Weekly Fiscal Facts are provided to Wisconsin NewsMedia Association members by the Wisconsin Policy Forum, the state’s leading resource for nonpartisan state and local government research and civic education. The Wisconsin Policy Forum logo can be downloaded here.
The 2027 budget proposal shows the city of Milwaukee is managing its fiscal challenges, calling for limited service cuts and a property tax levy increase below the rate of inflation. Mayor Cavalier Johnson’s proposal also would sustain a surge of spending on streets and infrastructure while reducing the city’s unfunded pension liability.
This is due in no small part to increases in state aid in recent years, as well as the willingness of local taxpayers to shoulder a new municipal sales tax and an increased local vehicle registration fee.
Still, signs of strain on Milwaukee’s finances are building and on display in the 2027 budget, according to the Wisconsin Policy Forum’s annual brief on the proposed spending and tax plan. The Milwaukee Common Council is expected to take up the proposal in the coming weeks.
The report finds city borrowing has risen in this budget, and it increasingly relies on reserves to close
shortfalls. Moreover, spending growth on core city costs such as wages and pension payments is exceeding the rate of increase in key city revenues such as the property tax.
In recent years, Milwaukee’s fiscal woes have been helped by outside sources: first from federal aid during the pandemic, then by 2023 Act 12, the state law that boosted state aid to the city and
authorized its Common Council to vote to adopt a municipal sales tax. These developments may not
recur, and moving forward, the city may be forced to look within to solve its budget pressures.
The 2027 budget proposal would increase the property tax levy by 2.0%, or $6.7 million, bringing the budgeted total to $343.6 million. This would be half the nearly 4.0% that was adopted by the city council for 2026, but similar to increases from 2022 through 2025. Meanwhile, 2027 revenue from the 2% city sales tax is projected to increase by 6%, or $12.7 million, to $218.2 million.
General city employees would receive a 2.0% raise in the proposed budget. In total, the mayor’s proposal includes 6,697.3 full-time equivalent positions (FTEs) for general city purposes, which would be a net decrease of 28.2 FTEs from the 2026 adopted budget.
If enacted, the budget would result in limited service impacts such as reduced Sunday hours at the city libraries. The budget does manage to avoid painful cuts to city positions that are filled. But in future years, it may become increasingly difficult to avoid eliminating filled posts and laying off staff.
Milwaukee’s capital budget spending would grow by 14.5% under this budget. While the city’s physical infrastructure is in need of investment, it’s worth noting that will cause the city’s debt payments to rise in the future. In a sign of mounting pressure on Milwaukee’s finances, the budget would draw a total of $51.8 million from city reserves, the most since at least 2016.
The report concludes that in light of its fiscal outlook, Milwaukee officials may wish to look for ways to control costs, such as working with other local governments. Two promising examples of that include the city’s past efforts to work with Wauwatosa on fire and EMS services and Wauwatosa’s separate plan with West Allis to merge their fire departments.
This information is a service of the Wisconsin Policy Forum, the state’s leading resource for nonpartisan state and local government research and civic education. Learn more at wispolicyforum.org.
