Rob Henken
Op Ed

Why County Needs New Fees

Revenue shortfall can only be made up with a higher wheel tax, parking fees or bus fares.

By - Feb 15th, 2018 10:23 am
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Lake Park. Photo by Dave Reid.

Lake Park. Photo by Dave Reid.

First, it was cuts to homeless shelters, then elimination of bus routes, then closure of the Schulz Aquatic Center, and now the prospect of parking fees at Milwaukee County parks.

These actions leave many asking: What’s going on in Milwaukee County? Why are these unpopular moves being proposed, and is the financial situation really so bad that such remedies need to be considered?

The answer, unfortunately, is “yes,” but you wouldn’t know it from the rhetoric flying around these proposals. The passion of opponents is understandable, but there also is a need to acknowledge the underlying financial realities that leave the county few options.

The Wisconsin Policy Forum conducts annual reviews of the county budget and has been warning about the inevitability of this dilemma for years:

  • In our analysis of the 2015 county budget, we noted the ability to bridge a substantial budget gap without “slashing services or raising taxes” was a significant feat, but warned “because certain longstanding problems continue to linger, the degree of difficulty is likely to increase in future budgets.”
  • Two years later, we stated “the county’s long-term structural imbalance finally has caught up to it” and warned “a sizable injection of new revenue is required if existing service levels are to be maintained and if the needs of the county’s most critical and expensive capital assets are to be addressed.”
  • Last October, in our review of the 2018 budget, we reminded policy-makers “the County’s structural imbalance has been widely analyzed and discussed for years and its causes certainly should be well known.” We reiterated that the solutions also are well known: “Either revenues need to be increased, or services need to be reduced.”

This is not rocket science. The county has a set of significant fixed costs related primarily to retirement obligations and aging infrastructure. Those are highlighted by its immense annual pension fund payments, which cannot be meaningfully reduced for quite some time for legal reasons.

Meanwhile, the county’s existing revenue structure provides little annual growth to keep pace with annual increases in fixed costs. The result is a structural gap that requires unpopular action every year on the revenue side, the expenditure side, or both.

To make matters worse, the menu of options on both sides is extremely limited. Under state law, the county lacks local tax options beyond the property tax (the annual growth of which is capped by the state) and the sales tax (which is limited for counties to the half-cent Milwaukee County currently imposes). That leaves fee increases — such as the vehicle registration fee, bus fare increases and parking fees — as its only options on the revenue side.

On the expenditure side, counties were created to provide certain services on the state’s behalf. When budget cuts are required, these mandated functions — like human services, the sheriff, and courts — must largely be spared, leaving discretionary functions like transit, parks and swimming pools to bear the brunt. In fact, the homeless shelter grants that were on the chopping block earlier this year were considered because they are one of the few remaining discretionary expenditures in the county’s human services budget.

Despite these fundamental realities, every time spending cuts or revenue increases are proposed at the county level there is the same outrage and the same calls (which are never heeded) for state government to send more money to Milwaukee County.

What is most dismaying about this year’s repeat performance is it’s getting the county nowhere. As each controversial cut or revenue increase is disputed in a vacuum, efforts to forge consensus on big-picture solutions — as difficult as those may be — never take place. Instead, what gets adopted are stop-gap remedies that don’t achieve permanent deficit reduction and only worsen the next year’s budget gap.

It’s been more than a decade since the Journal Sentinel published an investigative series titled “Road to Insolvency” that tried to focus public attention on the unsustainable nature of the county’s fiscal framework. Unfortunately, that picture has not changed.

It’s time for realistic and collaborative strategic planning among both branches of county government — and, ideally, among state leaders as well — to mutually define the depth of Milwaukee County’s fiscal challenges and determine a long-term path forward.

Rob Henken is president of the Wisconsin Policy Forum, a nonpartisan, independent public policy research organization. 

This column was originally published by the Milwaukee Journal Sentinel

Categories: Op-Ed, Politics

6 thoughts on “Op Ed: Why County Needs New Fees”

  1. Troll says:

    Scott Walker was criticised by the left for collecting a state paycheck while running for President , yet Rebecca Dallet can collect a paycheck from the County as she runs for state office. No hypocrisy there. Administration officials can always cut back on public perks. Why do County employee collect so many personal days plus sick days roll over. A County employee can a mass a hundred sick days.

  2. Virginia says:

    Mr. Henken, thanks for all the Forum’s excellent research over the decades, including on parks issues.

    Do you know if anyone has studied states such as Connecticut that have wheel taxes indexed to a vehicle’s value. Thus, someone owning a junker pays less than someone with a Lexus. What would it take for Milwaukee County to move to such a system if an indexed wheel tax were deemed a worthy goal?

    Also, has the Forum (or others) studied the impacts of increased “user fees” on attendance at pools, etc. as well as on public health and quality of life. Milwaukee County Parks already collects a very high percentage of its operations budget from earned revenue, including park-usage fees (now 50% and rising to 62% this year, as opposed to the national median of 29%).

    Many park systems now set policies with a goal of ensuring equitable access for all. How might access to the lakefront and other parks be affected if parking fees are imposed (up to $2.50 an hour), especially in those without direct mass transit (which includes most lakefront parks)?

    Also, what is Milwaukee County’s property-tax cap and has it reached that cap?

  3. Bill Marsh says:

    We are only at the beginning. Public employee unions in cahoots with politicians have sold out the taxpayers. The squeeze is just starting and the mission of governmental entities to serve the public will be curtailed to pay pensions and health care benefits for government employees retiring in their 50’s. Meanwhile ordinary taxpayers, nearly all of whom don’t have employer-paid defined benefit pensions and employer-paid health care for early retirement, will have to work longer to collect social security. Apparently the government believes taxpayers are able to work until our late 60’s, but public employees not so much.

    Instead of raising taxes, how about having public employees work until the age normal citizens can collect social security retirement benefits? How about 401K retirement plans for public employees, just like ordinary taxpayers? How about banning public employee unions from making campaign contributions to politicians that affect public employee benefits?

    As to Milwaukee County government- it still is fat. The park system is over-staffed and highly inefficient (what are park employees doing during our long winters?). County employees still retire in their 50’s and county employee’s still pay a small amount for their pensions and health care. These changes should have been made long ago, especially after the Ament pension fiasco. The county board has fought reform throughout the years. And now the corrupt system is running into fiscal reality. How sad.

  4. NealB says:

    In 2008 MIlwaukee County voters approved a 1% sales tax increase to provide for parks and property tax relief. The additional $65 million annually to be allocated for parks would by now have at least begun to resolve the problems, but it was rejected by the State legislature. The measure was criticized for “tripling” the sales tax from current .5% to 1.5%, but Milwaukee’s current .5% local tax rate remains among the lowest in the country. If other states have raised sales taxes to maintain local services and quality of life, there’s no good reason why the same solution couldn’t happen here. The sales tax remains an option, a viable one, and it should be included in the discussion of ways to raise revenues for County parks.

  5. Jake formerly of the LP says:

    And to add to Neal’s point- given that Milwaukee County is the largest draw of tourism dollars in the state, raising the sales tax hits non-residents more than these higher fees for the parks. Which means that Milwaukee Co residents aren’t shouldering as much of the burden on services that results from those tourists.

  6. TransitRider says:

    Bill Marsh, you claim that Milwaukee County Government is fat. In 2014, Milwaukee County collected $368/resident in taxes ($294.79 county property taxes, $73.52 county sales tax), which is barely more than the $354 Washington County collected that year—just a 4% difference.

    That 4% difference funded a bus system that runs nearly 24/7, a zoo, the Domes, another major botanical garden (Whitnall), an international airport, and a second airport for general aviation. The County owns the Public Museum (one of America’s largest natural history museums) and owns the building containing the Art Museum. Does Washington County have anything comparable to any of these? Do you think Washington County Government is fat?

    One other difference nobody talks about: freeway patrols. The Milwaukee County Sheriff patrols its freeways, but (I think) in every other county, the State Patrol does this. Does the state fully reimburse Milwaukee for its freeway patrols or is this just another example of upstate politicians sticking it to Milwaukee?

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