You Can Help City Balance Its Budget

Even without a global pandemic the City of Milwaukee was poised to have a difficult time passing the 2021 budget.

Four factors are combining to put city officials in an increasingly difficult place: the rising costs of public safety, a quickly growing need to contribute more to the city’s pension system, state restrictions on raising revenue and declining revenue sharing from the state.

A new survey and companion interactive budget tool asks residents to voice their opinions on how to close the $52.7 million structural gap the city faces.

The “Budget Priority Survey” doesn’t ask individuals to give a specific figure for departmental budgets, but instead to assign a hypothetical $100 between six groups – city development, fire & emergency medical services, libraries, neighborhood services (code enforcement and permitting), police services, public health services and other.

It also asks respondents to prioritize which fees or taxes should be increased first, with options ranging from the property tax rate and wheel tax to parking citations and the solid waste fee.

The Balancing Act budget simulation tool allows individuals to make cuts to much of the budget that is discretionary, including reducing the police department or public works budgets. It also includes specific options like shortening the time street lights are on by 10 minutes to save $210,000 or closing a branch library to save $600,000.

Simulation users can also increase (or decrease) licenses and permit costs without specifying details as well as adjust the $20 city vehicle registration fee. The only specific revenue increase offered is to increase fees at the two city dropoff centers by 50 percent ($700,000 estimate), a move that has already drawn skepticism from some council members.

The survey component includes a polling question on a one percent city sales tax. The measure is anticipated to generate $70 million if the city were to receive all of it, but a city-county-suburbs coalition is seeking to split the funds. The proposal needs state support to be enacted.

Respondents to the survey are asked to indicate their top three goals for city government from a list of six, including “building safe and healthy neighborhoods” to “helping children succeed, prepare for post-secondary education, and meet their full potential.”

The city derives funding from a variety of sources, but is highly dependent on property tax revenue. It faces a growing challenge with its property tax reliance: every single dollar goes to public safety. The Milwaukee Police Department is slated to receive $297 million in 2020 from the city’s $291 million property tax levy.

The city also derives revenue from everything from parking meters and selling water to permits and fees.

But Milwaukee faces many challenges in increasing revenue. State law both caps the city’s property tax levy with few exceptions and prevents it from raising new revenue from other sources including a sales tax or income tax. An even greater problem is that state budget allocations have reduced the amount of shared revenue sent to Milwaukee and other municipalities since 2003, with no adjustments for inflation. A city report notes that if the city received its 2003 allotment adjusted for inflation it would have received $333.9 million in 2018; instead it received $228.2 million, an effective annual loss of $105.7 million.

In 2020, the city will contribute approximately $70 million to maintain the pension as fully funded as the city charter requires. Approximately 80 percent of that will go to support public safety employees that are exempt from Act 10. That figure is expected to grow to $160 million in three years.

The survey is available online in English, Spanish and Hmong.

Mayor Tom Barrett is scheduled to present an executive budget to the council for review in late September. The council is scheduled to adopt a final budget in November.