Monday, May 01, 2006

Walker Still Playing Politics with Milwaukee County Finances

In an article over the weekend, the Milwaukee Journal-Sentinel reported that Scott Walker is still pushing to have the state take over some of Milwaukee County’s responsibilities in an attempt to better the dire fiscal position of the county.

But now he’s added a new election year twist to the request -- bashing Jim Doyle.

According to the article: “Walker said the odds were against his idea to cut the county work force and substitute state workers as long as Democratic Gov. Jim Doyle stays in office.”

As usual, Walker is trying to politick his way through the fiscal position of the county rather than actually govern through it.

The problem with the state taking over Milwaukee County responsibilities is not Doyle -- it’s the Republican-controlled state legislature. A significant state takeover would never even reach the governor’s desk, so it doesn’t matter who is occupying it.

In fact, Walker just met with 23 Milwaukee-area state legislators in March about pawning off some county services onto the state. While all of the legislators agreed the fiscal problems of Milwaukee County are indeed very real, they were similarly unanimous in their opinion that the cash-strapped state isn’t going to be able to help.

But now, just two months later, apparently it's Doyle's fault that the state isn't able to take over Milwaukee County's responsibilities.

Just out of curiosity, is Walker's desire for the state to take on more costs from Milwaukee County evidence that he opposes constitutionally restricting the amount of public revenue the state is allowed to collect?

Something tells me Walker would prefer to have his cake and eat it, too.


Blogger molliemous said...

This Green fellow is another cake eater...from the same article:

U.S. Rep. Mark Green of Green Bay, the Republican still running for governor, said in a written response that he agreed "court costs should be off of the property tax rolls and as governor, I will work with the counties to do that." He did not address the issue of substituting state workers for county intake workers.

He also did not explain how in the wide, wide world of sports he was gonna pay for this little cost shift...Bride of Tabor lover that he is.

devil's in the details, I guess.

May 01, 2006  
Blogger Seth Zlotocha said...

Good point.

It was clearly a bit of coordinated posturing on Green's part -- saying something, but without actually making a specific pledge to do anything about it. And he also broadened the comment to include all courts, not just those in Milwaukee County.

The issue at hand in Walker's request, of course, is solely the courts from Milwaukee County -- which is exactly what makes it an untenable request.

In addition to the fact that the state is too cash-strapped to take on any services that add significant cost, politically it would be next to impossible to convince out-state legislators to support taking over the courts for Milwaukee County alone.

Walker knows all of this -- and he also knows none of it has anything to do with Jim Doyle.

May 01, 2006  
Anonymous Anonymous said...

Hello Seth, it's your friend who's familiar with Milwaukee County government.

I have a challenge for you. Pretend you have been elected County Exec in Milwaukee County and are about to submit your first executive budget for 2007. The budget director has informed you of the following:

Health insurance costs for your 4,500 employees and 6,000 retirees are expected to climb from $126 million to around $140 million.

About 500 people will retire with fully-paid sick leave benefits and backdrop payments totalling around $7-10 million (very conservative).

The required annual pension contribution for the year will be approximately $50 million.

Wages for your employees, assuming you keep all of them, assuming step increases only (no Across-the-Board) will rise from $254 million to $262 million (3.1%).

Your OPEB liability, which GASB does not actually require you to fund (but it's good fiscal practice) will be about $30 million.

Total personnel costs: $492 million.

County property tax levy in '06 was $232 million. By state law you are allowed to raise it by a maximum of $10 million.

Aside from the personnel costs listed above, you have inflationary increases to fund in all service areas, a major backlog in park maintenance. State and federal revenues of about $1 billion are not expected to increase, in fact you'll be lucky if they remain constant.

You budget director tells you that, based on an allowable tax levy increase of $10 million and stagnant state/federal revenues, you are currently facing a deficit of $90 million in 2007. If trends continue, those deficits will rise to let's say $115 million in '08, $150 million in '09, $185 million in '10, and $250 million in '11. He tells you that the main driver of the exponential increase in the deficits is the estimated increase in health insurance, especially for retirees.

Your other options for raising revenue are as follows:

1. You could, without state approval, implement a $25 fee on vehicle registrations that would provide an estimated $10 million in revenue annually; and none of your neighbors have implemented this policy.
2. You could request state approval to implement higher sales taxes taxes. A half cent would get you $60 million annually (which would rise annually by 4%).

Keep in mind the following:

1. You have no control at all over state or federal programs or revenues, and it is extremely bad budgeting practice to assume phantom revenues will cover operating expenses.

2. The current trend is for wealthy, educated citizens to move out of the county at a higher rate than they are moving in.

3. Within 10 years, it is expected that Waukesha County will overtake Milwaukee County in taxable equalized value.

4. Milwaukee’s demographics are as follows: Median household income is 10% below the national average; median family income is 6% below the national average; per-capita income is 8.3% below the national average; and 15.3% of the County’s population lives in poverty, above the national average of 12.4%.

5. Two-thirds of your workforce is represented by a union that denies the County has any fiscal problems whatsoever.

6. Your represented workforce has a last-in, first-out policy; meaning any layoffs you do pass would require younger, lower-paid workers to be let go first while older, higher-paid workers who have vested benefits will simply shuffle between departments.

7. The legislative branch of government, which has shown no cohesion, leadership or vision in 5 years, can be expected to oppose any cuts you propose.

This is the problem facing Milwaukee County government right now. You like to take shots at Walker, who deserves them, but I think a comprehensive plan would make a great next post for you...

May 02, 2006  
Blogger Seth Zlotocha said...

I don't think I was taking a shot at Walker so much as I was imploring him to stay on point and not play politics with the situation. In fact, what I want him to focus on is the very question you're asking me to answer: How do you solve the fiscal crisis in Milwaukee County?

My post was about Walker taking pot shots at Jim Doyle -- that's it. I respect the difficult position Walker is in as county exec, and that's why I think he should focus his attention on solving the problem, not the gubernatorial race.

What new piece of information was presented in the JS article I linked to in my post? Absolutely nothing -- besides the shot at Doyle. Walker got the attention of the JS in order to take that shot at Doyle, pure and simple. Of course, the JS took the bait and went to Doyle's spokesperson for a comment. And I'll put money on the fact that Leistikow's comment about the county needing to cut more will be used in the future by the Walker camp as proof that even the Democratic governor thinks more needs to be shaved from the county budget.

In short, it was a fishing expedition. Walker got Doyle to say he won't help and that more should be cut, while Green -- almost like he knew it was coming -- responded by saying of course he'd be happy to work with the counties to better their fiscal position if elected governor.

But, tell me, how exactly did the fiscal position of Milwaukee County become an issue in the race for Wisconsin governor?

That said, I think you make a great point in your comment. Bloggers and commentators in every medium should work toward proposing solutions in addition to criticizing political moves.

But there's no way I'm going to be able to answer the question you pose single-handedly. Not even Walker can do that. There's a reason he has a good number of aides around him working on this issue full-time -- people who are trained to provide solid insight. For all I know, you could be or could've been one of those people.

I don't have the luxury of aides. But I will do my best to chip away at the issue in the coming months. After all, I care a lot more about Milwaukee County than I do Scott Walker. I'm more interested in solving this problem than I am in getting a new county exec. (But, hey, I won't lie -- both would be nice.)

So to start my chipping away, I'll propose this. Reinstate the county board-approved commission to study ways to increase revenue -- the one that Walker vetoed a couple months back. This will start the process towards a reasonable, yet significant, increase in money flowing into the county.

I'd also take a close look at some jobs that could either be phased out or contracted out, although I'd prefer not to take any significant steps toward this until I see what sort of new revenue we can generate.

And, in an admittedly political move at this point, I would get behind comprehensive health care reform at the state level. Walker has clout in the GOP -- he should use it to push the DDecker/Musser plan that was just announced last week. This plan could save the county millions.

That’s it for now. I’ll keep my eye on proposing solutions for the county’s fiscal problems in the future -- I just want Walker do the same.

May 02, 2006  
Anonymous Anonymous said...

I will post a longer response later, but what do you think about DC 48's rhetoric that there is no fiscal problem in Milwaukee County?

May 03, 2006  
Blogger Seth Zlotocha said...

I can't find anything where DC 48 denies the fiscal problem in Milwaukee County. Do you know of a specific instance when this happened?

In fact, based on what I've read, DC 48 already made some concessions on its contract with the county in recent months.

According to a JS article from October, "[DC 48] has agreed to cap eligibility for the 'backdrop' pension payouts and give back some of the enhanced sick leave. The union will agree to new co-pays on health insurance...but only if they are tied to wellness programs that bring down health care costs in real terms."

Sounds to me like DC 48 recognizes the county's fiscal problems. I can't imagine it would agree to any contract givebacks just for the fun of it.

Perhaps DC 48 and the other unions should give back more -- but as I have mentioned before, I don't think this is justifiable until the county seriously looks at ways to increase revenue.

May 03, 2006  
Anonymous Anonymous said...


I know that DC 48, like you, is convinced that revenues can be found to pay for their contract demands and that the only reason they've agreed to some givebacks is because arbitrators look at how an organization's other represented employees are compensated. Being that every other of the County's unions have agreed to significant givebacks, DC 48 knows they'd never win an arbitration in which they weren't somewhat conciliatory.

But what you will not read in the papers is that when it comes down to it, DC 48 doesn't give much of a damn about the fiscal problems of the County. This is an organization whose liaison to the Board claimed - in public - that the solution to the County's health care problems is to pass a resolution supporting universal health care.

Hey, why not pass a resolution stating that the County will win the next 17 powerball jackpots while you're at it?

So Seth, have you come up with a way to generate a quarter-billion more dollars by 2011? I ask because those aides you mentioned, upon which Walker relies, have tried. Believe me. It isn't there.

May 03, 2006  
Blogger Seth Zlotocha said...

This issue didn't come over night. I'm sure the aides have been warning Walker about it for years.

And while it doesn't do us any real good to dwell on the past (although Walker has done his fair share of lamenting about Ament for political points over the years), allow me a moment to rant.

Four years have now gone by and Walker has done nothing to increase revenues to cover the county's current, as you see it, insurmountable debt. Perhaps if Walker had been more concerned about the impending fiscal debt for the past four years than he has been with his own personal political debt to people like Sykes and groups like CRG, that fiscal debt wouldn't be quite so insurmountable today.

But, I digress.

My point has been in the past and remains this: While it may indeed be necessary to cut more from the county budget -- perhaps in services, perhaps in workers, perhaps in both -- this crisis will not be solved without increasing revenues. And until Walker faces this situation as an executive and not a far fiscal right politician, that's not gonna happen.

And a quick comment on the point of healthcare. You’re completely right that advocating for the state to do something about rising health care costs without doing anything else to help the immediate situation is not a wise move. But ignoring the issue altogether is an equally unwise move.

Walker has pushed for numerous issues in the past that are not within his purview as Milwaukee County executive – most recently the so-called “Taxpayer Protection Amendment.” He even drove to Madison one day to push for that one.

So it’s hardly unreasonable to ask him to put some of his political clout behind comprehensive health care reform in the state. The county exec for Fond du Lac County has stated that the recent bipartisan plan offered by Sen. Decker and Rep. Musser would save his county over $3 million per year in health care costs. Imagine what a county the size of Milwaukee could save with the plan.

So while you’re right it’s not the only move the county should make concerning the rising costs of health care, throwing some weight behind reform at the state level isn’t a bad move altogether.

I look forward to you stopping by again. In the meantime, I’ll try to put up some posts on the county budget situation without taking a shot a Walker. And if you’re still in touch with Walker at all, I hope you’re pushing him to do the same without taking a shot at Doyle or Ament – just like you’re pushing me in these comments.

May 03, 2006  

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