Color by numbers

[Originally posted on Medium]

We’re introducing the recommended 2019 Milwaukee County budget today. I want to paint a picture for you about what this whole process is like, and the closest metaphor I’ve got is a color-by-numbers piece.

The actual budget gets more complex than this, but I liked the cow. (Image found here.)

Here’s why this is a pretty good metaphor:

  1. It involves numbers.
  2. Until you start filling everything in, it’s hard to get a full idea of what you’re looking at.
  3. You don’t have many options.

I’m incredibly proud to be a part of Milwaukee County. The range of services we provide truly creates a foundation for our community that enhances quality of life, empowers the people we serve and strengthens the 414.

Creating this year’s budget has been much more collaborative than in years past. I’ve been fortunate to have input over the past few months from several members of the County Board, as well as other elected officials and County leaders. We even partnered with several supervisors on five open-house sessions for the public. We’ve come up with a recommended budget for 2019 that does stick to our major priorities: striving for fiscal renewability, pursuing racial equity and social justice, and looking to follow and set best practices in how we deliver services.

If our budget was a color-by-numbers picture, those would be the three main elements. That’s the picture we want to paint.

But here’s the thing. This is my eighth year creating a budget for Milwaukee County, and every year we’ve started out with anywhere from a $15 million to a $50 million gap between what it would cost to continue operations and what revenue is available to us.

It’s frequently been around $20 million. This means that roughly for every $50 we need to spend, we’re a buck short. So we find a way to spend $49 instead. Then the next year, we’re another buck short, and we find a way to spend $48 … and so on.

(Try that approach at the grocery store sometime. See where it gets you.)

We’ve cut and scrimped and put off a lot of important projects. We’ve found efficiencies. We’ve done more with less, year after year. By the way, if you think Milwaukee County government is full of waste, I’d ask you to talk to our employees. They’re the ones really seeing how the shortfalls stack up, and they’re the ones helping us identify a lot of savings and innovations.

Their dedication to this community cannot be overstated, especially since both on the job and in the paycheck they’re taking home every two weeks, they’re also doing more with less.

2019 budget: What’s in it

Here’s a quick outline of what we’re looking at for the 2019 recommended budget:

  • Closing the gap: Starting in July, we had asked everyone who’d listen to take 14 minutes and help us build a better 414 by using our online budget tool to show us how they’d balance the budget. At that time, we estimated a $23.5 million gap, and the tool was there to show just how limited our options are in closing that gap. We had more than 650 submissions — and for those who took the time, they recommended a mixture of cuts to services and increases in revenue. We closed the gap in about the same way. We have proposed widening our property tax base by the value of net new construction ($1.3 million), and we asked nearly every department to decrease their budget from local taxes by 1.1 percent ($14 million).
  • The unexpected: There were a few unexpected things that helped us close the gap, too. The first was money from new state sales taxes on online purchases, thanks to a recent Supreme Court decision ($1.7 million). Another was that our projections for health-care costs turned out to be a little high, so we expect to save about $5 million from what we’d originally projected. While these unexpected changes helped us, that’s not how we prefer to balance the budget.
  • One-time options: People who are even bigger nerds about budget numbers than I am — namely, our budget office and others in their industry — have figured out an ideal level of cash reserves for government entities to have in case the unexpected happens. Milwaukee County has one (Debt Services Reserve), but it’s a bit shy of where it should be. Our Behavioral Health Division has a separate reserve because of its governing structure, and it’s actually a bit higher than it needs to be. It’s not ideal, but we’re recommending taking a bit of money from both reserves to help our operating budget this year. Like the unanticipated changes above, this isn’t how we’d ideally balance the budget, but we are incredibly limited in our options — and we chose to do this over attempting larger service cuts.
  • Racial equity training: There are not a lot of big new investments in this budget, but one of the investments we are proposing to make is one I’m extremely proud to discuss. After creating the Office on African American Affairs (OAAA) in 2016, we’ve worked to integrate that department’s leadership and counsel into everything we do as a County, especially this budget process. One thing’s been clear in this process: There is a lot, a LOT we can do cut down on structural, implicit and other biases that affect how people of color interact with County services. As part of our efforts to do a better job on this front, we’re starting by partnering with the YWCA to provide racial equity training for all County employees in 2019. I can only begin to imagine the positive ways this proposed investment will pay off for our community, and I’m excited to see us take this step toward addressing racial equity.

2019 budget: What’s not in it

  • VRF increase or paid parking at the parks: There was a lot of discussion last year over proposals to balance our budget by increasing the Vehicle Registration Fee (VRF) and adding paid parking at our County Parks. We had proposed those things because, quite honestly, we were out of options and didn’t want to keep slashing away at County services. Neither passed last year, and neither option is in this year’s recommended budget. Some of the unexpected and one-time items I talked about above helped us not have to propose either option again this year, but that 1.1 percent cut from most departments is going to affect services — including some difficult choices we made with MCTS that will affect a few hundred families in our community.
  • The investments we need: Our overall fiscal picture is a heck of a lot better now than it was when I took office seven years ago, but I’ll be the first to admit that we’re still far from where we need to be. We have about $200 million in deferred maintenance on our parks and cultural institutions. A critically needed new Safety Building is going to cost around $350 million. Our pension obligations are going to spike in the next few years. Any option for the Mitchell Park Domes is going to cost at least in the tens of millions of dollars. And by the way, we also need to be investing in our roads, our transit fleet and several other County buildings before things really fall apart. We’d love to tackle all these issues. But the money ain’t there.

This budget is a temporary fix on top of years of temporary fixes. And time’s running out on our ability to put off major reforms at the State level to give us better options, or massive and painful restructuring to how the County operates.

2019 budget: What’s next

In the next few weeks, you’ll see a lot of discussion about the budget. If you’re enough of a political junkie that you’ve paid attention in previous years, you might think this is your cue to go get the popcorn and watch the battle. I’m hopeful that, because of the effort we’ve put into collaboration across the county and outreach to the public, none of this is going to be popcorn-worthy. We’ll have some disagreements, but I think that everyone is coming to the table this year with a strong understanding of our shared priorities, constraints and goals.

Don’t get me wrong — not everyone is going to automatically give this recommended budget a big ol’ thumbs-up. It’s going to be a process, and the tough decisions we’ve made are rightfully going to be thoroughly discussed. But I’m optimistic that we’re all looking at this as a joint effort.

Beyond 2019: What else is next

By this time next year, I’m hoping that the budget I’m proposing marks the start of when we turn the tide. I’m hoping that we’re discussing how we can invest in improvements — not put more band-aids on our problems.

If we’re going to do that, though, we need some fundamental changes to how local governments in Wisconsin are funded — and we need our State leaders to get on board with a few things:

  • Fully funding our mandated services: The services we provide that the State requires — including courts, mental health, child support and many more — are only partially funded by the state. We’ve been using local tax dollars to shore it up and ensure we provide the best possible services, but it’s coming at the cost of us investing in our parks, our museums, public safety and more.
  • Giving us a fair share for driving economic development: Milwaukee County is the economic engine of the state, but when we generate more jobs and more spending, we’re not really seeing that money — the State is. They benefit from income taxes from more jobs, but the County doesn’t. They get about 90 percent of sales taxes that we generate, but the County only gets about 10. When a new business moves into the County, the State benefits from corporate income taxes, but the County doesn’t. Reformulating how we get a share of locally generated tax dollars would help us provide the services that also grow with economic development.
  • Opening up our options to control our own destiny: The reasons why you’ve seen past proposals to increase the VRF and other creative options to raise revenue is this: The state limits our ability to control our own destiny in finding additional revenue. Property taxes are capped by the state. The VRF we do have is not structured to be progressive. Sales taxes we can collect locally are capped by the state. It’s not about raising taxes — it’s about having options, and right now, we don’t.

This is a hefty conversation to have with the State, but we’ve already started engaging with some leaders — and we’ve started building a local coalition to make sure we’re all talking about the magnitude of this problem.

We’re going to need your help on this too, especially if you care about things like our parks, the Zoo, the airport, getting homeless people in our community off the street, connecting seniors to meals and care, improving racial equity, improving accessibility, safer neighborhoods, a robust bus system … or any of the thousands of other things that Milwaukee County does for our community every day.

I strongly believe we can work together. I strongly believe we can turn the tide. And I am absolutely certain that, together, we can build a better 414.

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