In May of 2009, the Walker's Administration anticipated that Milwaukee County would run a $15 million budget deficit if corrective actions weren't taken. Not taking the news lightly, the Walker Administration made serious curative changes. They mandated a 3% spending reduction across all County Departments, imposed furlough days and wage freezes on county workers, and reorganized the House of Corrections. Walker's aggressive resolution marked the first time a major local government made such a sweeping overhaul of government spending.
Last Monday, the Walker Administration released a preliminary budget estimate for the 2009 fiscal year. The County Fiscal and Budget Administrator reported a startling $8.9 million budget surplus for Milwaukee County. The report demonstrated that department reductions, furlough days, and reduced work weeks contributed to more than $10 million in county savings. Another contributing factor was a change in health care providers, which accounted for a 10% decline in costs.
This is not the first time Walker has yielded budget surpluses. In 2007, the Walker Administration finished with a $7 million surplus, and in 2008 they closed with $4 million. The more remarkable achievement, of course, is the 2009 surplus of $8.9 million simply because it occurred during the period economists call the "Great Recession".
Just recently, three rating agencies (Moody's, Fitch, and Standard and Poor's) assigned favorable bond ratings for Milwaukee County on the basis of their continued ability to maintain a fiscal structural balance. Moody's said that Milwaukee County's "financial operations have stabilized as a result of critical budgetary actions." And the Fitch Ratings report stated that Milwaukee County dealt with a "sizable budget gap" and "eliminated its deficit by year end through implementing expenditure cuts."
Bond ratings are often the single most important factor affecting the interest cost on bonds. This means that if Milwaukee County wanted to exchange a municipal bond for a cash payment from an investor, the county is in a good position to receive a low interest rate on borrowed sums. This is important when financing larger and longer term programs for the county.
Having $8.9 million surplus is also important in terms of applying the year-end sum to the next year's budget. For instance, the $4 million surplus from 2008 was applied to the 2o10 budget, and thus the $8.9 million surplus for 2009 will soon be counted as revenue for the 2011 budget. Again, this is not just responsible government, but this is good business practice because it strengthens the county's ability to carry out projects with minimum costs to taxpayers.
This year, a lot of eyes will rest on mainly two gubernatorial candidates. The Democrat Candidate is Tom Barrett, who is no stranger to the Milwaukee metropolitan area. As a U.S. Congressman, he legislated as a fiscal liberal. Barrett promotes spending programs. And since it is unpopular to raise taxes on working families, this leaves the wealthy and small businesses to foot the bill. As U.S. Congressman in 2000, Barrett voted against tax cuts for small business; and in 2001 (during a recession mind you), he voted against the "Bush Tax Cuts" that provided tax rebates to individuals and married couples while reducing the Capital Gains tax for small businesses.
On the flip-side, Scott Walker is the Republican candidate whose history as the County Executive is one of fiscal conservatism. He is a disciplined spender and often errs on the side of frugality. He cuts taxes for for working families and small businesses. And he often generates budget surpluses at the end of the fiscal year. As a County Executive, Walker has introduced eight consecutive budgets with a 0% property tax increase, reduced the county debt by 10%, and improved the county's bond rating.
And if anyone thinks that Walker's job is an easy one, then they have quite a bit to learn about Milwaukee County. Scott Walker is the first Republican Milwaukee County Executive in Wisconsin history, and this is for a good reason. Milwaukee County is a liberal refuge that's reliably provides a great momentum to Democrat candidates come election time.
And as it were, Walker battles the Milwaukee political machine every year to ensure that taxpayers are protected and spending is kept in check. If you want a governor that's willing to keep government's fiscal house in order, one need look no further than Milwaukee County where budget surpluses are persistent and the municipal bond rating is solid.