Tuesday, May 09, 2006

Insolvency or Bust?: Starting the Case for an Even-Handed Approach in Milwaukee County

Here is a handy chart provided in the George Lightbourn piece on the Milwaukee County budget from yesterday:

(Click image for bigger view.)

It’s pretty clear there’s a big problem looming in Milwaukee County. And, according to Lightbourn, the only way out is to bring in an unelected oversight board to effectively dismantle and restructure the county government.

He writes that such a board needs to “restructure staffing, cut spending, install financial controls, manage the county’s finances until deficits are eliminated, and develop a long-term plan for fiscal solvency.”

In other words, we should do everything possible to make the cost line in the chart above as flat as the revenue line.

And county executive Scott Walker agrees with this approach. He’s prepared to announce every cutback and outsourcing proposal under the sun over the course of this summer, but he stands by his guns to do nothing to significantly raise county revenues.

To be fair, Lightbourn does consider in his article how much revenue would need to be raised in order meet the worst-case scenario budget deficit projections. These are what he calls “alternative” solutions to his unelected board proposal.

But Lightbourn greatly short-changes the alternative solutions. Specifically, he examines an increase in property taxes separate from an increase in sales taxes. Additionally, he considers all forms of increasing revenue separately from cuts.

In essence, he basically sets-up a straw-man argument. Of course raising property taxes alone, or raising sales taxes alone, or simply making more cuts alone will not be enough -- but when put them together they sure can make the looming crisis look a lot more workable.

So instead of trying to flat-line expenditures, and subsequently services, to match the flat-lining revenue, the best approach is to find a way for the two to meet somewhere in the middle.

As much as proposals to solve the budget situation in Milwaukee County follow this approach, my support is behind them. But anything that considers affecting only one of the two lines in the chart above is, in my view, dead in the water.

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