At Year End County Narrowly Avoids Budget Deficit

Milwaukee County Courthouse. Photo by Graham Kilmer.

Quick action by county officials at the end of the summer has proven to save the county from a budget deficit.

Milwaukee County government will likely finish 2024 with a surplus between $5 and $10 million, according to CJ Pahl, Financial Services Manager in the Office of the Comptroller, who shared the information with the board’s Committee on Finance on Dec. 12.

Only a few months ago, county policymakers rushed to shave spending from departments across the government to avoid a budget deficit that was projected to go as high as $19 million by the end of the year. That action, and additional savings achieved since then, leave the county on track to end the year in a favorable budget position.

Notably, the county’s Department of Health and Human Services (DHHS) is projecting to save millions thanks to new revenues, as well as savings generated by a low population of youth being held in state prisons. The state charges a fee for youth incarceration.

The county’s budget woes this year began in spring, when the Milwaukee County Sheriff‘s Office (MCSO) and the Community Reintegration Center (CRC) were projecting they would significantly exceed their overtime budgets. Then, by mid-summer, sales tax collections began to spell trouble for the county, coming in significantly lower than policymakers had budgeted.

The new favorable budget position has now allowed policymakers to put funds away for future debt payments, and, potentially to avoid budget gaps next year.

During the 2025 budget process, Sup. Shawn Rolland secured an amendment providing $500,000 for the county’s flexible housing pool, which leases apartments around Milwaukee allowing housing officials to quickly house people in crisis. Rolland was motivated by the state’s closure of park and rides and the clearing of homeless encampments there.

But Rolland pulled the funding from a pool used to pay the state for youth corrections charges. And the state is considering significantly raising the rates next year. If the state raises the fee, DHHS could quickly find itself with a deficit in the Division of Children, Youth and Family Services.

At the time, Rolland suggested the department’s year-end surplus could be tapped to offset any increased corrections charges next year, and, now, that surplus is on firmer footing going into the end of the year.