Corrections Driving County Budget Into Deficit

Milwaukee County Jail. Photo by Jeramey Jannene.

When Milwaukee County officials assembled the projected budget for 2024 late last year, they were expecting the county’s first budget surplus in decades. Now, it’s five months into the year and the county is facing a $6.4 million projected budget deficit being driven by higher costs for the Milwaukee County Sheriff‘s Office (MCSO) and the Community Reintegration Center (CRC). Meanwhile the revenue projected to come from the sales tax looks lower than expected.

“It does seem like 2024, financially, may punch us in the face,” said Sup. Shawn Rolland during a meeting of the county board’s Finance Committee Thursday.

The MCSO is predicting a $5.5 million deficit and the CRC a $4 million deficit. That $9.4 million deficit is offset by $3 million in projected savings from other county departments. The deficit in the sheriff’s office is being driven by overtime costs. The CRC deficit is being driven by increased costs for food service, overtime, increased pay for corrections officers and less funding from the state.

Sales tax collections during the first two months of the year are also a great source of concern. As of Jan 1 this year, the new 0.4% hike in the county sales tax went into effect, and the county budgeted for approximately $189 million in sales tax revenue this year. But sales tax revenue so far has been 12.5% less in January and and 21.4% less in February than projected last year; if the downward trend continues the county could face a revenue gap between $23 and $40 million for the year.

However, sales tax data from the state lags by a few months and with only two months of data it is too early to make projections for the full year, said CJ Pahl, Financial Services Manager in the Office of the Cmptroller. Tax collections could still rebound, but are “looking rather grim right now,” Pahl said.

In recent years, the county has variously implemented hiring freezes and struggled to staff open positions. This has led to savings in payroll and healthcare costs. During the past two years, the county had year-end surpluses that added up to approximately $50 million, said Joe Lamers, Director of the Office of Performance, Strategy and Budget. “And a large portion of that surplus was because we weren’t able to hire staff.”

Those days are over.

Though, that surplus funding will provide the county with a bit of a cushion as it attempts to reconcile funding challenges in the coming years. “So if we look at it over a multi-year period, it’s sort of evening out to some extent,” Lamers said.

Sheriff’s Office

The county board increased minimum hourly pay for corrections officers from $26 to $30 in 2024. The goal was to bolster recruitment and shore up existing staffing. The jail, in particular, has struggled for many years with short staffing.

The MCSO is still relying heavily on overtime to maintain staffing levels in the jail, Chief Deputy Daniel Hughes told supervisors. The office has managed to boost its numbers at the facility. It now has approximately 200 correctional officers, Hughes said, with approximately 230 positions funded.

“We have been down so many people for so long,” Hughes said. “We have all kinds of operational trainings that are not happening that have to happen in order to get us back up and running.”

The sheriff’s office was hiring people quickly and moving them through a shortened training period to address the staffing shortages, he said. Now, the department is rotating them back through training classes to ensure all staff meet the requirements for the Law Enforcement Standards Board (LESB) certification, he said. When these staff are rotated back to the academy for additional training, they’re replaced with overtime.

The MCSO is staffed to fill any temporary vacancy — training, illness, vacation, FMLA — with overtime, Hughes said. “So all of the relief factor is accomplished through the overtime.”

Supervisors sought the increased pay for corrections officers during the budget process, in part, to reduce the agencies reliance on overtime. That’s not occurring yet. The pay increase for corrections officers is also increasing the cost per-hour of overtime.

And it’s not just the overtime costs for the jail. Overtime for deputy sheriff’s, who also received a pay increase, is pushing the agency’s deficit up.

In 2023, and continuing in 2024, the overtime budget for the MCSO was cut by approximately 60%. In 2022, the MCSO had an overtime budget of approximately $10.4 million. In 2024 the budget is $4.5 million.

Pat Caravetta, MCSO fiscal administrator, told supervisors the overtime costs for corrections officers should go down by the end of the year.

But offsetting that encouraging financial trend, the Milwaukee Deputy Sheriff’s Association recently negotiated a 3% pay increase for deputies, including a 5.5% increase for deputies at the top step of the wage scale. The Finance Committee approved the contract at its meeting Thursday.

Community Reintegration Center

The comptroller’s office is projecting a $4 million deficit for the CRC, with 50% of the budget gap being driven by rising food service costs.

The CRC is switching from one food service provider to another this year and is encountering higher food costs as a result, a spokesperson for the CRC told Urban Milwaukee. The food service contract for all the county’s correctional facilities is housed within the CRC budget. In 2023, the county board approved a new vendor, Florida-based Trinity Services Group to replace Aramark Correctional Services, a subsidiary of Aramark Corporation.

The CRC is also projecting a $1 million deficit in its overtime budget. Like the sheriff’s office, the CRC has been rotating staff out for full LESB training. It has also opened more dormitories as its population has increased, according to the CRC. The facility also has fewer people sanctioned there by the state Department of Corrections, which means it is receiving less funding from the state.