County Ends 2020 with $32 Million Surplus

 

Milwaukee County finished 2020 with a $31.9 million surplus.

This outcome stands in direct contrast to projections from early 2020 that predicted the county would finish with a deficit of about that size, a dramatic turnaround due largely to funding the county received through the federal CARES Act.

This is the latest estimate of the county’s year-end fiscal position, and it’s most accurate to date, as CJ Pahl, financial services manager in the officer of the comptroller, told the Milwaukee County Board’s Finance Committee. It’s also double the surplus county officials were projecting (of $10 to $15 million) as recently as December.

The county, like many other local and municipal governments in Wisconsin, has struggled to pay for the services it provides for more than a decade thanks largely to an imbalance in funding it receives from the state government.

Many county operations are mandated by the state, and despite this, under the state’s shared revenue formula, state funding to the county hasn’t even kept pace with inflation for years.

In early 2020, even before the pandemic arrived in Milwaukee, the comptroller was estimating the county would finish the year with a $34 million deficit. That number slowly went down as departments reduced their expenses and administrative orders froze new hires, contracts and overtime.

But the biggest contribution to the year end surplus was the CARES Act grant the county received, totaling $77 million.

Pahl said approximately $20 million in CARES funds was used to cover what she called Substantially Dedicated Personnel Costs, which went to public health and public safety employees that received pandemic pay.

The Milwaukee County Sheriff’s Office had a $12.6 million surplus in 2020 and $12.3 million of that was due to CARES Act funding. Without that funding the department would have had a surplus of approximately $300,000.

Similarly the House of Correction would have had a deficit without CARES Funding, but finished the year with a $4.6 million surplus.

The Parks Department finished with a $3.2 million surplus, which was due in part to better-than-expected revenues at the end of 2020.

Federal legislation passed in late 2020 allowed local governments to rollover unspent CARES funds into 2021. In February, Joe Lamers, budget director for the Department of Administrative Services, said this change was little consolation for the county, which was already on track to spend down all of its allocation on expenses in 2020.

CARES Act funding was critical to the county’s surplus and also its response to the COVID-19 pandemic. Notably, the county allocated more than $10 million for rental assistance, which helped avert more than 4,000 evictions in 2020, according to James Mathy, housing division administrator.

County Executive David Crowley repeatedly advocated for more federal COVID-19 related funding for state and local governments in 2021.

Under the latest stimulus bill, the American Rescue Plan, Wisconsin received a $5.7 billion allocation. $1.1 billion of that is going to counties, and Milwaukee County’s estimated allocation is more than $180 million, which would be more than twice the funding it received under the CARES Act.