Treasurer Coggs Rejects Budget Cuts
Mayor's proposed budget eliminates temporary workers, could begin eliminating practice of paying taxes in person.
Milwaukee’s fiscal problems are threatening to create fissures between elected officials at City Hall.
“They didn’t propose any cuts. They basically said ‘the budget’s not padded.’ So we proposed a cut they didn’t like, but they basically didn’t give us any other option,” said budget director Nik Kovac to the Finance & Personnel Committee on Sept. 29.
“I’ve been preparing our department’s budget, believe it or not, since 1978,” said deputy Jim Klajbor. “And we’ve never padded the budget. If we needed a buck, we asked for a buck.”
“The loss of one-third of the temporary help will definitely adversely impact the level of customer service our joint constituents have come to expect,” said Klajbor. The longtime deputy said the number of temporary tellers working the payment counter would be reduced from six to five, the people answering phones from four to three and customer service counter workers from two to one. Additionally, no temporary worker would be available to do document imaging as needed.
“[The cut] would hurt our ability to collect the requisite revenue,” said Coggs. “We have endured cuts in the past, but now we’re at a critical juncture… the question becomes, ‘why would you shoot yourself in the foot and impede our ability to collect that revenue?'”
Kovac isn’t concerned that fewer people will pay their property taxes. “I think if you’re waiting in line to pay your bill, you’re going to find a way to pay it,” said the budget director.
The city has a decades-long tradition of people waiting in line at City Hall to pay their property taxes, even as easier options such as mailing a check, using a drop-off box or setting up an electronic funds transfer have gained traction.
An additional budget change, known as the personnel cost adjustment, would create a scenario where the department would be unable to immediately fill any new vacancy in 2023. The proposed budget sets a target of $52,085 in vacancy savings, up $17,831 from the year prior. The savings accrue when a budgeted position goes unfilled.
Coggs said he wasn’t ignoring Kovac and Johnson’s request. “We are down to the bone period,” said the treasurer.
Alderwoman Milele A. Coggs, the niece of the treasurer, thanked the Treasurer’s Office representatives for explaining their viewpoint. “This is a rare occasion to have a department come and not agree with the cuts and be vocal about it,” she said. “I want to say ‘thank you’ because too often we’ve sat across from department heads who knew the cuts that were being asked would have a dire impact, but, in attempting to be one with the administration, they were not being as vocal as they should have been.”
“Given the impact of a drop of just a couple of percentage points [in tax collections] could have a far greater impact than that $36,000, why did you all even make that cut?” asked Coggs.
Kovac said it was partially embedded in the fairness of applying cuts across the board. “Nobody is going to come and say they padded the budget,” said the budget director. “Partly too, we don’t understand the details of their management structure. For us to go in and yank out a manager. A. It would have been a layoff and B. might have had real consequences that we didn’t anticipate, only they know. So we looked at seasonal frontline staff.”
“Even if they had participated in the exercise, I doubt we would have gotten to a much higher number than this,” said the former alderman. “[The other departments] at least spelled out options, we considered them and if it was a bad idea we agreed it was a bad idea and pulled back.”
The office’s budget would still increase by 3% to $3.91 million, though much of that can be attributed to the rising costs of a software vendor and postage and the one-time purchase of new computers. The office has 28 full-time employees.
Kovac said part of the proposed 2023 cuts many departments will see is to serve as a “stress test” to see how things might go in 2024 when the city will need to make substantial cuts because of rising pension cuts.
How effective is the Treasurer’s Office? It reports spending 53 cents for every $100 it collects in property taxes in 2021. It collected $914 million in property taxes, approximately two-thirds of which must be distributed to other taxing entities like Milwaukee Public Schools. It issued 198,242 payments to other entities, including city vendors.
The full council will adopt a final 2023 city budget in November.
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Read more about 2023 Milwaukee Budget here