How does the condition of the County affect me?

If you live, work or visit Milwaukee County – you are affected by the current fiscal condition. For example, quality of life services like Milwaukee County parks, pools, the County Zoo, the Milwaukee County Transit System and cultural institutions like the Public Museum and the Marcus Center are funded by the County. Even if you never use these services, they are what attract visitors to our County. These visitors purchase things in Milwaukee, which increases our sales tax revenue. Also, these are the types of things considered when businesses and workers look to relocate. Attracting new businesses and jobs is beneficial to everyone. Additionally, vital services such as Behavioral Health and Family Care are run by the County, and provide a safety net for all residents.

What happens if we don’t make any changes?

Unless major structural and fiscal changes are made, Milwaukee County is facing an aggregated $500 million budget gap between 2012 and 2016. Because the County must balance its budget, if the County doesn’t enact fundamental reform, the County will be required to either dramatically increase taxes or slash services

How will I be impacted by the Initiative?

If the changes outlined in the Initiative are accomplished, Milwaukee County will be a more attractive place for businesses to grow and add jobs. Our community will be a better place to live, work and play thanks in large part to the ability to retain and enhance institutions like the Milwaukee County Zoo, Parks, Museums and other cultural assets. Additionally, these changes would mean improved critical services like transit, behavioral health and public safety.

What are the root causes of Milwaukee’s fiscal deficit?

Every year since 2003 Milwaukee County’s expenditures have outpaced expected revenue growth. While costs have consistently increased, revenue streams like property tax, sales tax and state revenue have remained flat or decreased.

One of the largest drivers of the County’s expenditures is growing healthcare and pension costs for both active and retired employees. From 2000 to 2009 the cost of active and retiree healthcare and pension costs increased nearly 300%, from $66.5 million to $178.9 million. At their current growth rates, by 2016 every dollar of property tax will be needed to cover health care and pension costs alone.

How can the County have a deficit if it must balance its budget each year?

Each year, the County’s expenses have continued to increase, while revenue sources have remained largely flat. As part of the budgeting process each year, the County must find a way to either cut costs or increase revenue to balance the budget. In the past few years, the County has relied primarily on wage and benefits changes, which must be approved by the unions, to balance the budget. If an agreement is not reached it means those funds have to be made up elsewhere. Most recently, we have seen the effects in furlough days and service cuts.

What role do the cities and townships that make up Milwaukee County play in the Initiative?

Cities and townships in Milwaukee County are major stakeholders in the County’s success. Better funding for County services that provide for the needs of city residents (such as MCTS and County Parks) attract people to live, work and play in the municipalities that make up the County. In addition, there may be important opportunities for the County to partner with municipalities to deliver certain services more efficiently. For example, policing in county parks might be handled more efficiently by local police officers rather than County Sheriffs. Municipalities might also be able to provide road maintenance services including snow removal.

How long will it take to make the changes in the Initiative? When can I expect to see the impact?

The timeline for implementing these changes will vary. Some can be done on a County level and implemented quite quickly, such as a Master Plan of physical assets. Other recommendations will require state legislation and may take longer. Still others require negotiations between the County and the unions. Thus, the greatest need is to put pressure on key decision makers to demand action now.

If we make all the changes outlined in the Initiative, will it be enough?

The changes outlined in the Initiative, while critical to addressing the County’s fiscal and structural challenges, are not meant to be all-encompassing. Rather, these changes are designed to be the first steps to help us better allocate our resources. It will be a gradual process of improvement, but we believe these steps are the keys to beginning that momentum.

What is a Fiscal Stress Test? How will it help improve the County’s situation?

Fiscal stress test systems have been created over the past several decades to assess and monitor the conditions of local government. An example can be seen in Michigan where a set of 9 indicators is used to determine the fiscal health of cities and townships. If one or more conditions indicative of a local government financial problem exist, the State Treasurer conducts a preliminary review. If a serious financial problem exists, the Governor must appoint a review team to report on the situation and if necessary an emergency financial manager steps in.

Unlike in Michigan, the proposed Wisconsin stress test would solely focus on encouraging greater openness and transparency in the operation of local government. It would largely rely on information municipalities already provide to the Department of Revenue and require the state to publish this information online in an easily understandable format for public review.

A fiscal stress test would apply to all local governments throughout the state. A regular review and ‘stress test’ would greatly benefit all local governments, including Milwaukee County. Regular review would lead to the potential to analyze and fix potential fiscal crises before they occur and would provide local governments with the guidance and tools necessary to make wise financial decisions.

Are you proposing a “Financial Martial Law”?

No. Michigan recently passed a bill giving broad new powers to the emergency managers who oversee financially struggling cities and schools, including the authority to remove elected officials. Some have called this a “financial martial law.” The Initiative does not support this type of legislation in Wisconsin.

Why is providing municipalities with flexibility during labor contracts so important?

There is a great need to ensure that the fiscal challenges facing local governments are adequately considered during labor negotiations. These negotiations need to account for a broader range of considerations in order for local governments to maintain fiscal health and stability.

These sound really far removed from my experiences with the County. How would these legislative tools impact me?

These tools would allow the County to address its current financial crisis by providing the tools necessary to implement fiscal reform. Without these legislative tools in place, the County will likely find it increasingly difficult to make any headway in fiscal reform. Instead, services are likely to be severely cut, taxes may increase substantially, or some combination of the two will occur.

The Initiative wants to bring Health Care expenditures in line with national norms. What does this mean?

Currently, Milwaukee County’s costs for employee health care are significantly greater than the national average. In large part this is due to the fact that current union contracts require much lower employee contributions than the national average. For example, current employees pay 5-7% of the monthly premium for health insurance versus a national average of 20-25%. A significant percentage of retired employees pay nothing towards the monthly premium. Thousands of active employees are also slated to receive this benefit. This has two effects: (1) the County pays a much greater percentage of the total health care costs; and (2) employees have less incentive to select lower cost plans.

What is so unique about county health care benefits for retirees?

Retiree health care benefits are unique for two reasons. First is that retirees form a large percentage of the total subscribers to the county health insurance plan — 58% of subscribers as of 2009. Second, a significant portion of retirees (and their spouses) receiving health care benefits from the county cannot be required to pay a monthly premium; this group has little incentive to select lower cost health care plans. So, for example, 71% of active employees subscribe to the less expensive PPO plan, but only 19% of retirees select this plan.

It is important to note that the County has already ended this generous retiree health care benefit for new employees. This benefit applies only to workers who began employment before 1994 and accumulated 15 years of service – they are now eligible to receive fully-paid health insurance premiums for themselves, their spouses and eligible dependents during retirement. While this benefit was ended for new employees 15 years ago, most retirees were hired before that date. Furthermore, approximately 2,000 active county employees are eligible for this benefit when they retire.

Some have asked why we can’t simply eliminate the pre-1994 retiree healthcare benefit? Legal opinions previously procured by the county have suggested that under Wisconsin law, this benefit is considered a “property right” for those who are already receiving it and cannot legally be taken away.

Does that mean that the Initiative is looking to solve the fiscal and structural problems “on the back of labor”?

Absolutely not. First and foremost, the Initiative will help preserve services in Milwaukee, which means jobs will be protected – this is good for the community and good for workers. In the area of health care benefits, we believe that County employees should have access to similar high quality benefits as their peers. We are simply advocating for changes that will bring these benefits more in line with national standards.

How will changing benefits for county employees benefit me?

The number one driver of Milwaukee County’s fiscal crisis is health care expenditures. If we can reduce these expenditures it will mean a County budget that can better fund the quality of life and social services that we use and value.

I heard the County is actually an arm of the state. Can you explain what that means?

In Wisconsin, counties are a creation of, and primarily serve as, an arm of state government. That means that much of what counties can and cannot do is determined by State law and the State Constitution. In particular, State Statutes require Milwaukee County to provide and fund certain essential services for the public good such as courts, juvenile detention and incarceration facilities like the House of Correction and the County jail. Other County functions, such as parks and culture, are permitted by the State, but not required.

So, what’s the difference between mandatory and non-mandatory services?

Mandatory services are services that State Statutes require Milwaukee County to provide. State Statutes require Milwaukee County to provide and fund essential services for the public good such as courts, juvenile detention and incarceration facilities like the House of Correction and the County jail. Non-mandatory services are those the County may – but is not required to – provide, such as parks and transit.

The Initiative seems to focus on non-mandatory services? What about mandatory services?

The Initiative’s recommendations focus on putting the County’s fiscal house in order. If the County’s balance sheet is strong, it will be able to deliver services more effectively and efficiently – whether those services are mandatory or discretionary.

In addition to making recommendations specific to discretionary services, such as spinning off parks and transit, we are making specific recommendations regarding the operational and financial problems with Milwaukee County’s behavioral health services. Behavioral health services are important and mandatory services provided by the County.

Many non-county residents use our services. How do the changes impact them?

The changes outlined in the Initiative would allow for improving and expanding the services that attract visitors. Under our recommendations, services like the Zoo, Parks and cultural institutions would have a dedicated stream of funding that would ensure better long-term planning, leading to a better experience for any non-county visitor. In turn, these visitors help support the county, through admission fees, sales tax revenue and through their support of other institutions in the community.

So you’re talking about reducing the size of the County. Could we be looking at a reduction in my taxes?

While we can’t say for certain that the County Board would reduce the tax levies in the County, the recommendations outlined in the Initiative may allow for a lower burden on the property tax, which could result in lowering the property tax.

What benefits could a Master Plan for the County’s assets provide?

A Master Plan would assist the County in making decisions about future use of the County’s assets in the context of a broader vision about the County’s future. A strategic master plan that identifies how we can maximize use of County assets would lead to future land use that is comprehensive and has direction.

In some cases, the County may find that reinvesting in existing facilities or locations meets a critical need. In other cases, the County may pursue the sale or long-term lease of properties that no longer meet its needs or that cannot be used cost-effectively. This practice would provide additional revenue to the County and reduce long-term operational costs.

Efficient land use and the County’s assets must be a part of a broader vision that addresses what we want Milwaukee County to look like five, ten, 20 years down the road. That vision cannot be addressed without a Master Plan.

Isn’t there already an audit of physical assets?

In September 1999, the Department of Audit issued a report on Milwaukee County’s property management. The audit concluded that a comprehensive inventory of County facilities did not exist and highlighted the need for a formalized space management process with coordination at a central point within the County. While the County has made some steps to identify all County building and property assets, initial assessments of all County facilities, which began in 2001, have not been completed.

Are you talking about a fire sale of County property?

No. We are recommending a strategic plan that would identify how we can maximize use of County assets to better serve our community. In some cases, the County may find that reinvesting in existing facilities or locations meets a critical need. In other cases, it may be in the best interest of the County to pursue the sale or long-term lease of properties that no longer meet its needs or that cannot be used cost-effectively. This practice would provide additional revenue to the County and reduce long-term operational costs.

Would you really advocate relinquishing assets with the real estate market so low?

Market rates and real estate trends would be an important consideration in the master plan and would be used to help guide the potential utilization of assets.

What are the benefits of spinning off separate authorities?

Creation of authorities to govern these services, with their own dedicated funding sources, would remove the services from competition with other County functions for annual operating assistance. It would also provide greater certainty about funding, which is essential for long-term planning, as well as securing non-public funding.

Wouldn’t this just create another layer of government?

While spinning off and funding services like transit, parks and culture would add another element to County governance, it would allow for better oversight and long-term planning and would allow these services to be adequately prioritized.

How does this Initiative dovetail with other regionalization efforts (i.e. parks, transit)?

We anticipate working closely with initiatives already underway both with parks and transit.