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Thu, 10/01/2009 - 4:22pm — Executive Director
Milwaukee Sentinel, September 26, 2009

Rock, hard places and no give at all

Wisconsin's method of financing local government is unsustainable. The coming train wreck will gut services and diminish quality of life.
Posted: Sept. 26, 2009

"Between a Rock and a Hard Place" is the title of the nonpartisan Public Policy Forum's recently released report on the City of Milwaukee's fiscal condition. Coincidentally, it is also the title Wisconsin Counties magazine chose for a package of articles on the 2010 budget prospects for county governments in its August issue.

It's an apt description; these are indeed hard times for the state of finances for county and local governments in Wisconsin, and it's not just because of hard economic times.

The system is broken, and fundamental changes are needed in the way local governments are financed in Wisconsin. Yes, waste and mismanagement are also factors, but the problems are both structural and systemic.

This requires a legislative debate, with fundamental questions that start at the state level. Which services should government be providing, which taxes should pay for which services and where can governments share services or consolidate to achieve greater efficiencies? Needed: a deliberate state strategy to address those issues.

That means leadership from legislators, most of whom, judging from their actions and inactions, fail to meaningfully acknowledge the problem. Milwaukee-area legislators in particular should have a special interest in the issue. And it should be a critical part of the debate in next year's gubernatorial race.

More information is always helpful, but these issues have been studied and discussed; potential answers have been suggested. It's time for the discussion to move to the Legislature, the governor's office and the campaign trail - to people who can act - to figure out which solutions will work and then to implement them.

The gist of the forum's report is that Milwaukee is "on the precipice of serious fiscal and programmatic disorder." It's not there yet, but it's looming like an iceberg. A panel of speakers on Monday at a conference held by the forum stressed the same theme. And another report by the forum on Milwaukee County earlier this year argued that the county is in even worse shape.

And the budgets presented last week by Milwaukee Mayor Tom Barrett and Milwaukee County Executive Scott Walker show in some detail just how bad things are getting.

In Madison, the Wisconsin Way coalition has been hammering on the same themes regarding the formula by which state and local governments are financed.

Revenue streams, starting with federal aid and continuing through a long-term freezing of state shared revenue, are declining. That's the rock. Rising costs, especially for pension and health care benefits, are the hard place.

But the state has its own financial problems, as witness the past several state budgets, and a lack of sufficient federal aid is hurting everyone. The forum and the Wisconsin Way folks agree that the state funding system is no longer sustainable and that dramatic cuts in service will be inevitable if changes aren't made. We concur.

Solutions could include giving local governments more options when it comes to revenue streams, such as a local sales tax. Or it could mean consolidating or sharing services in a state where there are simply too many layers of government. These aren't new arguments: The Kettl Commission made similar points years ago, but no legislator or governor has had the political courage to suggest fundamental change.

Maybe there is a strategy, but it's a strategy by neglect: Starve local governments enough, and they'll be forced to consolidate or make other changes. No one has actually worked out a long-term plan or debated the consequences.

The conversation at the Legislature can start with whether local governments should be empowered on the issue of sales taxes. It's not a silver bullet - particularly in a state whose residents already pay too much in property tax - but between a rock and a hard place, something has to give. The hits can't all come from the service side.

The Milwaukee delegation especially needs to start taking a leadership role on these fundamental questions.

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