Budget Starts With $13 Million Hole

The annual process of assembling next year’s budget for Milwaukee County government has officially begun.

Recently, county department leaders delivered their operating budget requests for 2023 to Milwaukee County Executive David Crowley. Their budget proposals total approximately $1.2 billion, which is roughly the size of the 2022 budget.

Crowley began the annual meeting with an address to the department heads, who were all meeting virtually, and the public. He said that the budget process for 2023 is beginning with a $13 million deficit. This is the size of the county’s annual structural deficit, which roughly tracks with the annual inflationary cost increase necessary to continue funding the government in its current capacity, or, as county officials term it, the cost to continue.

But that deficit could grow between now and the time that Crowley will sign off on a final budget for next year. Whether it grows or not will likely depend on the actions of the Milwaukee County Board prior to then.

The county is currently outspending its 2022 budget, in large part due to the dual pronged problem of increased placements of county youth in state-run correctional facilities and the increased cost the state charges the county to incarcerate them. For these reasons, as of July, the county’s Department of Health and Human Services is projecting a $5.9 budget deficit this year.

Fortunately, many other departments are projecting budget surpluses by the end of the year, leading to a projected total budget deficit for 2022 of approximately $800,000. That deficit figure assumes that all the money currently in the county’s contingency fund, sitting at approximately $3.9 million as of July, will be used to offset the deficit.

For more than a decade, state aid to the county has been flat while the cost to continue rises every year with annual inflation. During the past decade, the county has faced an average annual deficit of approximately $30 million – resulting in $30 million in cuts to services. If state funding had kept pace with inflation since 2010, the county would have received an additional $455 million since then, as Urban Milwaukee has reported.

Since the COVID-19 pandemic hit, the county’s annual budget has been buoyed by federal pandemic stimulus funding. It received $183 million in funding through the American Rescue Plan Act (ARPA) and $77 million through the CARES Act. The transit system in particular has been relying heavily on federal funding just to maintain the system as it exists. But those funds will run out in the coming years.

Milwaukee County officials have estimated that the county will fall short by approximately $87 million over the next five years, or an average of $17.4 million per year.

“I know every leader in the county would like to use the 2023 budget as an opportunity to do more for our community, more for our residents and more for the future of all of Milwaukee County, but it is important to keep in mind the fiscal realities that we face,” Crowley said. “Solving this problem by cutting services is not possible, nor is it sustainable; solving this problem by taking money from departments offering key services or state mandated services is not possible, nor is it sustainable.”

Crowley said that county leaders have managed to pass two budgets since he took office without making major cuts to county services. But, Crowley noted, the solution to the county’s larger financial problems lies in finding a way to generate new revenue for the county.

In saying this, Crowley was referencing the push by county leaders that began under County Executive Chris Abele’s administration to secure an increase in the county sales tax. To do so, it will need authorization from the state Legislature to hold a binding referendum on whether or not to raise it.

For county residents who want to weigh in on the annual budget, the county has brought back an online interactive tool called Balancing Act. It allows citizens to tinker with funding and try to balance the county budget. It’s intended to be a source of information on what county residents prioritize.

Crowley is also hosting a series of five budget town halls around the county. The first was Monday at Nicolet High School in Glendale.

The remaining town halls include:

Washington Park Senior Center
4420 W. Vliet St., Milwaukee
Thursday, Aug. 18 at 5:30 p.m.

Oak Creek City Hall
8040 S. 6th St., Oak Creek
Monday, Aug. 22 at 5:30 p.m.

Virtual Budget Town Hall
Tuesday, Aug. 23 at 11:30 a.m.

Kosciuszko Community Center
2201 S. 7th St., Milwaukee
Wednesday, Aug. 24 at 5:30 p.m.