(The Center Square) – Milwaukee is being praised for its latest city budget, but there are warnings in a new report from the Wisconsin Policy Forum is out with a new breakdown of the city’s proposed $2 billion 2025 plan.
“As the 2025 budget picture came into clearer focus, two important realizations emerged. First, it became apparent that several steps prudently taken in the 2024 budget to prepare for 2025 challenges would work as planned. In addition, it turned out (at least for now) that Act 12 not only would provide a one-year solution to the city’s immediate fiscal cliff, but also would pave the way for sufficient annual revenue growth to offset some of the city’s ongoing expenditure pressures,” the Policy Forum wrote in its report.
Milwaukee Mayor Cavalier Johnson proposed his new spending plan at the end of September.
He billed the new spending plan as an honest proposal that doesn’t shrink from Milwaukee’s challenges.
“I’m that focused in and concerned about what the impact is on individuals in our city, but it’s important for us to make sure that we’re not kicking the can down the road, that we’re doing the right thing to make sure that we can have a government that is functioning properly with the resources necessary,” Johnson told the city council when he introduced the plan.
Milwaukee’s proposed budget includes both a 2 percent property tax increase, and a price increase for several city fees.
Those increases come on top of the new Milwaukee city sales tax that Johnson backed at the beginning of this year and millions of new dollars from the state of Wisconsin in shared revenue money.
It is those extra shared revenue dollars, and the other money that came from the shared revenue deal, that the Policy Forum says benefitted Milwaukee in the current budget, and in its proposed budget.
“The budget also projects a state shared revenue increase of $4.9 million to $246.2 million and beginning in 2025 the city will receive reimbursement from the state for its decision to eliminate taxes on personal property, a payment that is projected at $4.8 million next year. Combined, the impact of state shared revenue growth, local sales tax growth, and the movement of $23.6 million in sales tax revenues out of employee retirement and into the [general city purpose] budget will provide $33.3 million in new revenue for core city services. This accounts for more than the entire growth in the [general city purpose] budget,” the Policy Forum wrote.
But there’s also a warning.
The Policy Forum report notes that some of the one-time maneuvers used to balance Milwaukee’s current budget likely won’t be available going forward. Plus there’s uncertainty about the national economy, and the report is quick to say that costs will continue to rise.
“When we look beyond next year, a more foreboding picture emerges. Both future sales tax and shared revenue increases will be dependent on the national economy, and on that front growth has slowed. Health care savings – which were instrumental in building reserve capacity and balancing the 2025 budget – likely will be short-lived,” the report notes. “Meanwhile, increases in Act 12-related costs appear inevitable as the city responds to its mandate to increase police and fire staffing levels and as ongoing labor negotiations with the Milwaukee police and fire unions are resolved.”
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