Editor’s note: Milwaukee County Treasurer Dan Diliberti presented to Elizabeth Coggs, chair of the Milwaukee County Board’s Finance and Audit Committee, a budget alternative for consideration for the 2010 Budget. He stated that Milwaukee County can no longer afford to fund the Transit System with property taxes and detailed his proposal in a letter to the chair as follows:
Our Treasurer’s Office and the Finance Committee are faced with different sides of the same coin when it comes to the current recession. My office is facing tax delinquencies and foreclosures for increasing numbers of households that cannot afford to pay property taxes which continue to increase in the midst of a recession. Meanwhile, your committee is faced with decreasing property tax and sales tax revenues amidst a time of increasing demands for services. As the recession continues, the Finance Committee struggles with more and more difficult service reductions, like the one that took place last night for Paratransit riders.
Because of the continuing impact of the recession – conditions that may last for several more years – this morning I presented to you for your committee’s consideration a bold move to both preserve transit and reduce property taxes.
As you well know, Milwaukee County voters approved a ground-breaking referendum to implement a dedicated sales tax for transit funding in 2008. That proposal was passed by the Legislature, but later vetoed by the governor. The governor has now put his own alternative proposal forward, and it is pending before the Legislature.
Meanwhile, the state has imposed a property tax cap in Milwaukee County because the Legislature has determined that property taxes are too high relative to comparable-sized counties in other states.
This puts Milwaukee County in a tremendous bind.
Apparently, some people in state government want to have it both ways. However, the state cannot complain about high local property taxes unless it takes action to remove transit from the property tax roll. That move alone would save Milwaukee County property taxpayers $18 million.
The roots of the recently passed referendum for dedicated transit funding go back to 1975 when, facing inaction by the state, Milwaukee County rescued a bankrupt private transit system by raising annual property taxes to assure that busses would continue to run here.
However, almost 35 years later and further restricted by a state-imposed property tax freeze, Milwaukee County has run out of transit-funding options. Bus fares have been increasing for the last seven years, and are now among the highest in the nation. While the county has reduced transit service 16.7 percent, it has increased fares by 33 percent over this same period. Independent analyses show that if Milwaukee County continued as the transit operator, the bus system would soon face dramatic fare increases, drastic cuts in service, and eventually be bankrupt.
In the short run, if Milwaukee County continued to finance transit while laboring under state tax freeze rules, funding would only come at the expense of drastic cuts to county parks, dangerous cuts in courts and public safety operations, reductions in mental health services and costly deferred maintenance throughout the county.
Milwaukee County is the last major urban area in the country to fund transit with property taxes. Yet, Milwaukee County cannot legally change that funding formula on its own because state statutes prohibit counties from creating a dedicated funding mechanism for transit.
Milwaukee County has done everything possible to remove this burden on Milwaukee County property taxpayers. The county has worked with legislators to devise legislation that was approved by the Legislature. The county has borrowed money to purchase needed replacement busses and equipment. The county has raised user fare levels to the highest in the nation.
Now the county has run out of options and money.
But a solution is at hand. Passage of legislation currently pending before the Legislature would create a Regional Transit Authority (RTA) with a dedicated funding source. Passage of that legislation is critical, because the current recession has put Milwaukee County in a fiscal crisis. Milwaukee County cannot afford to subsidize inaction by the state legislature.
The creation of an RTA is a state – not a county – responsibility, and the state has delayed taking action on this important issue for far too long. The need for an RTA was discussed back in 1975 when the county took over the bankrupt private transit system.
Local civic leader Jack Pelisek championed stalled State legislation back in the mid-90’s. However, continued state inaction on this issue is a luxury we can no longer afford.
The state needs to stop passing the buck on this issue and take responsibility for creating an RTA. It is up to them to decide either to do nothing and condemn mass transit to a sure death in this region, or to create and fund an RTA to provide an efficient and effective transit system for this metropolitan area. Only the state – not the county – can do this. Only the State has the authority to create an RTA.
The Public Policy Forum, the Southeast Wisconsin Regional Planning Commission, the Greater Milwaukee Committee, the Metropolitan Milwaukee Association of Commerce, and editorial boards of major media have all supported the creation of an RTA.
That is why I am asking the Finance Committee to consider whether Milwaukee County can responsibly continue to fund local Mass Transit beyond July 1, 2010 – the start of the new state fiscal year?
If the Board were to take action to limit county funding to the first six months of 2010, Milwaukee County would be making a similar statement that the private transit operator did in 1975 – that we have run out of options.
We have reached a crisis point and no one but the State can save our transit system. If Milwaukee County limited its transit funding to the first half of 2010, it would be a clear message that the state must deal with its responsibility to establish an RTA with a dedicated funding mechanism.
The crisis in funding the Milwaukee County Transit System has reached the point that it is an RTA or bust. It is time for the state to step up to the plate and take an action that every other state with a large urban county has already done. The State of Wisconsin must take action in order to preserve transit in this region.
I have added my voice to Milwaukee County, civic, business, labor and community groups that have already joined forces to lobby for the state to take action. The state legislature needs to understand that the only viable way to preserve mass transit in this metropolitan area is to create an RTA financed with a dedicated funding source. Absent this action, mass transit will face a rapid decline and certain death in this region.
Public Transit is essential to our economy, but it cannot survive in Milwaukee County without an RTA.
I would like to add one other recommendation. If an RTA with a dedicated funding source were created, in order to provide real and direct property tax relief, the State Legislature should also include a corresponding reduction in the current Milwaukee County Property Tax Cap. Accordingly, if enacted, the current State imposed Milwaukee County Property Tax Freeze amount would be reduced by the amount (approximately $18 million) of Milwaukee County property taxes currently allocated to the Milwaukee County Transit System.
Daniel Diliberti is the treasurer of Milwaukee County.