County Prepares for Another Brutal Year of Budget Cuts

Milwaukee County Courthouse. Photo by Graham Kilmer.

Milwaukee County officials are again preparing for a year of deep budget cuts.

The county is entering the 2027 budget cycle with a projected $50.8 million budget gap, largely a result of state aid failing to keep pace with inflation for more than a decade. The gap represents the county’s structural deficit, the annual difference between how much it would cost to maintain the previous year’s services and how much the county has to spend.

Last year, county policymakers had to close an approximately $46 million gap. Little has changed for the county fiscally between then and now. The primary strategy left to policymakers remains the same: spending cuts and property tax increases. The county is currently projecting a $12 million increase in the property tax levy in 2026, most of which will go toward paying back the debt incurred for funding of the new Center for Forensic Science and Protective Medicine and the Nature & Culture Museum of Wisconsin.

Leading up to the 2026 budget process, Milwaukee County Executive David Crowley issued across-the-board spending reduction targets for department heads totaling $10 million. County departments will have to make do with even less again in 2027. On top of not receiving an inflationary funding increase, the administration has asked department heads to reduce spending by a total of $10 million across the county, said Daniel Laurila, county operating budget director, during a recent meeting of the Milwaukee County Board’s Committee on Finance.

“This is not ideal, but it’s a way to get us closer to the requirements of the balanced budget,” Laurila said.

In 2024, the county was buoyed by an infusion of funding from the new 0.4% sales tax, which was secured through state legislation that created a pathway to close the county’s pension plan and also created a new stream of revenue — the sales tax — to pay down the county’s pension costs. By 2025, however, all of the new sales tax revenue was being consumed by the county’s pension obligations, a legacy of a disastrous pension deal two decades ago that created the infamous pension sweetener known as the backdrop. Some retirees have collected million-dollar payments, and the total cost of backdrops has topped $415 million.

Over the past decade, the physical footprint of the county has been reduced and the public workforce has shrunk, Laurila said. Departments have been consolidated, retiree health care adjusted and salaries constrained, all to limit the county’s spending. But it’s not enough to overcome the structural funding imbalance, and there are fewer fixes available, as Urban Milwaukee has reported previously.

The Milwaukee County Transit System (MCTS), which cut service by $9.3 million in 2026, accounts for nearly one-third of the county’s structural deficit next year — an estimated $16 million. MCTS, under President and CEO Steve Fuentes, is proposing a 25% service cut in 2027 to stabilize service at a budget level that can be maintained without additional revenue. At the same time, the system is planning to redesign the bus network.

A recent report by the Milwaukee County Department of Transportation (MCDOT) shows the county could increase the local vehicle registration fee to close the transit funding gap in the short term.

Crowley’s administration is also pushing forward plans for a new $858 million criminal courthouse. The administration is proposing to borrow for the massive project, the largest in the county’s history, which will require larger property tax increases to pay down the county’s debt in the future.

County officials frequently return to the lack of state funding when discussing the courthouse project, the transit system budget or the general county budget. If shared revenue, transit aid and property tax increases had kept pace with inflation for the past 26 years, the county would have an additional $146 million in revenue next year, Laurila said.

“There are many reasons why this is our budget reality, but a large one is that revenues have not kept pace with inflation,” he said.