From BizTimes.com
Posted: January 27, 2010

The Milwaukee County government is on an unsustainable path of budget deficits and “crumbling finances,” according to a new report released today by the Greater Milwaukee Committee (GMC) and the Public Policy Forum.

According to the executive summary of the report, “The county’s structural deficit - defined as the gap between expenditure needs and anticipated revenues - is projected to grow from $48 million in 2011 to more than $106 million by 2014.”

The report about the county’s financial outlook was titled, “Should it stay or should it go?”

The executive summary states, “Milwaukee County government faces immediate and substantial fiscal and programmatic challenges. A combination of stagnant state and local revenues, skyrocketing pension and health care obligations, and several successive years of severe budgetary stress have left it weakened in virtually all areas. Meanwhile, as its fiscal pressures worsen and its service levels erode, it operates with no long-range plan for digging its way out.”

“The findings of the report indicate the county is on an unsustainable downward financial path,” said Julia Taylor, president of the GMC. “We need time to fully digest the report and its findings to determine the best solutions, but we hope the release of the report creates a sense of urgency that we need to address the problem and seek solutions now.”

The executive summary of the report states, “The urgency of this matter cannot be overstated.”

Despite several successive years of significant expenditure and staff reductions and anticipation of significant wage and benefit concessions in 2010, “This projection is the clearest indication yet that the county’s finances are crumbling and that valued services in areas like parks, transit, mental health and public safety face severe degradation without prompt and concerted action,” the report stated.

“We will work to structure a collaborative initiative as we pursue recommendations that will achieve real and sustainable results,” said Sheldon Lubar, chairman of Lubar & Co. and chair of the GMC’s County Task Force. “I hope the entire community will work together to resolve these issues to preserve the future of Milwaukee County and give our children and their children the opportunity to thrive here.”

Lubar previously called for consideration of eliminating the county government.

Transferring functions such as parks and transit to special districts with a dedicated funding source would enhance funding stability but also would produce new government bodies with their own funding demands, the report said.

The executive summary concludes, “Whether to embark on a lengthy process to streamline and potentially eliminate Milwaukee County government cannot be determined conclusively by research and fiscal analysis alone; that determination also requires value judgments as to the importance of various county services as well as to the leadership abilities of current and future county leaders. In the end, there are no silver bullets that will magically solve the financial problems facing Milwaukee County government and relieve taxpayers from obligations already incurred. The depth of those problems and obligations, however, does create an imperative to consider how government structure influences fiscal health and impacts fiscal management and decision-making.”

To view the complete report, visit http://www.GMCOnline.org.

Milwaukee County Board Chairman Lee Holloway released the following statement in response to the report: “…The report issued by the Public Policy Forum underscores the important role Milwaukee County government plays in our community. These findings show that we need to closely examine all options, and this report has stimulated my interest in going further. It’s time for all elected officials to find the courage to step up and consider consolidating functions at the local level. This is the only route to achieve true economies of scale. For example, a number of municipal health departments within Milwaukee County are actually operated by individual municipalities, while the 71 other counties in Wisconsin save taxpayer dollars by having one central health department to serve all municipalities in the County. This unique duplication within Milwaukee County could easily be eliminated. As this report examines, a number of successful metropolitan governments, including Indianapolis and Louisville, have eliminated smaller municipalities in favor of one metropolitan umbrella. Currently, Milwaukee County is the largest overlying government in southeast Wisconsin. If communities are interested in saving tax dollars, they may want to consider the delicate process of consolidating service at the local municipal level. It just makes good sense if you want to achieve true reform and real savings.”