MILWAUKEE — As Wisconsin sits on the largest budget surplus in state history, Milwaukee leaders say the city is approaching a dire fiscal cliff.
City and county leaders are doubling down on efforts to convince the Republican-controlled legislature to increase shared revenue to municipalities for the first time in two decades. On Friday, Assembly Speaker Robin Vos casted doubt on that happening anytime soon.
"Revenue without reform is (dead on arrival)," Speaker Vos said.
Milwaukee Mayor Cavalier Johnson says if the city’s looming budget crisis isn’t solved, catastrophic cuts could be inevitable to critical services.
"We've got a huge, spiking pension contribution that we've got to deal with,” he said. “14 years ago, the City of Milwaukee had to contribute zero dollars towards our pension obligation. Now, we're in a position where every year the number continues to go up."
The latest estimates show the city’s annual pension contribution is set to more than double in the next year, from $71 million to $145 million.
A report from Milwaukee’s Pension Task Force suggests that if the city is unable to gain additional revenue to cover the increase, it will need to cut nearly a quarter of its workforce within a few years.
"We've got no shortage of challenges here in the city, I mean, we for the past several years have been closing a number of fire stations, fire department apparatuses. We don't want to see that happen,” Mayor Johnson said.
Mayor Johnson says the biggest problem the city faces in balancing its budget in future years is stagnant shared revenue coming from the state. For context, Mayor Johnson says back in 2000, shared revenue used to cover the city’s entire police and fire department budgets while leaving tens of millions left over.
"Now, shared revenue does not even cover the cost of police, it covers less than 80 percent of the entirety of the cost of the police department budget which is about $300 million,” he said.
Mayor Johnson believes the answer is getting the state to increase shared revenue to municipalities across the state, while also letting Milwaukee County voters decide on a 1 percent sales tax increase. A third of the revenue would go to the city, a third would go to the county and a third would reduce property taxes.
During a moderated policy forum to preview the upcoming Wisconsin legislative session, Republican Assembly Speaker Robin Vos signaled his party isn't ready to offer additional financial resources to the state's largest city.
"I am very leery of just saying, ‘here's another $100 million, keep doing what you're doing,'” Speaker Vos said. “I need to see specific ideas from the City of Milwaukee as to reforms that are real, meaningful, and long-term, not just one-time gimmicks that allow them to get through this challenge."
Speaker Vos says Republican lawmakers need concrete plans from Milwaukee leaders on how they will reform the city’s finances. He believes one potential solution is for Milwaukee to move its employees from the city’s pension program to the state’s retirement system.
Mayor Johnson says he’s open to exploring that idea for future employees.
"The City of Milwaukee and Milwaukee County are the only governmental jurisdictions in the state of Wisconsin, my understanding that are not in the state system and so if there's an opportunity for us to have conversations about making a transition for future employees to soft close our current pension system and shift future hires into that system and that creates some savings for us, then that's a conversation that I'm willing to have,” he said.
