Civic Dialogues: Milwaukee’s current financial crisis

By Sophia Tiedge sophia.tiedge@marquette.edu

Paramedics, firefighters, police officers, the quality of infrastructure and the safety of Milwaukee’s streets all rely on finances from the city.

Since 2009, Milwaukee’s finances have worsened and are expected to continue plummeting in the coming years.

Rob Henken, president of Wisconsin Policy Forum came to Marquette Jan. 24 to talk to the Civic Dialogues program about Milwaukee’s financial future.

“In 2009, we were concerned because the city’s major revenue streams hadn’t been growing for many years, which was starting to have an impact on the city’s ability to maintain funding for vital services,” Henken said.

Henken said Milwaukee’s revenue structure is unique compared to other major cities. 96% of the city’s revenue comes from property taxes, and unlike other cities, Milwaukee is unable to benefit from sales tax. Other cities have access to motel and hotel taxes, but in Milwaukee that revenue goes doesn’t go to the city, it goes to the state.

Susan Giaimo, adjunct associate professor of political science, said people who come to Milwaukee from the suburbs aren’t getting taxed on entertainment, and she thinks this isn’t fair to the city.

“Their quality of life is good because they have the city. If they didn’t have the city, the suburbs would be a boring place to live,” Giaimo said.

Philip Rocco, associate professor and director of undergraduate studies, said the majority of Milwaukee’s financial future is actually in the hands of the state.

“Unless the state legislation gives the city a share in sales tax or state revenue, the city will continue in this crisis, which could lead to bankruptcy,” Rocco said.

Milwaukee is unable to control its own sales tax.

Milwaukee’s 5.5% sales tax is made up of 5% Wisconsin sales tax and 0.5% Milwaukee county sales tax.

Henken said that Milwaukee receives $230 million per year from the state, but that amount hasn’t changed in 25 years, despite inflation.

Henken said Milwaukee needs sufficient funds in order to support city services. He said Milwaukee used to have access to reserves they could draw from when needed, but now those reserves are running out of money.

This year’s budget includes $81 million from American Rescue Act dollars. This will help the city fund services, but this money is being used all at once and won’t be renewed.

“I think by 2025 we’re probably looking at a hole in the budget that’ll exceed 100 million dollars,” Henken said.

Henken said the city is already falling into debt due to repairs that need to be done on aging infrastructure and other services.

“It’s a band-aid on a much bigger problem,” Nicole Laudolff, a senior in the College of Arts & Sciences and a member of the Civic Dialogues program, said. With the city losing more and more funds for services, things like public safety and the city’s upkeep might become concerns.

“If Milwaukee has to make major cuts to large services, it’s going to make Milwaukee and our campus less safe. Obviously that’s something students and their parents consider on tours of Marquette,” Laudolff said.

Henken said that these major cuts have already started happening. He said library hours have been reduced, the Milwaukee Police Department is down 180 officers, firehouses have been shut down and many positions have been cut in order to save the city money.

“Do you like streetlights? Do you like safe streets? The city’s ability to provide those things are going to hinge on their fiscal health,” Rocco said.

Rocco said that in order for Milwaukee to maintain the aspects that make it a good place to live, they have to have the funds to support them. Rocco said the solution to this problem shouldn’t be complicated, it’s the state politics that really matter.

“There’s no more fat to cut, we’re cutting into muscle and we’re cutting into bone,” Henken said.

Giaimo said Marquette students should be pushing for a version of Milwaukee that will allow them to stay here after graduation.

“People aren’t going to want to live here if emergency services don’t work. People will die,” Giaimo said.

However, Henken believes there’s hope.

“When you look at our state’s leadership, they’re young and they’re diverse. I think that’s great for our city and it should be great encouragement for young people to want to get involved in government,” Henken said.

Giaimo said that if students want to live in a city that can foster a future for their generation, they need to stay on top of local government affairs because they do have an impact on their future.

Giaimo suggests students attend the Joint Financial Committee meetings around the state to share their opinions on the legislation.

“If you don’t get involved, someone else is going to make those decisions for you,” Giaimo said.