpayers and city employees. Despite having a remarkable number of qualified applicants whenever police officer or firefighter positions open up, we provide our public safety employees with benefits and job security that are otherwise near extinction in today’s economy. Additionally, Milwaukee police officers and firefighters earn an average of $65,000 per year, nearly three-and-a-half times the per capita income of the Milwaukee residents who pay their salaries. In exchange for our generosity, we ask that our employees live amongst us. Many fight for the opportunity. And once they have it, public safety employees rarely leave. Last year just 2 firefighters and 12 police officers voluntarily separated from city employment. That’s because, for most, we offer the best deal they will have in their working lives.Milwaukee uses the residency requirement as a crutch. It is ongoing stimulus spending to directly keep certain citizens in the city. Critics of the rule make a fair argument,  that rather than bribing people to stay in the city, Milwaukee should improve the city enough to attract new residents. Milwaukee is doing what it can, shaking off the Great Recession with community-driven efforts to stem the foreclosure crisis, creating partnerships that impressively reduce teenage pregnancy, and seeing growth in housing in and around downtown that highlights Milwaukee as a place to live, work, and play.

But Milwaukee must do much more to fulfill its potential. The clearest way to attract more residents to the city is to reduce property taxes, the source of so much perceived oppression. Mostly, that means reducing spending. And to save real money, we have to go after those parts of the budget that are the most costly. In Milwaukee’s case, the city spends more than half of its operating budget on the salaries and benefits of the firefighters and police officers that are behind the effort to eliminate residency. These expenditures add up to $319 million in 2013, much more than Milwaukee’s entire property tax levy of $250 million.(The rest of the city budget comes from state and federal funding.) But these unions are exempted from Act 10, all but eliminating any chance of reducing spending enough to materially lower property taxes. If the state eliminated Milwaukee’s public safety unions’ special treatment under the law as part of a deal for lifting residency, Milwaukee would be in a position to cut property taxes.

The other reason Milwaukee’s property taxes are so high is because, unlike most other major cities, Milwaukee is overly reliant on state shared revenue and barred by the state from having a sales or income tax. If state government allowed Milwaukee to diversity its revenue structure, the city could also decrease property taxes by raising sales or income taxes. Since sales and income taxes are more likely than property taxes to be paid by non-city residents, this would further decrease the overall tax burden of city residents.

So if the state were truly interested in giving Milwaukee the tools it needs to lower property taxes and create the kind of “Great City” Gov. Scott Walker says he wants to see, he and the legislature would extend Act 10 to our public safety unions and grant Milwaukee the same taxing authority most other major cities in America have long possessed.

This would be a good starting point for a deal to eliminate residency. Milwaukee would be able to fairly compensate city taxpayers for the loss we would suffer from a public safety employee exodus, the public employees would be free to live where they please, and a sales or income tax would allow suburban residents to pay something for their share of the economic benefits that come from living near a major city as well as for the likely increase in suburban property values stemming from the influx of city employees.

Of course, the state, suburbs, and public safety employees will only laugh at this proposal. After years of timidity and underwhelming state representation, Milwaukee lacks the bargaining power necessary to deal fairly with these groups.

However, Milwaukee still has constitutional home rule, which is sort of like a 10th Amendment for Wisconsin municipalities. It is a broad power, and any state law barring municipal residency requirements may be unconstitutional because of it. To be clear, the effort to eliminate residency without compensation by the state, suburbs, and public safety unions is an effort to steal from Milwaukee taxpayers. If they get their law passed, the city would best serve its taxpayers by pursuing a legal challenge to the constitutionality of a state residency ban.

The state, suburbs, and public safety unions will continue to abuse the city and its taxpayers until we stand up and do something about it. Meanwhile, we cannot adequately address the issues of taxes, poverty, education, and livability without their cooperation. The residency issue gives Milwaukee an opportunity to test the range of its home rule powers. We should seize that opportunity and continue to aggressively and creatively use all of the city’s powers to convince others to stop stealing and start negotiating for our mutual benefit.

Nathaniel Holton is an Urban Policy Consultant and proud Milwaukee resident.

Categories: Politics

10 thoughts on “Yes, End the Residency Requirement”

  1. Jeff Jordan says:

    Well said and right on the mark. We have to get off of our collective behinds and insist on the right to govern this city the way we want and quit going to Madison hat in hand begging for what we want. I particularly note the authors reference to our “underwhelming state representation”. My assessment is, that like good liberals, they are all well meaning people that can’t find the same page in the hymn book much less sing in the same key.

  2. David Ciepluch says:

    I would rather see the title of the article – Exploring Options for Ending Residency.

    I have been a proud 5th generation resident of the City of Milwaukee. This is the first time I have seen worth while ideas that could be explored. While I do not agree with striking union representation, it was wrong to pit one public sector against another with Act 10. All working groups should be allowed to have representation fighting for their rights, safety, fairness, and benefits in the workplace. Act 10 was nothing but a divide and conquer strategy and has soured half the state and destroyed any further trust in the current State of Wisconsin administration.

    As to the claim of under-representation, that is really a misleading statement. Milwaukee is outnumbered. All you have to do is look at the voting results and Milwaukee is boxed in. Representatives from small cities, towns, and rural areas have very little in common and shared interests with an urban area with diverse people and cultures.

    Further analysis should be explored for a Metro style government for shared police, fire, and educational, and municipal services. Creation of an entire raft of charter schools further sucks away tax dollars at the expense of public schools. Milwaukee residents house the training facilities for certifying police. Our taxes pay for the required training and they can leave for the suburbs resulting in a revolving door of training costs for taxpayers.

    I like the idea of a County sales tax and the current tax for the stadium and downtown conference center could be shifted for services, parks, and transportation.

  3. Andy says:

    Admittedly in the past I supported an end the residency rules. But now as a homeowner in the city of Milwaukee, the idea scares me. I have too much personal skin in the game to risk what could happen without some way of encouraging more people to move into the city. Nathaniel’s points regarding property taxes are a step in the right direction… but I think it misses the biggest deterant to residency in the city. That biggest deterant for many of my friends is simple… MPS. Anecdotally, the main reason people I know avoid Milwaukee is because of the real or perceived issues with the school system.

    In fact, as I get closed to having children myself, I will be looking to “escape” as well to nearby suburbs of Wauwatosa or Shorewood where the taxes are similar but the school systems are not. I know it sounds selfish to say… but you only have one shot to raise your children and any good parent will want to do everything in their power to give their children as much of a leg up on their lives as possible. Since I can not afford private schools and the voucher/charter systems (while enticing) are too much of a crap shoot… I’ll probably head the way of my peers.

    Rest assured, when the children have gone on to college or start their professional lives, I’ll probably move back to the city I love. Unfortunately, I don’t think my plan is unique… and ultimately if we can’t change the minds of people like me, the city is doomed to continue on it’s current path.

  4. Bob says:

    Andy, I couldn’t agree more. I am a proud resident of Bay View. I love living in the city and all that my neighborhood has to offer. As my wife and I get closer to having kids though, we are considering making the move to Shorewood. It will be a reluctant move, since I would much prefer to stay where we are, but sending my future kid to MPS just doesn’t sound like a viable option.

  5. Scott says:

    Bob (and Andy) I’d encourage you to take a closer look at several viable MPS options, particularly in Bay View. Fernwood Montessori has an outstanding reputation, is an MPS specialty school, and has a very active, neighborhood focused, parent community. I have a son at this very diverse, high achieving school and we’re very happy there.

  6. Kyle says:

    From the Fernwood website – “Selection is done through a lottery that is conducted by MPS.” and “Children who are older than 4 years old may apply for admission to Fernwood only if they have had continuous, previous enrollment in another MPS Montessori School …”

    So basically you get two chances at this lottery or you’re out of luck. When faced with the choice between getting each of my kids through the lottery system and moving somewhere just outside the city borders, most people just decide to not take the chance. The overall demographics for MPS just aren’t encouraging enough to stay. There are lots of statistics to cherry pick, but for the sake of argument, let’s go with household education. In MPS, 27.9% of households have someone with an associates degree or higher. In Shorewood, that number is 71.0%. So while MPS has some great specialty schools, I’d rather take a chance on education being a priority in a community with a record of making education a priority.

    (The disclaimer: My numbers are from priorityone, if you care to verify. Shorewood was the most extreme of the suburbs I checked in this statistic, but I chose it because it was the focus of the conversation. Menomonee Falls, for instance, is only at 41.6%.)

  7. Tony Tagliavia, Milwaukee Public Schools says:

    I would echo Scott’s comments and expand them.

    While no one would argue that MPS as a whole is at an acceptable level of academic achievement, there are a number of high-performing schools, many of which are right in the neighborhood/area you’ve been discussing.

    On the southeast side of the city alone (including Bay View), these schools meet or exceed the tough new standards set forth in new state report cards:

    Burdick School
    Clement Avenue School
    Dover Street School
    Fernwood Montessori
    Humboldt Park School
    Tippecanoe School for the Arts and Humanities

    Parents living there also have access to citywide specialty schools that meet or exceed expectations, including: Golda Meir, German Immersion, French Immersion, Spanish Immersion, Rufus King International School and Ronald Reagan College Prep High School.

  8. Scott says:

    Kyle, I really hope you’re not of the opinion that the Bay View community doesn’t consider education a priority. The countless hours that families in this community have invested in trying to find a solution to add Bay View High School to the (admittedly) short list of high achieving high schools in MPS speaks to that commitment.

    And just a few points of clarification, students from within a mile radius of a specialty school have preference in the lottery. I’ve not heard of anyone in 53207 who applied on time that didn’t get into Fernwood. There are approximately 70 K3 spots every fall. Also, siblings are guaranteed a spot. If you’ve got children under 4 you should arrange for a tour and see it for yourself. John Sanchez is the Principal.

  9. Kyle says:

    Tony, Scott – Yes, there are a number of quality schools within the MPS system. But finding that information is not always easy, particularly when other factors go into deciding where to live. Here is where I believe information about the performance of each school is supposed to be:

    But none of the files are found. And the State points you back here if you ask about individual MPS schools. So when I tried to make an informed decision for my family, all that was available was MPS’s reputation. If I lived in Bay View, I would seriously consider Fernwood. But I’m not going to move to Bay View when I’m already settled in a different neighborhood.

  10. mike says:

    As a Chicago resident, I love Milwaukee. As a former owner of a condo in Milwaukee, I hate the high property taxes that were levied. Taxes on my downtown Chicago condo are 2800.00 dollars on my unit that is worth 380,000 while my unit on the east side of Milwaukee were close to $5000.00 and my unit was worth in the $200,000.

    Getting rid of the residency rule is not the answer because over and over again is what you find is that people live outside and work in the city, will make the money in the city and enjoy all the benefits that go with it but have no connection with those who do. The city loses out on tax dollars because those who live outside will spend their tax dollars in their respective towns, with those dollars changing hands several times outside of the city before they(dollars), if ever reaches those in the city. Chicago has a residency rule and it works well. If one wants to work and enjoy the benefits of the city then they should be a part of it and be required to live there.

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