Mayor Barrett’s Fiscal Management
Milwaukee’s financial condition is on firmer ground than many of the nation’s largest cities. Mayor Barrett’s approach to fiscal management has led to the maintenance of critical services, continued investment in City infrastructure improvements and unprecedented commitments to financial reserves.
The road Mayor Barrett has taken has not been without difficulty. The 2011-2013 State Budget contained the largest reduction in State Aids to the City: $300,000 in ERP aid, $9.87 million in state shared revenue, $2.3 million in state transportation aids and $1.1 million in recycling grants. Since 2003, the City has experienced a $23 million reduction in State Shared Revenue and Expenditure Restraint Aid payments.
Mayor Barrett addressed the impact of the 2008 financial crisis on our Employee Retirement System and the City Budget by implementing $31 million in operating budget cuts, responsible changes to pension financing and tough, but fair negotiations with organized labor. Mayor Barrett has responded effectively to the alarming trends in foreclosed properties by reallocating resources, implementing new strategies and successfully obtaining substantial federal and other non-City resources.
Mayor Barrett has reduced the City’s work force by nearly 500 full-time equivalent positions. Despite the reduction, Mayor Barrett’s “bottom line” focus has remained on improving performance. As a result of the Mayor’s Accountability In Management (AIM) program, the City has experienced:
- A reduction in violent crime by 23.2% since 2007 and property crime by 20.7% during the same period. Effective deployment strategies, increased police productivity, and Mayor Barrett’s leadership in gaining a federal COPS grant that has fully-funded 45 police officers have supported this critically important performance without unsustainable budget commitments.
- Substantial improvements to replacement cycles for core infrastructure such as streets, street lighting, and sewers, while annual authority for new levy-supported general obligation borrowing has remained at the 2004 budget level. Mayor Barrett fought for a fair share of federal stimulus funding for Milwaukee’s major streets, and the Mayor’s 2012-2017 Capital Improvements Plan will achieve a 50-year replacement cycle for local streets by 2014—compared to a cycle of more than 100 years that he inherited in 2004.
- The Fire Department’s emergency service response times remain among the best in the nation. As a result, during the first half of 2011 the department achieved a 98.8% survival rate for stabbing victims and a 92.7% survival rate for gunshot victims.
- Despite State government’s disparate treatment of local government employees as a result of changes to the collective bargaining laws, we have achieved equitable treatment of all employe groups regarding cost-sharing for health care benefits. Our recent collective bargaining agreements with police and fire unions negotiated 0% wage increases for 2010 and 2011, and achieved the 12% employe health benefit premium share with public safety unions for 2012. These agreements have reduced the annual baseline costs of City services in 2013 by $24 million when compared to prior wage and benefit trends.
The Challenges Ahead
When it comes to the City’s financial management, 2012 is no time to coast. The impacts of State aid cuts, the Legislature’s two-tier collective bargaining system, and the state imposed levy limits will have serious implications for 2013 and beyond.
Beginning in 2014, our pension contributions may average as much as $90 million or more a year. Mayor Barrett will work cooperatively with the Common Council to develop a responsible contribution plan that meets our pension fund obligations and preserves our capacity to fund the most critical services.
In order to prepare for the 2013 and future budgets, Mayor Barrett is directing a thorough review of city operations by all department heads. This process must generate new ways of doing business that redirects funding toward the most important priorities and that improves the quality and productivity of City services. We will need to replicate the progress that we have made since 2004, and then some.