Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Budget Forecast topic
No spam. Unsubscribe anytime.
Milwaukee County comptroller warns structural deficit will average $34.3 million annually over five years
Summary
Comptroller CJ Paul presented a five-year financial forecast showing expenditures growing faster than revenues, driven by wages, benefits and a 2026 debt-service spike tied to new bonds; county leaders discussed trade-offs between spending cuts and limited revenue options.
CJ Paul, financial services director in the Milwaukee County Office of the Comptroller, told the county finance committee that “the key takeaway really is that even with recent state law changes, expenditure growth continues to exceed revenue growth at the county.” The forecast, which covers fiscal years 2026–2030, projects average annual expenditure growth of about 3.5% while revenues grow about 1%, producing an average structural deficit of $34,300,000 per year over the five‑year period.
Why it matters: The gap is driven primarily by higher salary and overtime costs, health‑care inflation and a large debt‑service increase in 2026 tied to recently approved capital projects. Paul said the 0.4% sales tax enacted in 2024 provided roughly $50 million in property‑tax relief but is insufficient to close the projected structural gap without additional long‑term measures.
Forecast details: Paul said pension expenditures are expected to decline modestly as some employees shift from ERS to WRS, but debt service jumps by about $14.7 million in 2026 “to account for our debt service coming online for the new museum, as well as bonding for projects that were previously approved.” He told the committee the forecast assumes current allocations of sales‑tax revenue continue (paying down unfunded actuarial accrued liability, POB payments and ERS normal cost), which would direct an additional $25 million to the UAL over five years.
Drivers and risks: Committee discussion focused on three main drivers: (1) compensation growth — the comptroller’s model assumes about 3.8–3.9% annual salary growth on a higher base because of recent raises, compensation study adjustments and higher starting wages; (2) overtime, which reached a record $26.1 million in 2024; and (3) medical and pharmacy inflation, for which the office used conservative assumptions (roughly 8% medical, 11% pharmacy) in the forecast. Joe Lamers, director of the Office of Strategy, Budget and Performance, said the county cannot afford sustained salary growth at the forecasted rates without adjusting either salary policy or the number of funded FTEs.
Options discussed: Paul and Lamers told supervisors the county has two broad choices: reduce total expenditure growth or find ways to increase revenues (noting state and federal revenue growth is assumed flat in the model). They said realistic approaches will combine spending restraint and revenue strategies. Supervisors asked staff to provide prior forecasts (pre‑sales‑tax) so members can compare scenarios and to quantify the sales tax’s net benefit versus earlier projections.
Next steps: The comptroller’s office and the Office of Strategy, Budget and Performance will provide additional comparisons and respond to supervisors’ questions as the 2026 budget process begins. Committee members emphasized the need to identify specific levers — personnel, benefits, program changes and state advocacy — to narrow the forecasted gap.
