Report: Abele uses fee increases to close budget gap

For 2018, county executive aims to raise $19 million while avoiding cuts

Milwaukee County Executive Chris Abele’s recommended $1.16 billion budget for 2018 avoids service cuts by embracing more than $19 million in new or increased fees, says a new report by the Public Policy Forum.

Topping the list of added revenue sources is a $30 boost, to a total of $60, in the county vehicle registration fee.

The fee increase would generate nearly $14.7 million next year and the extra cash “would be used mainly to preserve existing levels of transit services,” according to the forum’s annual budget brief released Friday.

The additional revenue would replace property tax dollars in the transit budget that could be distributed to other county departments to avoid service cuts.

“A $30 increase in the vehicle registration fee is the principal strategy to avert major service cuts even though it would contradict the results of an advisory referendum last April,” the report says.

Fully 72% of county voters in the spring election opposed a total $60 fee.

In defense of embracing a $60 wheel tax after the vote, administration officials said the advisory referendum question did not explain the impacts of service cuts that would be needed if the higher fee was not approved.

Forum researchers suggested the outcome of the advisory vote would have been different, and “a more valid barometer of public sentiment,” if the referendum question had included the county’s limited options to gain more revenue. Municipalities face state caps on the local sales tax and limits on annual increases in the property tax levy.

Apart from the wheel tax increase next year, the county budget also includes “$4.7 million in other new or enhanced fees, including new parking fees at county parks, transit fare increases for regular users, increased Milwaukee County Zoo admission fees, and increased fees for phone calls made by jail and House of Correction inmates,” the report says.

Public Policy Forum President Rob Henken said the nonpartisan research group has routinely suggested that a more balanced approach to budgeting, involving both spending cuts and increased revenue, is the most appropriate solution to the county’s recurring structural deficits.

“It is fair to ask whether that balance has shifted too far to the revenue side in the recommended budget,” Henken said.

“The issue is not that $19 million in new revenue is not needed,” he said. “Instead, it is whether the fee increases should be accompanied by expenditure reductions —- which admittedly would involve real cuts in service — as a means of taking an even bigger bite out of the structural deficit.”

A push to trim expenditures inevitably would lead to cuts in discretionary services and programs such as parks, culture and transit, the forum report said.

County Board Chairman Theodore Lipscomb Sr. is pushing for spending cuts of at least $15 million as an alternative to approving the $30 wheel tax increase.

A deficit occurs when growth in ongoing expenses outpaces available revenue. County officials faced a $30.9 million deficit when they started planning the 2018 budget, according to comptroller Scott Manske’s review of the recommended budget.

The administration in recent years made progress in reducing structural deficits by lowering debt service payments, trimming health care costs and cutting staff, according to the forum report.

Even so, “stagnant revenue, escalating retirement obligations” and a backlog of costly parks and building maintenance projects pose formidable obstacles to balanced budgets, the report said.

“This report confirms what I’ve been saying for more than a year,” Abele said Friday. “The county has found millions of dollars in savings and efficiencies. We are now to a point where, in order to close our deficit each year, we must have new revenue or we must make deep cuts in services.”

A total $60 wheel tax is projected to generate $30.6 million next year.

The board could act on the proposed $60 vehicle registration fee at a Nov. 2 meeting. Supervisors are scheduled to take final action on the 2018 budget on Nov. 6 at the courthouse.