Milwaukee Biz Blog

editor's note: Acting Milwaukee County Executive Lee Holloway gave the annual State of the County Address on Wednesday at the Milwaukee County Mental Health Complex in Wauwatosa. The following is a transcript of his remarks:

Ladies, gentlemen, county supervisors, elected officials and distinguished guests, it is my honor to present the 2011 State of the County address.
I’d like to begin by thanking the wonderful staff of the Mental Health Complex and St. Charles. Hosting an event like this takes a lot of work. I appreciate all the effort you have put in to making this event a success.

At this time, I am pleased to report to you that the state of Milwaukee County is sound. Our airport is more popular than ever, we have made major decisions that will improve our long-term fiscal health, and we have a plan to revamp mental health care.

There’s no doubt that a new chapter in County government is before us. We have a historic opportunity to reinvent Milwaukee County by:

• Reducing the tax levy

• Becoming more self-sufficient, with less dependency on shared revenue

• and fostering business growth and regional cooperation

I am optimistic that we can achieve our goals in 2011. The path to success for Milwaukee County includes five key steps:

• Creating jobs

• Tackling our structural deficit

• Reducing duplication in government

• Reshaping the way transit and parks are funded

• and Developing a new mental health care model

We will use a variety of strategies to carry out this vision. I’d like to briefly touch on each of these areas:

Increasing employment is my biggest job as county executive. One of the largest drivers of jobs is General Mitchell International Airport. We have non-stop flights to 56 cities, and we’re continuing to grow. In 2010, nearly 10 million people traveled through our airport. That’s 24 percent higher than 2009. In fact, in the 2nd quarter, we were the fastest growing airport in the U.S. and the third-fastest growing in the world. It’s clear that airlines see Milwaukee County as a prime spot to do business.

Frontier and AirTran have established vibrant hubs here, and Southwest has made a successful entrance as well. I’d like to thank Board Chairman Michael Mayo for his leadership at the airport, along with Barry Bateman.

Another jobs-creation idea that I’m working on has to do with items that are purchased by Milwaukee County. We spend $60 million each year on goods and services. I am proposing that we set-aside $15 million of this purchasing power for small businesses in Milwaukee County to create jobs and keep the dollars in our community. We are focusing on small businesses with less than 50 employees. We all know that small businesses are the engine of job creation.

We heard in the campaign for governor that “people create jobs, not government.” But let’s not forget that government can play a key role in helping small businesses thrive. That’s why I have offered to help the Milwaukee Transitional Jobs Collaborative to provide subsidies to local employers to get people working. This is similar to the federal CETA (Comprehensive Employment and Training Act) program, which was extremely successful in the 1960s and 70s. We must encourage businesses to utilize this transitional jobs program.

Another area that needs attention is the Park East land owned by Milwaukee County. That’s why I support the MSOE (Milwaukee School of Engineering) project. This is an opportunity to create family-supporting jobs and provide needed parking downtown.

The sale of Park East land can also make federal dollars available for transit needs. I am working to make these funds available to connect workers with jobs in Ozaukee, Waukesha and Racine counties.

Another major priority is securing the County’s financial future and tackling the structural deficit.

We have already made major progress. In the last 20 years, the county workforce has shrunk from more than 9,000 employees to just over 5,000. We have also adopted a number of reforms to reduce the pension and health care burden on our taxpayers.

Despite what you may see or hear in the media, we have been making full payments to our pension fund. The most recent data shows that our pension fund is more than 93 percent funded, higher than the national average of 75 percent, and we have been making full payments to the fund. Thank you to the County Board for making this happen.

Some of you questioned the pension obligation bonds (POBs) approved by the County Board in 2009. Today, I can report that we are well on track to reaching our goals. Thanks to market returns of 22 percent in 2009 and more than 12 percent in 2010, we are on track to save $240 million. This was a good financial decision and will yield true savings for the taxpayer. The board delayed the issuance of POBs until 2009. Had the board not pushed for that delay, we would be in a world of hurt after the stock market downturn of 2007. Thanks again to the County Board for avoiding this disaster.

In 2006, I was responsible for launching a private-sector model to lower employee and retiree health care costs. Since the Employee Benefits Division was created under this model, Milwaukee County has saved more than $130 million in health care costs. This made a significant dent in the County’s structural deficit. Once again, the County Board played the key role.

The bottom line is that the county’s finances are strong. We are maintaining our A bond rating. Once again, two of the county's three bond rating agencies have indicated that our finances are stable. This is a key factor in lowering our capital costs.

Another major initiative I have undertaken is seeking partnerships with municipalities. As a member of the Intergovernmental Cooperation Council (ICC), I have been exploring ideas that are mutually beneficial to municipalities, such as partnering on employee health care, information technology, and infrastructure needs. For instance, six different municipalities plow snow on 76th Street. That’s not the most efficient way to do it. People don’t care who plows the street…they just want it plowed.

We’re looking at ways to provide these services better, and I’d like to thank the chairman of the ICC, Franklin Mayor Tom Taylor, for exploring these options with me. It’s clear to me that the best way to reduce duplication is to work together. Milwaukee County can achieve efficiencies that individual municipalities may not be able to achieve on their own. Public Works Director Jack Takerian and Information Technology Director Laurie Panella are playing key roles in this process.

Social services are vital to the quality of life in Milwaukee County. We spent $200 million on mental health care last year. I am pleased to be here, at the Mental Health Complex, to report to you that major progress is being made to revamp mental health.

I have introduced a new initiative to redesign how we provide mental health services. By transitioning to a private-sector model featuring 16-bed community-based facilities, we can lower our costs dramatically, pull in more federal dollars, and provide better care. Today, I ask the County Board to support this pilot program. There is no better time than now to lay the groundwork for this significant change. I thank Supervisor Joe Sanfelippo for agreeing to chair the new Behavioral Health Facility Study Committee. He is helping me keep an eye on the ball as we seek to build smaller facilities.

I am also excited to announce that today I am appointing a new Mental Health Administrator, Michael Thomas. Please stand. Michael has 35 years of experience and has agreed to come back to Milwaukee County from New York City. I thank him for taking on this challenge.

The Milwaukee County Transit System is one of the last urban systems in the nation that still relies on local property tax dollars. This is a fragile funding source, and I am not giving up the fight to identify dedicated funding and lower property taxes. While a sales tax solution was approved by 52 percent of Milwaukee County’s voters, it was vetoed by the previous governor.

Today, I ask Governor Scott Walker to give the voters what they asked for. Give us dedicated funding to lower property taxes and fully fund transit, parks, and EMS.

I am exploring other options, including the possibility of redirecting the rental car fee approved for the now-defunct SERTA (Southeastern Regional Transit Authority), and instead use that revenue to fund our bus system. We must effectively connect workers with jobs. Continued cuts to transit are unacceptable.

We must also continue to invest in our cultural and recreation gems, including the Public Museum, the County Zoo, and the Marcus Center. These are major assets. Last year, Milwaukee County Parks won the gold nedal for parks management. Much of this is due to the creativity of Parks Director Sue Black and her team. Thanks, Sue. We’ll have to get even more creative to keep on this great path. By brainstorming with local stakeholders, we can get even more ideas to generate revenue for parks.

We need your ideas and suggestions on how we can improve Milwaukee County. That’s why I put together a large and diverse transition team. A number of those individuals are here today. Please stand and be recognized. Thank you for your service.

This committee of community leaders and stakeholders is active and ambitious. They are dedicated to providing expertise through April 5th and beyond. A number of great ideas have already emerged from these transition meetings.

Milwaukee County is going through tremendous change this year. Because of these changes, I have taken steps to ensure that we have a steady hand leading this county through the April elections.

Although I have been serving as county executive since late December, I will continue to advance these ideas whether I am county executive or chairman of the board.

It has been a pleasure to serve as executive of this great county. I love Milwaukee County, and I am doing everything I can to collect information and make the best decisions possible. Earlier this week, I appointed Marvin Pratt to serve as interim county executive. I do not take this appointment lightly, and that’s why I selected someone with extensive experience in public policy, management and local government. I am confident that he will do an excellent job in this capacity. I ask the board to approve this appointment unanimously on February 3rd.

In the meantime, upon confirmation of this appointment, I will return to my leadership position as chairman of the County Board. But I will work closely with the interim county exec to ensure county government continues to run effectively and efficiently.

As county executive, I have learned even more about our great county workforce. These unsung heroes do a lot with very little. They perform thankless jobs for modest pay and have made significant sacrifices during the last several years.

Finally, I’d like to talk about seniors and youth. Milwaukee County has more than 150,000 people over age 60. We are nationally recognized as a great place to grow old. The Department on Aging allows seniors to live more independently. 40,000 people enjoyed our terrific Senior Center programs last year. Next week, 16 seniors will graduate from the first-ever Milwaukee County Senior Ambassador Program. Director Stephanie Sue Stein tells me that two more classes will graduate this year. Thanks for all your hard work, Stephanie. We honor our seniors for giving us so much. It is our duty to give back to them.

Many of you know I also have a soft spot for the children of our community. Back in 2003, I founded the Safe Alternatives for Youth program, which has awarded more than a hundred mini-grants to organizations that target young people who are at-risk in our community. The County Board provided $150,000 in several budgets to make this happen. I thank Dr. Joan Prince from UWM for her leadership in making this a reality. So far, the lives of more than 4,000 children have been touched in a positive way. Milwaukee County should be a place where young people can grow up to raise families and build careers.

As we wrap up this afternoon, I ask all county employees to continue to focus on customer service and making Milwaukee County an outstanding place to live. I envision a Milwaukee County that is prosperous, develops employment opportunities for all people, and provides an unmatched quality of life. With your help, we can reach these goals together.

Thank you all, and God bless.

The higher passenger counts at Milwaukee County’s General Mitchell International Airport are no mistake. Sound oversight from Milwaukee County, and particularly the County Board, have delivered measurable results.

Today, Mitchell International is America’s true low-fare hub. Mitchell became the fastest growing airport in the nation beginning in the fourth quarter of last year, and the nearly 40 percent increase in the first quarter of this year continues that trend. The level of passenger growth at Milwaukee is unheard of in today’s air transportation industry.

Our success should be credited to those who provide policy direction and administration for the airport, including Supervisor Michael Mayo Sr., chairman of the County Board’s Transportation, Public Works & Transit Committee, and airport director Barry Bateman. They are both doing a wonderful job.
Credit should also go to AirTran Airways, Republic Airways (Midwest and Frontier) and Southwest Airlines, which have all added service during the past year. AirTran recently established a hub in Milwaukee, second only to Atlanta. Republic is moving maintenance jobs here and expects to grow its Milwaukee hub further.

Milwaukee County’s success in operating this airport demonstrates why it would be a bad idea to lease airport operations to an outside vendor.  Mitchell International uses no property tax dollars in its operation, and all revenues generated from passengers and airlines are used to maintain and improve the airport. A private operator, however, would keep profits and could put additional cost burdens on both passengers and airlines, which cannot sustain additional financial obligations in the current economic environment. A plan to privatize Chicago’s Midway Airport last year failed to get off the ground.

Much of Mitchell Airport’s success in attracting record numbers of flights and passengers is due to the affordability of both fares and parking at the airport, as well as more frequent flight schedules. Transferring operation of the airport to a private operator, which would require federal approval, could lead to reduced flight schedules, increased parking costs and higher fares for users of the airport.

I am proud that Mitchell International is doing so well. The increase in passengers is astonishing. Competition, along with steady oversight from Milwaukee County, are key reasons for Mitchell’s success. The County Board is effectively managing the growth of our airport. I am pleased that attempts to lease the airport to a private firm have been unsuccessful, because we may not have seen the same results.

 

Lee Holloway is chairman of the Milwaukee County Board of Supervisors.

Editor's note: President-elect Barack Obama has asked state and local governments to make requests for key infrastructure projects that could receive federal funding as part of his economic stimulus plan. Wisconsin Gov. Jim Doyle and Milwaukee Mayor Tom Barrett, both Democrats have provided their "wish lists" to the Obama administration. Milwaukee County Executive Scott Walker said he will not seek funding for projects in Milwaukee County. County Supervisor Lee Holloway, chairman of the county board, wrote the following letter about the subject to Walker Wednesday.

 

Subject: Federal stimulus request necessary for Milwaukee County
Scott,
You are out there all alone on this issue. Many other Republicans and Democrats across Wisconsin are submitting requests for the upcoming federal stimulus package. Do you actually want 71 other counties in Wisconsin and 49 other states to enjoy stimulus funds that are going to be spent whether you are included or not? Based on your comments that I have observed from multiple media outlets, you apparently believe the following:

• We have an unemployment rate that is among the highest in the Nation, but we don't need any stimulus money.
• For nearly seven years, your strategy involves shrinking Milwaukee County government to the point where it nearly kills almost every public service from Transit to Parks, from Justice to Public Safety, and from Economic Support to Human Service, but we don't need any stimulus money. 
• You presented seven consecutive budgets that defer maintenance in excess of a half billion dollars for the preservation of taxpayer assets, but we don't need any stimulus money. 
• Stimulus money benefits the economy by putting people to work and purchasing goods and services, but we don't need any stimulus money. 
• You have managed to run two countywide deficits as well as multiple deficits in nearly every major department over the last six years, but we don't need any stimulus money. 
• Highly educated and experienced economists seem to agree that the President-Elect's plan is necessary to stimulate the economy, but we don't need any stimulus money. 
• The plan that comes out of Washington will be a set dollar amount whether Milwaukee County is involved or not, so whatever we don’t get will go to other communities, but we don't need any stimulus money. 
• The parks that were built during the last major depression are some of our most beloved assets and are in need of repair, but we don't need any stimulus money. 
• Our mental health facility is in serious need of replacement to better serve some of our most vulnerable citizens, but we don't need any stimulus money.
• Thousands of our citizens are in need of health care, but we don't need any stimulus money. 
• In your mind, the 2010 election season is upon us, and, because Governor Jim Doyle is working to secure federal stimulus funds, you oppose seeking stimulus money.

 

An effective Milwaukee County executive should actively seek outside funding to reduce the burden on local property tax payers. Shouldn't the dollars we send to Washington be returned to our county? A competent Milwaukee County executive should recognize the importance of creating jobs and bringing lasting value to County residents.

On Sept. 4, the Milwaukee County Board of Supervisors voted to override the county executive's veto of an advisory referendum on whether to provide $67 million in property tax relief for Milwaukee County residents by shifting funding for mass transit; parks, recreation and culture; and paramedics from the property tax levy to a small increase in the sales tax. 

The property tax is the most hated tax in Wisconsin and Milwaukee County. Any attempts to reduce the heavy property tax burden should be considered. This advisory referendum will let the public weigh in on whether the property tax levy should be reduced to the lowest point since 1997.

Under this scenario, all funding for mass transit, parks, recreation, culture and emergency medical services (EMS) would be removed from the property tax levy. For the owner of a $150,000 home in Milwaukee, this would be an approximate $165 property tax reduction.  Owners of property worth higher amounts would save even more.

Don't be fooled when County Executive Scott Walker claims property taxes won't be reduced. The advisory referendum question clearly states property tax relief of at least $67 million, to establish a new tax levy base of approximately $183 million, down from the 2008 level of $250 million. In the future, due to strict limits set by the state, the levy could only increase by 2 percent of that new, lower base (or by the percentage increase in the county's equalized assessed value).

Why is this a good deal for county residents? It would reduce the property tax burden, thanks in part to increased revenue generated by visitors. Sales taxes are partly paid by visitors who enjoy Milwaukee County's amenities but pay no property taxes. It's only fair that visitors pay a small share for the attractions they enjoy.

Because a sales tax is spread more evenly to everyone, including those who don't live here, it's unlikely the additional sales tax would outweigh your property tax savings. You would save $165 in property taxes for a home valued at $150,000. You would have to spend $16,500 a year on taxable goods and services - groceries and other tax-exempt purchases don't count - to equal those savings. If your home is worth twice that, and you spend less than $33,000 per year on taxable items, your overall tax burden would also be less than it is today. In this way, the sales tax can be a solution, not a problem.

We've seen examples of this in other cities as well. Chicago and Minneapolis both have higher sales tax rates, but their property taxes are lower. Those cities recognize that sales taxes provide a way to provide more funding without increasing the burden on local residents.

The County Board approved the referendum by a veto-proof majority after lack of dedicated funding for transit was identified as an urgent concern in a report issued by the Wisconsin Public Policy Forum last month, primarily due to escalating fares, route cuts and declining ridership. Similarly, parks are also suffering, with deferred maintenance costs in excess of $300 million. The Milwaukee County Parks Advisory Commission voted unanimously to recommend a referendum on preserving parks funding while also providing property tax relief. It is also a priority to include emergency medical services and paramedics funding, which are major quality of life services important to county residents.

The yes-or-no referendum question set to appear on the Nov. 4 ballot reads, "Shall the State of Wisconsin grant Milwaukee County the authority to provide property tax relief of at least sixty-seven million dollars ($67 million) by levying a one percent county use and sales tax to be used to remove the following three items from the property tax levy: parks, recreation and culture, transit and emergency medical services (EMS)?"

Do voters want to pay one cent more in sales tax to significantly lower their property taxes and save parks and transit from extinction? You decide.

 

Lee Holloway is chairman of the Milwaukee County Board of Supervisors.

This week's report from the Public Policy Forum confirms what I and other Milwaukee County Board members have known for some time: route cutbacks and fare increases are causing major damage to mass transit in Milwaukee County.

I am glad that Public Policy Forum president Rob Henken is leading a team of professionals in providing detailed and thorough reports on issues of importance to the community, continuing the exemplary work he performed as research director for the Milwaukee County Board of Supervisors.

Preserving an extensive mass transit system is one of my top priorities as chairman of the board. Transit is not just a human services issue. It is also a main ingredient in building our economic infrastructure. Because of limited federal and state support for mass transit, I am going to arrange to meet with key members of the business community to assist the county in developing progressive ways to overcome these funding challenges.

There is no question that we must alter the path our transit system is on. Using property tax dollars to fund the local portion of mass transit funding is archaic. The time for change is now. All options are on the table as we consider ways to modernize transit funding and improve the service provided to people from all walks of life.

A resolution passed by the county board last year affirms Milwaukee County's top transit priority is identifying a non-property tax dedicated funding alternative for the ongoing operation of the existing rubber tire bus service.

A dedicated source of funding means reducing the burden on property taxpayers permanently. The stabilization of the mass transit system in Milwaukee County is dependent upon it being removed from the property tax.

The Milwaukee County Transit System provides an extensive route network that is easily accessible to nearly all county residents. It is imperative that we fulfill the needs of low-income and minority residents in our community. We must not leave the riders and employers who depend on this service behind.

Lee Holloway is chairman of the Milwaukee County Board of Supervisors. To view the Milwaukee Public Policy Forum's new analysis, "Milwaukee County's Transit Crisis: How Did We Get Here And What Do We Do Now?" click here.

Editor's note: Milwaukee County Board Chairman Lee Holloway, along with Supervisors John Weishan Jr. and Gerry Broderick, wrote the following joint statement in response to the County Executive Scott Walker's decision to veto an advisory referendum on whether to enact a 1-percent sales tax dedicated to support property tax relief; Milwaukee County parks, recreation and culture programs and services; transit services; and public safety. The Milwaukee County Board of Supervisors will consider an override of Walker's veto at its next meeting, Thursday, Sept. 27, at 9:30 a.m. in room 200 of the Milwaukee County Courthouse.

A large majority of the County Board approved putting this issue on the Feb. 19, 2008, ballot. We are extremely disappointed that County Executive Scott Walker has once again prevented the public from expressing their opinion on this important issue.

This referendum is similar in spirit to the taxpayers bill of rights, championed by Republicans in the State Legislature, which would have included a referendum on any tax increase at the State level.

The voters should decide whether they want to decrease their overall tax burden in Milwaukee County. This sales tax referendum would let Milwaukee County voters decide whether to collect more revenue from non-county residents who visit Milwaukee County’s attractions, but don’t pay property taxes. We question whether the county executive is really representing the interests of people who actually live in Milwaukee County.

Perhaps that’s why he chose to have (Tuesday's) news conference at a Home Depot store located on the Milwaukee-Waukesha County border.

With this veto, the county executive is overriding the voice of the people. Whether they want to vote in favor of this proposal or against it, the county executive is barring them the opportunity to do so.

We would prefer that the people decide, rather than one arbitrary person.

 

 

 

I'd like to begin by thanking Small Business Times for the opportunity to share with their readers my passion for transit services in Milwaukee County. Whether it's getting to work, school, church or shopping, we provide an extensive route network that is easily accessible to county residents from all walks of life.
But mass transit is facing challenges. Due to higher fuel prices and other increased costs, we've been forced to raise fares and cut routes. This trend underscores the need for a dedicated source of funding to stabilize the financial support for this vital service.
I'm particularly disappointed the Regional Transit Authority (RTA) is ignoring our needs. Last month, the RTA chose to place mass transit on the back burner, while simultaneously approving a tax increase to fund commuter rail.
Milwaukee Mayor Tom Barrett and County Executive Scott Walker directed their representatives on the RTA to vote for a $13 fee increase - amounting to a 650-percent tax increase - on car rentals to pay for the proposed Kenosha-Racine-Milwaukee (KRM) commuter rail line.
Barrett and Walker are placing a higher priority on the KRM line, while ignoring Milwaukee County's existing mass transit system.
The entire tax increase on car rentals would fund KRM. It's frustrating that not a cent would go to Milwaukee County Transit, despite Milwaukee County generating the vast majority of collections from the rental car tax.
We need to encourage both Mayor Barrett and County Executive Walker to realize the importance of identifying a dedicated funding source for the bus system.
The ultimate goal here is to reduce the burden on Milwaukee County property taxpayers by finding a dedicated source of transit funding. Taking transit funding off the backs of Milwaukee County property taxpayers will lead to tax relief for both city and suburban residents in Milwaukee County. By creating a dedicated funding source for transit, the owner of a $150,000 home in the City of Milwaukee would pay approximately $100 less per year in property taxes.
If we look at a dedicated funding source for transit, the effects on the property taxpayer are huge. One method of accomplishing this is through a sales tax increase. With anywhere from 20 to 40 percent of sales tax collections being paid by visitors to Milwaukee County, a substantial portion of our taxes can be shifted to people who use our infrastructure, but don't pay Milwaukee County property taxes. That's true relief for property taxpayers in Milwaukee County.
County Executive Walker claims the majority of county residents do not want a sales tax increase to pay for vital services like transit, parks, arts and culture. I'm personally not so sure. If the public indeed does not want an increase in the sales tax, why not have a referendum to definitively prove it? The fact that Walker continues to resist a referendum on this matter while supporting referenda for other funding policies (such as large, new capital projects) tells me he is not interested in hearing the true desires of the constituents he serves.
It may be that he's concerned that voters actually DO support a modest increase in the sales tax to pay for services they value deeply and to reduce their property taxes.
As you can clearly see, a sales tax is one viable option. But, I certainly encourage all elected officials in Milwaukee County to bring forward other potential dedicated funding sources that would provide a truly stable means of mass transit funding.
Several of my colleagues on the Milwaukee County Board and the Milwaukee Common Council are working as a team to stress the importance of identifying this dedicated funding source, be it a sales tax or other alternative, to preserve our existing transportation network in Milwaukee County. 

Sincerely,

Lee Holloway, chairman of the Milwaukee County Board of Supervisors

Editor's note: The Milwaukee Biz Blog is featuring a variety of viewpoints on the future of southeastern Wisconsin's transit infrastructure this week.