Milwaukee's 2027 budget proposal would draw $51.8 million from city reserves to balance the books, the highest amount since at least 2016, according to an analysis published this week by the Wisconsin Policy Forum. The report finds Milwaukee is managing its fiscal challenges in the near term but shows mounting signs of financial strain, with borrowing on the rise and spending growth on core city costs exceeding the pace of revenue increases. The Milwaukee Common Council is expected to consider the proposal in the coming weeks.
The proposed budget would raise the property tax levy by 2.0%, adding $6.7 million to bring the total to $343.6 million — half the nearly 4.0% increase adopted for 2026, but similar to hikes from 2022 through 2025. Revenue from the city's 2% sales tax is projected to climb 6%, or $12.7 million, to $218.2 million in 2027. Mayor Cavalier Johnson's plan calls for 6,697.3 full-time equivalent positions for general city purposes, a net reduction of 28.2 positions from the 2026 adopted budget. General city employees would get a 2.0% raise under the proposal. Capital budget spending would grow by 14.5%, though the report notes this will push debt payments higher in future years. If enacted, the budget would result in limited service cuts such as reduced Sunday hours at city libraries.
The report finds Milwaukee's recent fiscal improvements have been driven by outside help: first from federal pandemic aid, then from 2023 Act 12, state legislation that increased state aid to the city and allowed its Common Council to adopt a municipal sales tax. According to the analysis, these developments may not happen again, and the city may be forced to look internally to address budget pressures. The budget manages to avoid cutting filled city positions, but the report warns that in future years, it may become harder to avoid eliminating filled posts and laying off staff.
Milwaukee's fiscal challenges stem from a structural imbalance where core expenses are growing faster than key revenue streams. The city has leaned on increased state aid in recent years, along with local taxpayers' willingness to accept a new municipal sales tax and a higher local vehicle registration fee, to sustain a surge of spending on streets and infrastructure while reducing its unfunded pension liability. But with spending on wages and pension payments outpacing property tax growth, and borrowing increasing to fund capital projects, the city's financial cushion is shrinking. The reliance on one-time reserve draws and external aid suggests the underlying budget gap isn't closing on its own.
The report concludes that given its fiscal outlook, Milwaukee officials may want to find ways to control costs, such as partnering with other local governments. Two promising examples include the city's past collaboration with Wauwatosa on fire and EMS services and Wauwatosa's separate plan with West Allis to merge their fire departments. Without recurring outside help, Milwaukee will need to address the gap between what it spends and what it collects — or risk deeper cuts ahead.