Report Says Bad Times Just Beginning For Milwaukee County

Milwaukee County Courthouse. Photo by Graham Kilmer.

Financially speaking, the good times are over for Milwaukee County, and the bad times have really only just begun, according to a new report from the Wisconsin Policy Forum.

Milwaukee County Executive David Crowley‘s administration has managed to close a roughly $47 million budget deficit projected by the Milwaukee County Comptroller earlier this year. But the budgetary moves used to close the deficit won’t work forever, and service cuts will likely get worse in future budgets.

To balance the $1.3 billion budget, the county is planning the largest property tax hike in two decades, and a sizable $9.8 million withdrawal from a reserve account set up to pay the county’s debts, which are also expected to increase in the coming years. Lower state charges, increased revenue from the state, tamping down on salary increases and growing sales tax collections are also helping to close the gap.

WPF agrees with Crowley that the county’s budget would be far worse were it not for policy wins at the state level. Notably, the administration’s successful lobbying for 2023 Wisconsin Act 12, which provided an additional 0.4% sales tax and a pathway to closing out the county’s troubled pension system.

However, for WPF, the 2026 budget signals that the county’s fundamental financial challenges remain, and that “service reductions may need to extend to other county departments in future years.”

For now, the major service reductions are concentrated within the Milwaukee County Transit System (MCTS) and Behavioral Health Services (BHS), a division of the Department of Health and Human Services (DHHS). MCTS is particularly hard hit. The system is planning a 15% cut in service and elimination of six routes.

The Milwaukee County Sheriff‘s Office (MCSO) and the Community Reintegration Center (CRC) both received additional funding for overtime. But both agencies regularly exceed their overtime budgets, which officials say is due to chronic understaffing. The $3.6 million for the MCSO is well short of the $8.6 million overtime deficit the agency us projecting this year, WPF noted.

Despite the financial hurdle of a large budget deficit, the county does manage to fund a handful of major capital projects, including a new $13 million entranceway for the Milwaukee County Zoo and a $5 million installment for rehabilitation of the Mitchell Park Domes. But the infrastructure spending is not enough to lower the backlog of $1 billion in projects needed over the next five years.

The county is also managing to keep development of a new criminal courthouse going, using $16 million in property tax funding freed up by new revenue from the state for MCSO expressway patrol. Still, the WPF regards the project as a “huge fiscal challenge” for the county.

“While critical to the county’s ability to provide safe and efficient public safety services, the cost will be prohibitive with an estimated $458.4 million required to finance the project from 2026 through 2032,” WPF reported, adding that the project will drive up the county’s borrowing costs, which are already going up for the new Nature & Culture Museum of Wisconsin and the Forensic Science Center.

WPF’s analysis of the 2026 budget yielded four main takeaways. First, the long-discussed fiscal cliff in transit is here. Federal stimulus funding has run out, pre-pandemic ridership has not returned and service is being cut and likely not for the last time. Second, health care costs, once a source of savings, are now dragging down the county budget. Third, property taxes are rising and policymakers will need to consider their impact on affordability. Fourth, core services — behavioral health and transit — are being cut. These areas will likely see cuts in the future, as well, but other departments won’t be spared forever, and the service cuts are likely to spread.

Things could be worse, WPF concedes. New revenues secured since the onset of the COVID-19 pandemic are easing the pain for policymakers returning to annual deficit budgeting.

“But the budget also takes only an initial step to address the transit system’s structural gap, and it fails to make a dent in the infrastructure backlog,” WPF writes. “The need to grapple with those items in future budgets while also contending with escalating debt service and continued growth in salary and benefit costs suggests that next year may only be the first of several successive years of increasingly painful budgets.”

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