Milwaukee's property woes go directly to Walker

In recent weeks, Wisconsin cities, villages and towns have been releasing their property assessment figures, and most of the news hasn't been good if you're looking to sell your house. Milwaukee area home values tanked in 2011, with the average home assessment down over 13% in the City and median home sales prices also down 7.2% in Ozaukee County and 5.6% in Waukesha County. In the City of Madison, the average home value went down more than 3 percent, and median home sales prices were down 6.4% statewide.

Well why did this happen? The first obvious answer is Scott Walker's budget and Act 10 measures helped lead to Wisconsin having the most job losses in the U.S. by far. Certainly that plays a big role, but there are other reasons as well, particularly when you look at Milwaukee's situation.

Walker's budget singled out the City of Milwaukee for damage. Walker cut state shared revenue to the City of Milwaukee by more than $10.3 million in 2011, and cut street aids to Milwaukee by over $2.5 million. Walker also cut $6.8 million out of the Milwaukee County Transit System, and then reduced the ability to offset these cuts by limiting the ability of the City to raise that revenue with strict limits on property taxes (only allowing increases in tax levies if a community did sprawl-related new construction- a hard task in a city where most parcels are already developed). Remember, the City of Milwaukee by law cannot raise a sales tax or income tax, meaning it has to turn to state aids and property taxes as two of its main source of revenues, so Walker was intentionally harming the city with these moves.

Walker then compounded those cuts further by exempting the largest group of Milwaukee City employees from having to be subject to Act 10 concession - police and fire department employees. In addition to this being a politically-motivated decision based entirely on those groups endorsing Walker in the 2010 Governor's race against Tom Barrett, it also negated Walker's claim that using Act 10's "tools" would make up for these cuts in shared revenue. As Barrett accurately pointed out in as Act 10 was being debated Act 10 "pits general City of Milwaukee employees against the police and fire unions," because it was the general employees that would have to shoulder ALL cuts if police and fire were not paying their share of the sacrifice. And Barrett was proven correct that it was a major Act 10 flaw, as the judge that struck down part of the law last month said:

The fact that none of the public employee unions falling into the general category endorsed Walker in the 2010 election and that all of the unions that endorsed Walker fall within the public safety category certainly suggests that unions representing general employees have different viewpoints than those of the unions representing public safety employees. Moreover, Supreme Court jurisprudence and the evidence of record strongly suggests that the exemption of those unions from Act 10’s prohibition on automatic dues deductions enhances the ability of unions representing public safety employees to continue to support this Governor and his party.

So Walker's policies tied the hands of Mayor Barrett in trying to deal these cuts, but it wasn't just city services that were put on the chopping block by Walker's budget. Milwaukee Public Schools were cut by $47 million for this school year, and only $8.5 million was restored to MPS for next year. Not surprisingly, MPS can't keep up services for its 79,000+ students with that kind of a cut, and they recently announced plans to shutter 6 buildings and cut 400 positions overall, including 234 teaching positions. MPS' budget is independent of the City of Milwaukee's, which made the Walker's campaigns attempts to blame Barrett for MPS' closings all the more ridiculous, as Barrett couldn't do anything about it if he wanted to. It also shows that Walker is unfit for office if he doesn't understand this difference, or that his campaign cynically thinks the voters are too stupid to know the difference. Either is a recallable offense in itself.

Barrett points out in the Journal-Sentinel article on declining home values that the City of Milwaukee continues to have large numbers of foreclosures, and City Assessor Mary Reavey, Alderman Michael Murphy and Greater Milwaukee Realtors head Mike Ruzicka concur.

Ruzicka, Reavey and Ald. Michael Murphy, chairman of the Common Council's Finance & Personnel Committee, agreed with Barrett about the impact of foreclosures on residential values.

As of February, banks owned 1,634 foreclosed properties, the city owned another 727, and 6,066 more were in the foreclosure process, city figures show.

"People don't realize the foreclosure crisis is not just a one-time event," Murphy said. "It continues to drag on."

And not surprisingly, foreclosures lead to the values of occupied homes to drop, because the competition for similar homes comes cheaper (sorry, Rick Santelli, it's true). So an obvious answer to boost up property values is to reduce the amount of foreclosures by giving aid to people to keep them in their homes, if possible.

Except that Walker and Attorney General J-B Van Hollen made that a lot tougher a couple of months ago when they stole $25 million intended to go to foreclosure mitigation, and instead used it to reduce the Walker-induced budget deficit. So with nothing to stop the run on foreclosures, property values continued to drop in Milwaukee.

Between the cuts to schools, city aids, transit and foreclosure aid, Scott Walker has chosen to remove tens of millions of dollars from the City of Milwaukee's economy that could have helped turn things around in the state's largest economic engine. And despite what Walker's campaign tries to say, there was very few options Tom Barrett had that could limit the damage in the face of these moves - in fact, I'd argue that Barrett deserves credit for limiting property tax increases and keeping services afloat in the last 2 years in the face of these headwinds. Keep it in mind when you start seeing ads complaining about Tom Barrett's record in Milwaukee, and trying to pawn off the city's dropping property values onto Barrett instead of the true culprit in the decline- Scott Walker's anti-Milwaukee policies.

And it's not just in Milwaukee where people are seeing the damage, as all throughout our state, property values are falling and tax rates rising as a result of the pro-corporate, anti-services Age of Fitzwalkerstan. Somehow, I'm thinking most people don't appreciate that the $20 they may have saved in property taxes also came with a drop of thousands of dollars in their home. And unless you step up on June 5, that cycle of lower home values and lower jobs is not going to break.