Jeramey Jannene
City Hall

Mayor, Council At Odds Over How To Prepare For Fiscal Cliff

But there is unanimous agreement that city faces a looming crisis.

By - Oct 27th, 2022 05:38 pm
Milwaukee City Hall. Photo by Jeramey Jannene.

Milwaukee City Hall. Photo by Jeramey Jannene.

Mayor Cavalier Johnson‘s proposal to cut library hours and two fire engines in 2023 in preparation for a looming $150 million 2025 budget gap isn’t sitting well with the Common Council.

The council is poised to reverse the $4 million cut, using funds that Johnson’s administration warned would only make future cuts larger. Its members are also calling for more time to review future budget proposals.

Due to state restrictions on raising new revenue, long-frozen state aid, the expiration of a COVID-era federal grant and an anticipated increase in costs to fully fund the pension system, the city faces a looming need to begin laying off one in four workers in 2025, including police and firefighters.

Johnson’s administration has described the proposed cuts to the $1.7 billion 2023 budget as a move to soften the blow of likely future cuts while the city continues to work with the state on potential new revenue sources. But the council now wants more time to communicate about the fiscal cliff with residents.

“Cutting life-saving services while having the means to preserve them just feels irresponsible,” said Common Council President Jose G. Perez to the Finance & Personnel Committee Thursday morning. “Many of us, in communication with one another, didn’t feel that the community was ready for drastic cuts to libraries and services across the city.”

The mayor’s proposal would eliminate Saturday hours at four of the 12 branch libraries and shutter the Martin Luther King Library while a replacement is built. The fire department would see two engines mothballed and the associated positions eliminated by the end of the year.

“We do need more time,” said finance committee chair Alderwoman Marina Dimitrijevic. “We do want to have the time to communicate with our constituents the changes that lie ahead.”

But budget director Nik Kovac warned the committee that reversing cuts would make future cuts larger. The council’s strategy involves restoring the positions in part by using an unspent portion of the city’s American Rescue Plan Act (ARPA) grant that otherwise likely be used to fill an expected gap in the 2024 budget.

“I don’t want you to think your warnings fell on deaf ears,” said Alderwoman JoCasta Zamarripa. She said there was lots of debate about what the appropriate thing to do is.

Kovac said Johnson supported reversing the temporary closure of the King branch and eliminating the cut to one of the four other branches by using approximately $600,000 in savings from a previously unanticipated delay in starting a police recruiting class and needing to make a smaller payment than anticipated to the Milwaukee Area Domestic Animal Control Commission (MADACC). “Beyond that, we feel is irresponsible,” said Kovac.

But the use of the word “irresponsible” resulted in pushback from Ald. Milele A. Coggs and several others. “I think that is an unnecessary depiction of actions being taken,” said the alderwoman.

Kovac, a former council member, said that restoring the cuts could make it more difficult to get community engagement on the city’s looming issues. “We all know hypothetical conversations have empty rooms,” said the budget director.

But Perez said the council was committed to raising the issue with residents starting January 1. In an interview, he said he would make sure the discussion happens at meetings where people already are, including crime and safety meetings. He also backed the concept of trial closures, like shuttering specific libraries on Saturdays with messages about what was to come, as a strategy to explore other service delivery models and raise awareness.

“I think they should be doing the stress test now in preparation for these things,” said Perez. “That’s the way we can engage people in a different way that aren’t engaged right now.”

Perez said he didn’t think former Mayor Tom Barrett was interested in engaging the public on the looming need to cut services. He said he’s committed to discussing the issue with residents and with state legislators. The first-time council president said he thought business leaders needed to better understand the issue, including that the city has growing expenses but can’t raise revenue.

The council president said he thought Johnson, his former council colleague, was approaching the issue differently. Johnson pledged on the campaign trail that he would get a cot in the Capitol if that’s what it took to get a deal with the state.

“I think we forget how many new people [are involved],” said Dimitrijevic in an interview. Johnson as mayor, Kovac as budget director, Perez as council president and Dimitrijevic as finance committee chair are all going through their first budget cycle in their new roles. “We put our best foot forward and had a pretty engaged process.” She said a second public hearing, held as a hybrid in-person-virtual event, was informative, but that there still wasn’t a feeling of sufficient community engagement.

“There will be changes to city services. Don’t take the work done today and think we’re resistant to that,” said Dimitrijevic.

The longest-serving council member isn’t backing his colleagues’ proposal, but he is in agreement about the severity of the situation.

“The fiscal cliff is so bad that these tiny cuts we are talking about are immaterial,” said Ald. Michael Murphy. He was the lone council member to vote against the measure, which passed on 4-1 committee vote. Murphy said his vote came, in part, because the budget amendment does not address a staffing reduction within the Milwaukee Police Department, triggered largely by rising salaries.

The full council is to vote on the amendment on Nov. 4. Nine of the 11 sitting council members are listed as sponsors.

Johnson, said a spokesperson, has not committed to vetoing or approving the measure. “At this point no final decisions have been made about signing the council file,” said the mayor’s office. A mayoral veto could include a proposed substitute amendment.

The council would restore the library and fire department funding through an omnibus amendment. The proposal also includes $500,000 for the Department of City Development‘s Commercial Corridor Program, $100,000 for the Healthy Food Establishment Fund, $100,000 for an emergency medical services matrix study, $50,000 for a Community Excellence Fund to provide matching funding for events focused on peace and violence prevention, $42,576 to reverse proposed cut to seasonal tax collection workers in the City Treasurer’s Office and a reconfiguration of Department of Public Works funds intended to increase the number of times that vacant, city-owned properties are mowed.

Joining Dimitrijevic, Perez, Zamarripa and Coggs as cosponsors are Russell W. Stamper, IIRobert BaumanKhalif Rainey, Mark Borkowski and Nikiya Dodd.

Much of the funding would come from the city’s $394 million ARPA grant. Approximately $20 million has not been earmarked to plug budget holes or advance capital projects like street lighting upgrades.

The $4.75 million omnibus amendment would use $2.5 million of the unallocated funds. But there is an intent on behalf of the sponsors to replace those funds with $2.5 million in expected new funding from an under-development state program that would reimburse ambulance costs using Medicaid funds. Comptroller Aycha Sawa declined to certify that revenue for use directly in the 2023 budget given the uncertainty on how much it would be and when it would arrive.

Two blocks of already-allocated funds would be reprogrammed. Approximately $1 million allocated to the Milwaukee Health Department for lead abatement and $500,000 for street lighting upgrades from the Department of Public Works would instead fund restoration of the service cuts. In both cases, a multi-million dollar allocation is being reduced and funds weren’t expected to be spent in 2023.

The proposal also relies on $634,000 in savings by delaying a 65-member police recruiting class by eight weeks and $114,412 in savings by reducing the city’s annual payment to MADACC.

Police Cut Reversals Fail

The committee did not recommend the full council reverse a proposed 17-member reduction in the average sworn strength level in the Milwaukee Police Department, despite considering two amendments on the issue. The committee’s omnibus amendment also expands the size of the reduction, which would come through retirements and resignations.

A practical reality is already likely to extend the cut on paper. The trainers for a 65-member recruiting class are available six weeks later than expected, but the omnibus amendment expands the savings, and reduces the average sworn strength level, by delaying the class’s start date an additional two weeks. A second 50-member recruiting class, funded by a federal COPS grant, would start later in the year.

Murphy introduced an amendment to add 15 members to the second recruiting class, but the committee voted against it. The alderman proposed to use the property tax levy to fund the expansion, which Kovac cautioned against given that it would push the city up against state levy limits. If the city exceeded a limit it would face levy reductions in future years. Murphy had originally intended to use the savings from the delay of the first class to expand the second class, but the committee spent those savings as part of the omnibus amendment.

Ald. Scott Spiker introduced an amendment that would reprogram some of the Office of Violence Prevention’s ARPA funding to pay for reversing the cut. He said the department looked like a “large piggybank” when it came to finding money to reverse policing cuts.

“I wish that we wouldn’t politicize the issue. Public safety is important to me as well,” said Zamarripa in response. “I think this amendment seems quite devise actually… The optics look terribe.”

Violence prevention director Ashanti Hamilton, a former council member, said that little of the department’s budget wasn’t tied to grants.

Spiker’s proposal failed on a 1-4 vote.

The full council could vote to adopt the rejected amendments at its budget adoption meeting next week.

Johnson’s September budget proposal calls for the police department to have an average sworn strength of 1,640 members and a steady budget of approximately $300 million.

Taxes and fees for the median single-family homeowner are expected to increase by approximately $48.60 under Johnson’s budget. That includes a 4% increase in fees for water and other city services, the bulk of the increase.

The actual city property tax rate (mill rate) is expected to fall by almost 10% from $10.16 per $1,000 in assessed value to $9.16. The figure is calculated from the cumulative assessed value of all properties in the city, which increased 13% in the past year. Individual assessment increases or decreases do not directly impact how much the city can collect, but instead change the percentage of the whole a specific property pays.

As a result of new construction and a small state-allowed increase in property tax revenue, the city expects to collect 2% more in property tax revenue in 2023. But adjusted for inflation, the actual property tax levy will have fallen by $6.3 million annually since 2013. More significantly, adjusted for inflation the city now receives $155 million less annually from the state in shared revenue than it did in 2000.

The budget includes a 2% raise for all general city employees (non-police and fire workers) and an additional, one-time 1% raise for employees who have been with the city for at least five years. Sworn police and fire employees are protected by collective bargaining and subject to labor agreements that have raised their wages faster than city workers since Act 10 was adopted.

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More about the 2023 Milwaukee Budget

Read more about 2023 Milwaukee Budget here

More about the Local Government Fiscal Crisis

Read more about Local Government Fiscal Crisis here

Categories: City Hall, Weekly

3 thoughts on “City Hall: Mayor, Council At Odds Over How To Prepare For Fiscal Cliff”

  1. Wardt01 says:

    Perez appointing the JV team to run the Finance Committee from now until we hit the cliff in 2025 was an immense mistake. And his pick for the Chair of the Committee may end up making this entire boondoggle an even bigger train wreck.

    Murphy is 100% correct, while the other 4 are shuffling nickels & dimes around hoping that Santa Claus & the Easter Bunny will save us.

    Being a leader means you have to make tough decisions, and right now that means the city has to #1 cut spending & #2 start shining the spotlight 24/7 on the problem which is the pension plan.

    Don’t just “talk about the cuts to services”, explain over & over that because some city employees refuse to even discuss any cuts to their generous benefits & pensions…. that is the reason the other 99% of city residents have to suffer.

    Hammer that message every day for the next year and then put it to a referendum & let the citizens of Milwaukee vote on it.

    the media and journalists need to get on board as well. Every time an article on this issue is written, dedicate at least 50% to explain that if xxx cuts were made to the retirement benefits, then the firehouse & libraries could stay open.

  2. dmkrueger2 says:

    Amazing they are reversing a $4MM cut to spending.
    How in the world are these folks going to manage a $150MM cut in 2025?

  3. MilwMike1 says:

    Perhaps privatizing the fire and police departments are something that could be discussed. It’s not like they are city residents.

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