Tuesday, September 01, 2009

The City of Milwaukee and General Motors: Obamawaukee?

Public Policy Forum released a report, and it's not lookin' good for the City of Milwaukee.

With costs rising for public safety and employee benefits, the state's largest city is running out of options to pay its bills, the Public Policy Forum reports. State aid has been stagnant for more than a decade, city officials are nearing the limits of how much they can raise fees and draw from reserves, and Milwaukee is already relying more on property taxes than most other major U.S. cities.

Unless the state gives the city more ways to raise revenue, elected officials could face increasingly difficult decisions about slicing into cherished services, the report warns. Spending is already down on libraries, health care and development efforts, while police and public works budgets are up.


"The way we finance municipal and county government in the state of Wisconsin is broken right now," said Henken, whose organization issued a similar report on Milwaukee County finances in March. That report found the county is heading for massive deficits without major structural change in the next few years.

Henken, a former county official, said: "The City of Milwaukee is where Milwaukee County was six or seven years ago. They're on the precipice."

It would be just as accurate to describe the City's position as that of General Motors (GM) in the 1990's. At that point, GM was being slowly shredded by the competition, which enjoyed less labor costs, less pension costs, and no 'legacy costs' of old plant and equipment.

GM, like the City of Milwaukee, was operating on the assumption that the money-gusher of the '50's and '60's would never diminish. Revenues would always go up to meet costs, no matter what costs were added. Thus, the additions were always made (or granted, as the case may be.)

It took ten more years or so for GM to hit the iceberg and become ObamaMotors.

How long before Milwaukee becomes Doylewaukee? Or Obamawaukee?

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