7 Goals of County Fair Deal Group

Milwaukee County’s Fair Deal Work Group tasked with determining solutions for the county’s fiscal crisis adopted a set of recommendations that it will now send to the county board.

The group was created last fall through cooperation between the county board and the county executive that was unprecedented in recent years. In the month since the group first met, they’ve peered into the county’s financial future with increasing alarm. The big theme, one County Executive Chris Abele and County Board Chairman Theo Lipscomb have been trumpeting, is that Milwaukee County sends an increasing amount of money to the state year over year, that costs increase year over year due to inflation and that in the last decade state aids to the county have been stagnant or decreased year over year.

Which has created a growing hole for the county. The county has an average structural deficit for operations that is $12.8 million annually. So by 2023, the county will be facing a structural deficit of nearly $80 million. And on top of that, there is a projected backlog of capital projects in the county that could total nearly $1 billion.

To fix the issue, the county, and its governmental peers around the state, will need to work with the state Legislature and the governor to implement solutions. So the resolution passed by the work group Thursday includes seven recommendations to the Legislature. Given that the Legislature is led by Republicans who show an unashamed antipathy for Milwaukee, the county will need to create a coalition of other counties around the state to get any consideration of its problems.

The way the state funds local governments affects more than just Milwaukee County. So from the start, Abele and Lipscomb have said the needed solutions for Milwaukee would also spread benefits around the state. So when the work group drafted their resolution, some of points strayed away from specifics. This was to ensure that solutions can be applied to other counties. And also, it allows the Legislature to have some ownership in any solution that is conceived.  

“I want to give them as many ways to say yes, and get to a solution,” Abele said.

Toward that end the seven recommendations are:

1. New Revenues

One of the first directives in the resolutions asks the state to let the county government have, “Additional options for local control over their own financial destiny.” The county wants to reduce its reliance on the property tax, of which Milwaukee County has the highest in the state. The county wants enabling legislation and a county-wide binding referendum to pass any new tax.

This recommendation would likely produce a referendum on a proposed sales tax. But it’s not specific, which means it leaves the door open for a new sales tax mechanism called the Pittsburgh Model.

This model creates a new governance structure called a regional asset district (RAD). Under this model, sales tax revenue would be split up between the governing board of the RAD, the county and the municipalities. And it would include prescriptions for how some of the revenue is spent and require increased intergovernmental cooperation between the municipalities. But a most attractive feature of a RAD, would be the dedicated funding streams it would create for popular services the county provides that are not mandated by the state, like parks.

As Jeremy Lucas, with the office of Performance, Strategy and Budget, pointed out in one meeting, the county has a lot of use for cultural funding, which is “often times the recipient of the cuts due to the fact that it is non-mandatory service.”

2. Increase State Aid in Pace with Inflation

The work group calls upon the state to increase contributions to services mandated by the state and other state aids. The funding should, at the very least, keep pace with inflation in areas like revenue sharing, basic community aids that fund elder care and drug and alcohol services, mass transit assistance and general transportation aids which fund road construction. And once again, this would be done merely by meeting the rate of inflation for mandated services and increasing other aids near the statutory limit.

3. Reimburse Sheriff for State Highway Patrols

The group also calls on the state to fully reimburse the county for patrols the sheriff’s department does of state-owned highways.

This an are where Milwaukee County is uniquely affected. It is the only county in the state where the local sheriffs are statutorily obligated to patrol state highways. Everywhere else these highways are covered by the Wisconsin State Patrol. This is due to a rule that only affects counties of a certain size, of which Wisconsin only has one: Milwaukee..

4. Equal Split of Court and Register of Deeds Fees

Right now, the revenue from court fees along with those paid to the register of deeds in Milwaukee County are shared with the state, with 80 percent going to the state. The work group wants an even 50/50 split. If this were enacted it would bring in roughly $9 million in new revenue to the county. The county often has to dip into local revenues to pay for these services that are used by state government, as well, according to Lucas.

5. Accept Federal Medicaid Expansion

Wisconsin is currently one of 14 states that have not accepted the medicaid expansion, and the only one in the Midwest. Matt McGovern, director of government affairs and a county lobbyist, said the expansion would lead to lower costs for private insurance, benefitting the entire state. So for large employers like Milwaukee County, this would reduce annual operating costs.

The expansion works like this: states with the expansion can add residents at 130 percent of the poverty level to Medicaid and then get reimbursed at 90 to 95 percent, McGovern said. States without the expansion can only add residents at 100 percent of the poverty level, and the federal reimbursement rate is in the mid-50s. So Wisconsin taxpayers pay more taxes to the state, to cover fewer people, he said.

Refusing the expansion is an ideological position, McGovern told the work group during one meeting. “Financially it doesn’t make a lot of sense.”

6. Adequate Funding for Juvenile Correctional Facilities

Under Act 185 juvenile corrections facilities like Copper Lake and Lincoln Hills are being closed. And in turn the state is authorizing county government to operate new facilities. The state will reimburse up to 95 percent of approved planning and construction costs. And it has allocated $80 million for a grant process. Of that, counties have access to $40 million. “It’s easy to see that the $40 million will not be a sufficient amount of money for all of the counties that wish to participate in this granting,” Lucas said in a previous meeting. For context, the new forensic science center the county has planned is expected to cost $24 million.

Because of this, and because there is no funding in place for operations of these facilities, the workgroup is calling on the state to provide adequate funding for these facilities.

7. Reject Reduction or Offset in Funding

Finally the group demands there be no reduction or offset in funding for the recommendations in their resolution below what will be in the 2019 budget.

How Would It Happen

Increases in shared revenue and state aid, and an equal share of fees are changes that could be made in the state budget, according to McGovern. They are already existing programs that could be adjusted or fees tweaked in a current formula. The referendum will require enabling legislation. Governor Tony Evers has already started advocating in the press for Medicaid expansion, but Assembly Speaker Rep. Robin Vos, has remained stalwart in his party’s position against the expansion.

All of these recommendations will likely require counties around the state joining Milwaukee in lobbying efforts at the Capitol. “We all have a shared interest in solving this problem, and we need help from leaders in state government to provide essential public services and invest in the future,” Lipscomb said in a press release.

The City of Milwaukee has already offered support, Abele said. And from the private sector allies have started to coalesce. “When you can get non-profits and the faith and business community, that’s usually a good thing,” he said.

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