75 percent of respondents selected an option to increase the countywide sales tax to close the operating budget gap
Milwaukee County Executive Chris Abele today announced more than 1,150 residents participated in Balancing Act, an interactive online tool simulating the process to balance the 2020 budget. Participants analyzed the County’s $1.2 billion operating budget, determined ways to close the projected $28 million gap and submitted a balanced budget.
“Public engagement is a cornerstone of our budget process,” said Abele. “A record number of residents took the time to get involved, weigh in and help us make the hard decisions necessary to put our fiscal house and priorities in order so that we can continue building an even greater Milwaukee County.”
Balancing Act this year allowed participants to balance the budget with revenue tools that would require a change in state law to implement. State law currently limits the ways local municipalities can raise revenue, including caps on property and sales tax. With these options unlocked, more than 75 percent of respondents elected to raise sales tax as a way to close the budget gap.
Wisconsin state law also determines how to allocate funding through shared revenue and other state aids. While Milwaukee County taxpayers have increased income and sales tax payments to the state by $355 million over the past decade, shared revenue and other funding from the state has declined or remained flat over the same time period. More than 70 percent of Balancing Act participants opted to increase state aids to the County.
Participants in Balancing Act were far less likely than in previous years to increase the vehicle registration fee (VRF), which is the only significant revenue raising tool currently available to Milwaukee County. The County’s vehicle registration fee is currently $30 per year but could be increased up to about $60. In 2018, 71 percent of Balancing Act participants increased the VRF in some way. This year when given the choice between other revenue sources, 54 percent chose to increase the VRF to balance the budget.
When closing the budget gap, respondents chose to do so 71 percent by increasing revenue to fund Milwaukee County programs, services and facilities; and 29 percent by reducing the budgets of County departments.
On average, most funding increases occurred in public safety, health and human services, and recreation and culture. Most funding decreases occurred in administration, debt service, and transportation.
Balancing Act is used by more than 60 local government entities nationwide. The tool walks users through the local budget, with explainers on key financial issues and local topics. Milwaukee County participation this year again broke the participation record for the tool since its launch. This tops the Milwaukee County record in 2018, which had more than 650 participants.
“Milwaukee County is at the forefront of local governments that are using budget simulations to hold fact-based conversations with residents about the services they value and, importantly, how to pay for them,” said Chris Adams, President of Balancing Act. “By putting residents into the shoes of policymakers, Milwaukee County’s efforts to involve the public in the budget process provides local governments everywhere a roadmap to sync the public’s demand for services with the revenue needed to provide them.”
This is the third year Milwaukee County has used Balancing Act. This year Balancing Act was open from July 16 until September 3 and took participants an average of 23 minutes to complete.
As part of the 2020 budget process, Milwaukee County officials also hosted a series of public engagement sessions in August to discuss the proposed budget directly with residents. Residents also had the opportunity to weigh in on potential new revenue solutions to help close the local compounding deficit.
Abele will submit the 2020 recommended budget proposal to the County Board of Supervisors on October 1, 2019. The proposed 2020 budget is balanced, and bolsters bus services that residents expect, builds on homeless services initiatives and expands investments to promote racial equity.
Milwaukee County provides nearly 1 million residents with state-mandated and non-mandated services ranging from transportation and health and human services, to parks and public safety. The County’s structural deficit has compounded over the years, due in part to the imbalance of revenue the County receives from the state and state-imposed caps to raise revenue locally.
Due to the imbalance of revenue the County receives from the state and state-imposed caps to raise revenue locally, the County has faced a cumulative budget deficit of $278 million since 2012. In the same timeframe under Abele’s leadership, cost-saving measures including moving out of 1.6 million feet of underutilized office space, increasing energy efficiency and streamlining operations have contributed to building the foundation for the County’s fiscal health.
In order to have the tools to generate necessary funding going forward to support Milwaukee County’s ability to serve its residents, Abele recently joined local governments, business leaders, and community leaders to launch Move Forward MKE. Move Forward MKE is pursuing a solution with the state to give voters the power to decide if Milwaukee County and its 19 municipalities should be allowed to generate the revenue to adequately fund public services, maintain facilities, provide tax relief and invest in the future through a binding referendum process.