County Plans to Slash Budget in 2026

Milwaukee County Courthouse. Photo by Graham Kilmer.

Milwaukee County is planning major spending cuts for the first time in years in the face of a $46.7 million budget deficit next year.

Officials from the Office of Performance, Strategy and Budget outlined plans to close the budget gap for supervisors last week, which included cutting raises for county employees and across-the-board departmental spending cuts.

In March, the Office of the Comptroller unveiled a new fiscal projection showing budget deficits would return in a big way in 2026. The county has had a long-standing structural deficit, with the cost to operate the government exceeding what it takes in for revenue.

County budget officials believe the $46.7 million gap in 2026 can be narrowed significantly by targeting salary increases and spending cuts for all departments. Cutting salary increases in 2026 could save the county approximately $27 million and spending targets issued to departments amount to a $10 million cut countywide, said Joe Lamers, director of the office of Strategy, Performance and Budget (SBP), during a May 15 meeting of the board’s Committee on Finance.

“So to close the gap, we need a combination of decreasing expenditures and also looking for areas to increase revenues,” said Daniel Laurila, SBP operating budget director. 

Sales tax returns have showed significant growth in recent months, and if the trend continues it should help the close the 2026 gap even further, Laurila said.

Milwaukee County Transit System (MCTS) funding will likely become a budget consideration for supervisors sooner than later. Lamers suggested that board members begin considering the impact of the looming transit funding cliff, when federal stimulus funds run out in 2028 and the system faces a $17.8 million budget deficit. Instead of waiting for the cliff, the county could begin reducing funding now and moving it into areas where the county government needs one-time funding, the budget director said.

For roughly the past five years, the whole of county government has managed to avoid major budget cuts thanks to federal stimulus funding released during the COVID-19 pandemic. The passage of Wisconsin Act 12 gave the county authority for a new 0.4% sales tax. It was implemented in 2024 and provided the county with a brief, but historic, budget surplus, as funds originally intended for pension costs were freed up by the new sales tax revenue.

County Executive David Crowley, who worked to secure the sales tax authority for the county, has started focusing his messaging on securing additional funding from the state for the services the county is mandated by state law to provide. Most of what the county does is required by state law, but some of the requirements are unique to Milwaukee compared to other counties, like patrolling the state freeways running through the county. The 2025 budget includes approximately $14 million for freeway patrol. The state is only providing $1.02 million in support.

As the state continues working through the biennial budget process for state government, county officials are watching closely and lobbying at the Capitol. The Republican-controlled state Legislature has already stripped most of the provisions Gov. Tony Evers added in his proposed budget released earlier this year.

Current Year Budget Stabilizes

As 2025 got underway, early projections showed the county would overspend its budget for the year.

This was due, in large part, to poor sales tax returns and projected overtime deficits in the Milwaukee County Sheriff‘s Office and the Community Reintegration Center. As Urban Milwaukee previously reported, the projection for both has been improving.

If the current rate of consumer spending continues, the county will finish 2025 with more sales tax revenue than it initially planned for, said CJ Pahl financial services manager for the comptroller.

“It’s encouraging that the fiscal forecast report from the Office of the Comptroller projects a modest surplus for 2025,” Crowley said in a statement. “While challenges remain and there’s more work to do, we will continue identifying creative solutions to pass a balanced budget and maintain services for Milwaukee County residents and families.”