City May Close Libraries, Cut 25% of Police and Fire Departments

Milwaukee Fire Department fire truck. Photo by Jeramey Jannene.

City of Milwaukee officials got a detailed look Monday at just how grim the city’s financial future is without state support.

The city faces a $156 million structural deficit in 2024 and has limited options, short of mass layoffs, for closing the gap.

“Devastating,” said Alderwoman Marina Dimitrijevic after the Steering and Rules Committee heard a presentation on what comes next. “The gloomiest days are ahead of us when really we should be building for the future.”

Council members requested department heads model 10%, 20% and 25% cuts, but even those cuts might not be enough to close the gap. Eliminating more than 400 positions from the Milwaukee Police Department (MPD) as well as body cameras and several crime-solving services would close only half the gap.

Mayor Cavalier Johnson is aggressively pursuing support from the Wisconsin State Legislature to address the issue, which was largely created by the state’s own policies. The state has enacted several prohibitions on enacting new taxes, imposed an effective cap on property tax revenue and long-frozen shared revenue. Adjusted for inflation, on shared revenue alone Milwaukee is short more than $155 million annually versus what it received in 2000. Costs go up, but revenue stays nearly flat.

A COVID-19-era American Rescue Plan Act (ARPA) grant will soon run out, exposing the existing gap. At the same time as the grant is expiring, the city must nearly double its annual pension contribution to $132 million to fully fund its system.

Council members are concerned that even if the state does grant increased shared revenue or a new sales tax, it won’t be enough to close the gap.

“I don’t like the fact that we are putting all of our eggs on a particular group of individuals at the State Capitol that don’t love Milwaukee,” said Alderman Mark Chambers, Jr.

Budget director Nik Kovac said three areas are, financially, the easiest to cut: the MPD, the Milwaukee Fire Department (MFD) and the Milwaukee Public Library (MPL). The three departments are funded primarily by property tax revenue, meaning cutting $1 in spending comes close to yielding $1 in savings.

“If we make cuts to sanitation we have to make cuts to the garbage fee,” said Kovac, illustrating how finding substantial savings elsewhere can be difficult. “There are some savings there, but not much.”

One-by-one, department officials demonstrated how ugly things would get.

The city could shut down the entire library system, with an estimated savings of $25 million, and still not be anywhere close to eliminating the deficit. MPL Library Director Joan Johnson said even a 10% cut, yielding $2 million in savings and eliminating 26 positions, would result in the closure of four of the 13 libraries. Johnson said staffing is already thin enough that eliminating a handful of positions makes it impossible to staff the existing branches. “We are so close to the bone at this point that taking a significant cut would mean closures,” said the librarian.

MPD’s situation, with a $300 million annual budget, is even more complicated.

Assistant Chief Nicole Waldner said the department focused its planning on cutting service contracts to preserve positions, but even that wouldn’t be enough to ward off layoffs. The department didn’t fully model how layoffs would be conducted with most of its employees being subject to complicated and well-protected union contracts.

But it did look at what it would cut.

“The animals were the first to go when we sat down,” said Waldner. The mounted patrol, used for crowd control and community relations, would be eliminated. But the city would need to keep paying a lease at MKE Urban Stables, something Alderman Robert Bauman and Milele A. Coggs warned might happen in 2018.

“Told you so guys,” said Bauman on Monday.

The horses, however, are only the tip of the iceberg.

To get to the larger cuts, Waldner said the department would eliminate body cameras, eliminate almost all of the ShotSpotter system, cancel its cellphone site simulator, cancel other camera contracts, end its domestic-violence-focused lease with Sojourner Truth Family Peace Center, drastically reduce its officer wellness psychological services contract and eliminate an internal investigations software tool.

“We could just eliminate guns,” said Bauman wryly after hearing the much-longer list.

“The body camera thing is very disturbing to me,” said Dimitirjevic. “This is very illuminating and I’m so glad we’re having this conversation publicly.”

Positions would be cut at all levels of the department. The budget office estimates the cuts would range from 241 to 602 positions to get to the 10% and 25% levels. MPD thinks it could do it by eliminating 25 positions, and lots of services, on the low end and 412 on the high end.

The 25% cut would include eliminating MPD’s District 6 station and ending third shift at District 4.

“Over my dead body,” said Alderman Mark Borkowski of the southside cut to District 6.

MPD is funded to have 1,630 sworn officers and has approximately 1,560 members currently in its ranks. Additional personnel in the department are not sworn, nor protected by union contracts.

Fire Impacts

According to Fire Chief Aaron Lipski, things would unravel even faster for the fire department. Even a 10% cut, he said, would result in the Milwaukee County suburbs bailing on a shared services agreement the departments have spent years developing.

“They are not exceptionally interested in the concept of subsidizing the City of Milwaukee’s budget problems,” said Lipski. He said he expected Wauwatosa, which recently relocated an engine to a Milwaukee fire station to better serve its residents, to immediately bail if it had to respond to even more Milwaukee fires. “I believe a 10% reduction would prevent a clear and present danger to the City of Milwaukee and its citizens.”

Lipski said cuts would also show up in home insurance rates. The chief said he believes the severity of many fires doesn’t show up in actuarial data because many structures aren’t insured, but as longer response times lead to longer-burning fires it would begin to increase rates.

“It’s a hidden tax on every property owner in the city of Milwaukee,” said Bauman. “Inarguably, yes,” said Lipski.

The budget office estimates cuts ranging from 89 to 222 positions to reach the 10% and 25% targets. MFD would need to eliminate 17 heavy apparatus, including 11 engines, to meet the bigger target. It would also need to decommission four ambulances.

The 25% cut would save $33 million. But even the 10% cut, said Lipski, would reduce the 29 engine companies to 23 and push those remaining well above their current average of 3,200 runs per year to “extremely unhealthy, dangerous, unsustainable” levels.

Lipski noted the workload is triggering a wave of resignations. Lipski said 31 firefighters left before retirement between 2000 and 2021, but in the past two years MFD has lost 21 members pre-retirement. “My firefighters and paramedics are burned out,” said Lipski. “You want to talk about risk, there is your risk.”

In the past 15 years, all three departments have had to endure personnel cuts.

What’s Next?

Johnson is scheduled to introduce an executive budget in September, but city officials hope they will have some answers on state support before then. The new state budget is expected to be completed this summer and companion legislation covering municipal fiscal issues is expected to be discussed at the same time.

The city might have one more year of partial calm-before-the-storm budgeting. There is $93 million left of unallocated ARPA funding that could plug budget holes. Johnson and Kovac wanted to introduce a slight cut already in 2023, but the council pushed back.

The problem will get worse without intervention. “We do expect future gaps will be even larger,” said Kovac. That includes the pension payment growing by an average of $7 million annually over the next five years.

There is also the question of how much the public safety unions are doing to help at the state level. They were exempted from Act 10 by Republicans because of their political clout, but the ever-growing labor costs are now a significant part of Milwaukee’s fiscal woes.

“I know you are all doing a great job behind the scenes,” said Borkowski to those in the audience.

“I don’t know that at all,” said Bauman. “I am not sure we are getting unqualified support from our unions.”

“That’s a cheap shot,” said Borkowski.

“No, it’s not a cheap shot,” said Bauman. He said the groups are believed to be requesting “poison pills” to require certain staffing levels or public safety spending.

“I think it’s premature,” said Council President José G. Pérez of praising the unions.

For more on the city’s fiscal issue and potential solutions, see our 2021 piece “12 Options To Solve Milwaukee’s Fiscal Crisis.”