March 30, 2023
Wisconsin Policy Forum Report Highlights Urgent Need for State Action on Local Government Revenue Reform
Report forecasts a possible $25.6 million transit system gap possible in 2025 when federal ARPA funds are depleted
MILWAUKEE, WI – Independent research group, Wisconsin Policy Forum (WPF), released sobering findings today concerning Milwaukee County’s fiscal cliff and the massive impact it will have on a key quality of life service relied on by thousands of residents: the Milwaukee County Transit System (MCTS). The WPF report finds that MCTS could face a gap as large as $25.6 million in 2025 without prompt action.
“Policy Forum’s report once again rings the warning bell on Milwaukee County’s fiscal future and the impact it stands to have on residents and communities in every zip code. For the last three years, I’ve worked with the Move Forward MKE coalition to advocate for additional tools to raise local revenues, so we can fix local problems and fund local priorities. We’ve traveled the state speaking with business owners, local elected officials, and others about the need for local revenue reform for one of Wisconsin’s most important economic engines.” said County Executive David Crowley. “Today’s report, coupled with the recent five-year fiscal forecast released by the Comptroller’s office earlier this month, makes it clear that Milwaukee County’s push for additional revenue tools is not a luxury desire, but an absolute necessity for the residents who call our region home.”
Wisconsin Policy Forum’s report, “Detour Ahead,” points to several factors contributing to a nearly $26 million transit system shortfall in 2025 including the depletion of federal American Rescue Plan Act dollars, declining farebox revenues, and stagnant state aids over the last decade. WPF first highlighted a grim MCTS fiscal forecast in 2008, when they warned of impending service cuts without swift action to close future gaps. The last three years of emergency pandemic aid has helped stave-off major reductions to MCTS operations, however those funds are expected to be depleted by 2025.
Detour also highlights the massive challenges the fiscal forecast presents for MCTS’ capital program needs. The Forum forecasts a sizeable $6 million capital budget gap in 2025 due to the depletion of ARPA funds and federal funds specifically designated for operating and maintaining system-wide capital needs.
“In order to be a world-class community that recruits top-tier talent and businesses, we need a world-class transit system. Allowing MCTS to wither away due to a structural gap would be nearsighted mistake with cascading, cross-sectoral ramifications for all of us—setting back the regional economy, exacerbating labor shortages, and worsening education and health outcomes,” said Milwaukee County Transit System President & Managing Director Denise Wandke. “MCTS is preparing a public education and advocacy campaign in the coming days and weeks to sound the alarm on the fiscal future of Milwaukee County. The campaign will include paid advertisements in local media outlets, both print and digitally, encouraging residents to support MCTS by calling their state representatives and urging them to give Milwaukee County the tools it needs to save local services.”
A solution that would generate significant region wide benefits would be to allow Milwaukee to retain a portion of our economic activity via an at least one percent sales tax that can be used to address local community needs.
Since 2019, a coalition of Milwaukee County leaders known as Move Forward MKE have advocated for a solution to Milwaukee County’s dire fiscal forecast that would generate significant region wide benefits. Allowing Milwaukee to retain a portion of our economic activity via an at least one percent sales tax would sustainably generate millions of dollars that could be used to address local community needs.
“The Move Forward MKE coalition isn’t asking the state for a blank check. We’re asking for a tool to generate local dollars to sustainably fund the core functions of government and continue being an asset to the rest of Wisconsin,” concluded Crowley.
To learn more about how an increased sales tax could impact specific municipalities, visit moveforwardmke.com for information about the City of Milwaukee and Milwaukee County.