Proposed city budget uses health care savings to maintain service levels and minimize taxpayer impacts
But revenue challenges continue to threaten long-term outlook
Citing the theme of the movie “Groundhog Day,” the Public Policy Forum’s review of the 2016 City of Milwaukee proposed budget finds that the budget again avoids cuts to key services and limits increases in local revenues, but warns that the beneficial fiscal circumstances that have eased pressure on the City’s finances in recent years may be running their course.
“The budget again avoids cuts to key services by reaping the continued benefits of earlier health care changes and squeezing additional savings from pension and risk management plans,” says the report. “As in previous years, we commend City leaders for their efforts to manage the budget in this responsible fashion. Yet, once again, we also question whether this familiar set of circumstances is sustainable.”
The report cites efforts to mitigate the impacts of foreclosed properties, secure training for the chronically unemployed, and maintain appropriate police staffing levels as key priorities in the 2016 proposed budget. It notes that most other City functions and departments are funded at “cost to continue” levels that “do not necessarily afford the opportunity for new programs and services, but that spare them from the personnel reductions and reduced service levels that were required in the immediate aftermath of the recession.”
The budget also holds the property tax levy at the 2015 amount and proposes modest increases in fees, instead relying on health care savings generated from plan design changes in previous years and transfers from the City’s healthy reserves to offset another year of flat revenue from the State’s shared revenue program.
“Health care savings and other annual benefit adjustments have become a necessity for the City as it continues to fight its way through a gauntlet of limited revenue sources,” says the report. “Whether City leaders can continue to generate annual savings in benefits and salaries after 2016 may be the key determinant as to whether the last few years of relative budget calm continue; or whether, instead, the City reverts back to the days of substantial workforce downsizing and the need to pit adequate funding for public safety versus cuts in other important functions.”
The report also provides analysis of the proposed budget for the Milwaukee Police Department (MPD), which maintains a sworn strength level of 1,880 officers and eliminates three furlough days. The report compares Milwaukee’s police expenditures and staffing with four comparable cities that also have experienced rising numbers of homicides, and finds that Milwaukee spends more on per capita than all but one and has more officers per capita than two of the four peers.
“Overall, the 2016 proposed budget again sustains service levels and allocates revenues in a fiscally responsible manner,” concludes the report. “Yet…we would repeat our caution from last year’s budget brief that this laudable effort ‘should not mask the underlying structural issues that continue to inhibit investment in new programs and infrastructure, and that will continue to pose serious challenges until they are resolved.’
The budget brief can be downloaded from the Forum’s website: www.publicpolicyforum.org. An analysis of the 2016 Milwaukee County budget will be released later this week.
Milwaukee-based Public Policy Forum, established in 1913 as a local government watchdog, is a nonpartisan, nonprofit organization dedicated to enhancing the effectiveness of government and the development of southeastern Wisconsin through objective research of public policy issues.
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