Photo credit: J Ferrer
Milwaukee County Courthouse
Even without replacing Milwaukee County’s nearly 90-year-old Safety Building, local officials would have a hard time keeping their budgetary house in order in coming years. A recent report by the Wisconsin Policy Forum found that the county has anywhere between 12 and 16 buildings that are due for replacement. If the Safety Building could be responsibly ignored, the county’s expenditures on building projects would be on track to more than double to $26 million this year and then increase to $45 million next year. But the Safety Building, which houses court offices and some criminal courts, can no longer be ignored.
With the Safety Building back in the picture, the county’s finances begin to “appear unmanageable,” warns the Wisconsin Policy Forum (WPF). The forum—the product of a merger between the former Public Policy Forum and the Wisconsin Taxpayers Alliance—looked at both the Safety Building and other county buildings in a pair of recent reports: “The Jury is Out,” released in May, and “Cracks in the Foundation,” which was released last September.
The reports come as part of a series meant to get a handle on how much taxpayers will have to pay in coming years for current commitments made by both the city and county of Milwaukee. These include not just buildings but also things like sewers, buses, museums and parks. When looking at the City of Milwaukee, the reports find that, although its obligations might be formidable, they are ultimately manageable. The same cannot be said for Milwaukee County, especially once the Safety Building is taken into account.
Unappealing and Expensive Options
Dating to 1929, the Safety Building bears a singularly inapt name. It still contains asbestos, is often a home to pests, and has poor water and air quality because of various mechanical, electrical and plumbing deficiencies. What’s more, the building’s original use as a jail means it has never had the sort of separate corridors used in most courthouses to keep criminal defendants apart from the general public. People suspected of crimes now move about in the same hallways as jurors, witnesses and lawyers.
But the expected cost of a new building has been a major deterrent to moving forward with the project. The latest WPF report puts the cost of a 374,000-square foot, 10-story replacement structure at between $341 million and $367 million. WPF president Rob Henken said it’s no exaggeration to contend Milwaukee County has reached a crisis point. To meet the county’s needs, local officials now must consider options that might have seemed unappealing in the past.
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“Something has to give here,” Henken said. “Either we have to liquidate assets, pursue more public-private partnerships or take other potentially unpleasant approaches, such as increasing the county’s borrowing limit.”
Perhaps the easiest answer would be for the county to go to the state and ask for additional money. County Board Supervisor James “Luigi” Schmitt, chairman of the county’s finance committee, said the court system is something that Milwaukee County is required by state law to provide. The state does provide some money to help pay for the system’s operations—much of it by simply returning revenue that was raised at the local level—but the cost of putting up and maintaining court buildings falls almost entirely on the county. Schmitt said it shouldn’t be hard to make a convincing argument that the state is under an obligation to do more.
“We are not looking for handouts,” he said. “We are looking for the state to pay the bills and the services that they mandate us to do. We need to say, ‘Here’s our honest bill, and here’s what it costs.’”
One trouble here, though, is that the state is not exactly flush with money. What’s more, many lawmakers will argue they are reluctant to set a precedent that could soon have other counties coming and asking for similar assistance. Schmitt said he’s confident a fair accounting of what Milwaukee County has provided the state and then gotten back in return would be enough to overcome those objections.
Increased Investment, Decreased Return
County Executive Chris Abele said Milwaukee County is now sending more than $400 million more to the state than it was in 2000. At the same time, the amount the county gets back has been decreasing. “Really, all we are asking for is for them to let us keep more of what we are generating,” he said. “But we don’t want to create a new hole in the state budget.”
Should state lawmakers still refuse to help out, Abele said he’s willing to consider other possibilities and added that a private partner might need to be found. Although perhaps not as clean-cut as getting help from the state, a public-private partnership might be the only way the county can raise the kind of cash needed to replace a structure as large as the Safety Building.
And there have been precedents in Wisconsin. The City of Milwaukee, for instance, has used private partners to help it rebuild local libraries. The resulting buildings have often been mixed-use, with their lower floors used for the circulation of books and media, and the upper floors turned into apartments. Abele acknowledged that it would be hard to imagine a building that would house both criminal courts and residential units. Still, he said, local officials are unlikely to be able to get out of their current dilemma without some bold thinking.
Abele said the county is severely constrained in what it can raise in other ways. State limits prevent it from raising property taxes by any significant amount from year to year. And other sorts of local taxes are either not allowed under the law or are extremely unpopular politically.
Abele himself has struggled to get the county to adopt a $60-a-year wheel tax, an amount he says is needed to contend with the deficits officials face every year at budget time. Beyond that, he said, local officials have very few other ways of raising money—all of them are likely to be equally unpopular.
Could county officials have done something in previous years to have kept themselves out of this current dilemma? Henken said most of the choices that have been made over the years were made for the right reasons.
Reluctance to Borrow
County officials were reluctant to increase local borrowing by a large amount in any given year for fear of endangering the county’s good bond ratings. The result was that projects were pushed off time and again.
One step officials might have taken would have been to reconsider a self-imposed rule requiring the county to cash finance 20% of its debt. By lowering that requirement (which, after all, is only an arbitrary number) at times when interest rates were low, the county might have been able to make more of its constrained borrowing capacity.
Still, Henken said, it’s hard to point a finger at any one person or group of officials and say that he, she or they are responsible for the fix the county is now in. He credits the county for making difficult decisions in recent years to reduce the county’s capital-project obligations. The county, for instance, moved out of the City Campus in 2015—a three-building complex on the city’s northwest side that had once held government offices. The county’s employee headcount has also gone from roughly 11,000 down to about 4,400 over the years. Henken said the future most likely holds more choices of the same kind, but ones that will quite possibly be even harder to make.
“Can the county afford a park system as extensive as it is today?” he asked. “Can county government continue its current level of support for things like the Milwaukee County Zoo and Milwaukee Public Museum and the Marcus Center for the Performing Arts? These are things nobody wants to contemplate. But the financial realities tell us that we are getting to that point.”
