{"id":3518,"date":"2023-06-04T05:04:37","date_gmt":"2023-06-04T05:04:37","guid":{"rendered":"https:\/\/wifamily.news\/?p=3518"},"modified":"2023-06-15T15:25:17","modified_gmt":"2023-06-15T15:25:17","slug":"milwaukee-gets-credit-downgrade-ahead-of-pension-spike-shared-revenue-deal","status":"publish","type":"post","link":"https:\/\/wifamily.news\/?p=3518","title":{"rendered":"Milwaukee Gets Credit Downgrade Ahead of Pension Spike, Shared Revenue Deal"},"content":{"rendered":"

This post originally appeared at https:\/\/wisconsindailystar.com\/news\/milwaukee-gets-credit-downgrade-ahead-of-pension-spike-shared-revenue-deal\/tcsquare\/2023\/06\/04\/<\/a><\/p>\n

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by Benjamin Yount<\/h5>\n

\u00a0<\/p>\n

Milwaukee\u2019s looming fiscal cliff and the lack of an agreement on shared revenue at the Wisconsin Capitol have earned the city a credit downgrade.<\/p>\n

Fitch Ratings on Wednesday downgraded Milwaukee\u2019s credit from A to Triple-B+, with a negative outlook.<\/p>\n

\u201cFitch\u2019s downgrade \u2026 reflects the city\u2019s large and growing structural budgetary imbalance driven by statutory revenue-raising constraints, escalating municipal cost pressures, especially for pensions, and reliance on state shared revenue that has not kept pace with inflation,\u201d Fitch\u00a0wrote in a report<\/a>\u00a0announcing the credit downgrade.<\/p>\n

Fitch added that Milwaukee has $90 million in obligations that are due, and there\u2019s no clear plan on how to pay for that debt.<\/p>\n

\u201cFitch believes the city\u2019s flexibility of main expenditure items is limited. Carrying costs for long-term liabilities claim a large and growing percentage of the governmental fund spending. While the city operates within a fairly flexible labor environment, the natural pace of spending is expected to be well above that of stagnant revenue growth, primarily driven by rising pension costs,\u201d Fotch wrote.<\/p>\n

Milwaukee\u2019s pension payment is set to spike in the next budget, and city leaders have made it clear that Milwaukee could be bankrupt by 2025 if state lawmakers don\u2019t agree to share more money with them, and allow Milwaukee to raise its local sales tax.<\/p>\n

But Fitch said even a deal on shared revenue may not be enough.<\/p>\n

\u201cThe recently proposed state legislation boosting local funding may not be sufficient to minimize the budgetary imbalances in the near-term, forcing the city to make meaningful cuts to public safety service delivery to close a sizable budget gap estimated at approximately 21% of spending,\u201d Fitch wrote. \u201cReserves are currently healthy providing some cushion to the city but are largely attributable to non-recurring measures including note proceeds and stimulus that could quickly deteriorate absent significant structural budgetary enhancements.\u201d<\/p>\n

That echoes a report from Wisconsin Policy Forum last fall that said Milwaukee was using left-over coronavirus stimulus money to pad-out its budget.<\/p>\n

\u201cJohnson\u2019s 2023 budget proposal would tap $81.1 million of the city\u2019s total $394.2 million allotment of ARPA funds. Nearly all would go toward operational costs within the Milwaukee Fire Department, supporting 470 sworn fire department positions,\u201d\u00a0the Policy Forum report<\/a>\u00a0explained. \u201cOnce the federal funds are spent, the potential need to cut all of those positions or substitute others across all city departments \u2013 as well as perhaps cut hundreds more as inflation and pension payments rise \u2013 would produce severe reductions in services that a city with Milwaukee\u2019s vast needs arguably cannot afford to endure.\u201d<\/p>\n

\u2013 \u2013 \u2013<\/p>\n

Benjamin Yount is a contributor to The Center Square.
\nPhoto \u201cMilwaukee\u201d by Michael Barera<\/a>. CC BY-SA 4.0.<\/em><\/p>\n

\u00a0<\/p>\n

The post Milwaukee Gets Credit Downgrade Ahead of Pension Spike, Shared Revenue Deal<\/a> appeared first on The Wisconsin Daily Star<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

This post originally appeared at https:\/\/wisconsindailystar.com\/news\/milwaukee-gets-credit-downgrade-ahead-of-pension-spike-shared-revenue-deal\/tcsquare\/2023\/06\/04\/ by Benjamin Yount \u00a0 Milwaukee\u2019s looming fiscal cliff and…<\/p>\n","protected":false},"author":15,"featured_media":3495,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[],"class_list":["post-3518","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-wi-daily-star"],"_links":{"self":[{"href":"https:\/\/wifamily.news\/index.php?rest_route=\/wp\/v2\/posts\/3518","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/wifamily.news\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wifamily.news\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wifamily.news\/index.php?rest_route=\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/wifamily.news\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3518"}],"version-history":[{"count":1,"href":"https:\/\/wifamily.news\/index.php?rest_route=\/wp\/v2\/posts\/3518\/revisions"}],"predecessor-version":[{"id":3519,"href":"https:\/\/wifamily.news\/index.php?rest_route=\/wp\/v2\/posts\/3518\/revisions\/3519"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/wifamily.news\/index.php?rest_route=\/wp\/v2\/media\/3495"}],"wp:attachment":[{"href":"https:\/\/wifamily.news\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3518"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wifamily.news\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3518"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wifamily.news\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3518"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}