Milwaukee Mayor Ignores Pension Bomb in Final City Budget

Milwaukee Mayor Tom Barrett on Tuesday unveiled his $1.75 billion spending plan for next year. The mayor was nominated to be ambassador to Luxembourg, but it's unclear when the U.S. Senate will take-up his nomination.

(The Center Square) – Milwaukee Mayor Tom Barrett appears ready to head for Luxembourg without addressing Milwaukee’s looming pension crisis.

Most of the headlines about the plan focus on Barrett’s plans to hire nearly 200 new police officers. But critics say the headline writers, and Barrett himself, are largely ignoring Milwaukee’s pension costs.

Barrett is relying on a tax levy increase, as well as millions of dollars in federal money to try and balance Milwaukee’s budget.

“They’re clearly not doing nearly enough to set aside money right now for the massive bill about to come due,” Badger Institute President Mike Nichols told The Center Square. “This is going to be a tsunami.”

Milwaukee’s pension payment is currently $71 million. It is set to jump to $150 million in 2023. Barrett set aside only $10 million for Milwaukee’s pension savings.

"The looming challenges are ominous,” the mayor said during his budget address.

Barrett acknowledged the coming storm.

“They should also be asked whether they now see the benefit of Act 10. Without  Act 10 – which barred Milwaukee from continuing to pay the employee share of pension contributions for many local  government workers – this situation would be even worse for the city,” Nichols added.

Milwaukee is facing a pension crisis because it didn’t contribute anything to its pension system for years. Mayor Barrett changed that in 2004, but his “smoothing formula” expires in 2023, and the costs are anticipated to skyrocket.

Barrett says the goal in his current budget is to avoid any layoffs.

Milwaukee has tried to lower its pension costs over the years by allowing police officers and some other city workers to retire without filling their jobs.

“Tom Barrett is surely hoping he ends up in Luxembourg,” Nichols said. “But every candidate interested in his job should be asked first and foremost how they’re going to address this.”

Nichols said Barrett’s goal with this budget is simpler than that.