When WisGOPs defund and handcuff Milwaukee, the city has to defund other things

It's not a surprise, but today we got the details on a rough budget for Milwaukee in 2023.

Milwaukee Mayor Cavalier Johnson's first proposed city budget is the equivalent of a big wince, calling for cuts that he acknowledged he doesn't want to make in police, fire and library services.

The 2023 proposed budget, released Monday, calls for a 1% reduction in sworn police officers, the elimination of two fire engines, and substantial cuts in the hours and programming at five of the city's 12 neighborhood libraries.

"It's not that we don't want to fund them. It's that we don't have the resources to fund them or the resources to generate the revenue ourselves to fund them," Johnson told the Journal Sentinel.

If you read the city’s proposed budget summary, Mayor Johnson, Budget Director Nik Kovac, and other city staff lay out the crunch in painstaking detail. One of the reasons the city lacks resources is that they get less money from the state now than it did in 2022. And that's before you include 22 years of inflation.

Combined with the limits on property tax that are imposed by state lawmakers, and city officials could not hide their resentment at their fiscal relationship with the state.

This Shared Revenue could be more accurately described as “Redistributed Revenue” because it is generated by the sales, income, and excise taxes paid by Milwaukee residents, workers, and visitors. The total amount of money that Milwaukee taxpayers contribute to Shared Revenue exceeds the amount of money that the state “shares” back.

Shared Revenue was once the city’s largest source of revenue but has been outpaced since 2009 by the property tax levy – a source of funding which has roughly kept up with the real value of money, i.e., inflation, over the past two decades.

The cost of our largest department, the Police Department, now exceeds our Shared Revenue by $78 million, nearly the reverse position of these two accounts in 2000.

The second constraint on Milwaukee's budget is the increased amount of money that has to be put into the pension fund for city employees. This is a cost that the city didn't have to pay for up until The Great Recession, but the combination of more retirees and the 2008 stock market crash means that the free ride is over, with the costs going up every year.

Another expense – the employer pension contribution – emerged in 2010 to soon become the second biggest driver of our structural budget gap. This obligation was entirely absorbed by fund investment returns in the prior decades, but became an extremely volatile line item in our general city budget for several years until we implemented a stable five-year contribution formula in 2013. The stabilized annual cost was $62 million until 2017, and then $71 million from 2018-2022.

Our current expectation is that this cost will be at least $100 million in 2023, and could even exceed $120 million. The exact amount will not be known until the Pension Board finalizes its actuarial and investment assumptions early next year, and this contribution will not be due until January 2024. This higher pension contribution amount is required to be made each year until the 2027 payment is due in January 2028.

The city is still able to utilize funds from the American Rescue Plan Act (ARPA), signed by President Biden in 2021. And this year's ARPA budget allocation of $75 million to make up for "revenue loss" goes entirely to the city’s fire department, or else the reductions to fire fighter jobs and engines could be even higher. ARPA will pay for the majority of the Milwaukee FD’s expenses in 2023, and funds nearly 60% of the city’s fire fighting positions. Of course, you have to find a place to pay for those funds in 2024, and that puts a squeeze on those jobs and/or other services going forward.

Along those lines, ARPA is paying for 97.5 positions in the police department, and those jobs now have top be put back onto city funding, meaning that the Milwaukee PD’s city-funded budget is slated to go up by $20 million next year. While there are 17 fewer cops, there actually will be more people working for the Milwaukee PD due to 43 dispatchers being added to bring that part of law enforcement up to standard, and additional forensic investigators and crime analysts.

This is where I remind you that the city cannot use the "tools" of Act 10 to change the pension agreement with police and fire fighters, as payback for their unions supporting Governor Walker and other WisGOPs in 2010.

Now there is one type of payment to Milwaukee that hasn't been cut by the GOP Legislature in recent years, and that's voucher payments to allow K-12 students in the city to attend private schools.

Total payments to voucher schools under the Milwaukee voucher program have risen more than 50% since 2013 - $244.4 million this year vs $161.1 million in 2013. Funny how those funds get adjusted for inflation and costs among WisGOPs, and how the voucher schools aren't subject to limits on other fees and funding.

Those WisGOPs sure don't allow the city of Milwaukee's public schools or its government to have that kind of help and fiscal freedom. And without changes in state law to allow the city to have a sales tax, increased shared revenues, or more flexibility in dealing with police and fire fighters to reduce the pension costs that continue to grow, it will get worse when ARPA funds dry up after next year.

If WisGOPs gave a damn about improving conditions in the state's largest city, tourist destination and economic engine, they'd GET OUT OF THE WAY and allow the city the optiuons and resources to do what needs to be done. But then they wouldn't be able to beat up on majority-minority Milwaukee to outstate and suburban rubes, and misdirect these scared fools from asking real questions about why the WisGOPs aren't doing a thing to improve the rest of the state either.