Barrett, Hamilton: Milwaukee needs balanced state approach

By Tom Barrett and Ashanti Hamilton

January 28, 2017

Milwaukee Journal Sentinel 

 

In 2015, the Wisconsin Department of Revenue calculated that the amount of state revenue generated in Milwaukee far exceeded the amount of state aid provided to Milwaukee governments

 

It’s a new year, and we are starting fresh. One of our new year’s resolutions is to end the misperception that Milwaukee is a drain on state resources, when in fact it is a net revenue producer to the state’s economy.

We are moving full speed ahead with Milwaukee’s economic momentum. And we are maintaining our commitment to a local economy in which our residents share in, and contribute to, the city’s economic gains.

Milwaukee is proud to lead the state of Wisconsin forward. In 2015, the Wisconsin Department of Revenue calculated that the amount of state revenue generated in Milwaukee far exceeded the amount of state aid provided to Milwaukee governments — more than $460 million from the city of Milwaukee alone, and an additional $605 million from the rest of Milwaukee County. These contributions promote Wisconsin’s sustainability and provide a range of economic opportunities well beyond our borders.

Wisconsin’s taxpayers residing outside of our county are benefiting by more than a billion dollars in tax revenue from Milwaukee. With only 66% of what the city generates and 57% of what the county generates returning to our communities, we are providing a robust and growing “Milwaukee dividend” to our state’s coffers.

If you haven’t been to Milwaukee recently, we invite you to come see our progress. A flock of our favorite bird, “the crane,” is spread throughout the heart of the city, with an unprecedented number of them building residential projects, hotels, commercial developments and a new arena-centered development. Our central business district is healthy and thriving, with $3.4 billion in public and private real estate investments completed since 2005. Another $1.7 billion is under construction and over $930 million is in the pipeline.

Since the beginning of 2016, 2,600 new housing units were completed or are under construction in greater downtown, for a total of more than 16,000 units built since 2004 citywide. Interest from both residential and commercial developers is strong and growing. Private developers are participating in an inclusive approach that trains and hires many of our most disadvantaged residents to satisfy their construction workforce demands.

All this public and private investment is paying off; the city of Milwaukee’s 2016 net new construction growth of 1.72% outpaced the state average of 1.43%. Even better, construction job growth climbed 9.3% between the first quarters of 2015 and 2016. This far outpaced state construction job growth of 5.5% and national growth of 4.5% during the same time period. Higher income tax revenue from these jobs directly benefits the state’s fiscal health.

Milwaukee’s overall job growth and employment trends are positive. In 2016, the number of Milwaukee residents working was at its highest level since 1998.

Total wages earned in Milwaukee also have dramatically increased. A good portion of that income growth supports people who commute into Milwaukee for work. The Department of Workforce Development estimates that 17% of Wisconsin’s jobs are in Milwaukee County. The county is a net exporter of job opportunities to surrounding counties, with nearly 43,000 more non-residents commuting into Milwaukee County for employment than those commuting out.

Milwaukee’s appeal to private investment is easy to see. We are home to a number of neighborhoods with rich cultural histories, renowned festivals and thriving entertainment districts, world-class universities, the Milwaukee Brewers, the Milwaukee Bucks and more. Major Milwaukee venues such as Summerfest, State Fair Park, Potawatomi Casino, the Harley-Davidson Museum, the Wisconsin Center and diverse cultural and arts institutions attract 12 million visitors annually.

The Wisconsin Department of Tourism recently reported that Milwaukee County continues to lead the state in tourism impact. With nearly $1.9 billion in direct visitor spending and $3.3 billion in total business sales, our tourism industry is thriving. The volume of hotel rooms downtown increased by 44% since 2008, indicating Milwaukee is a popular destination.

Lonely Planet Travel Guide voted Milwaukee one of the top 10 places to visit in the United States in 2016.

Six of Wisconsin’s 10 Fortune 500 companies are headquartered in Milwaukee County, including Johnson Controls, Northwestern Mutual, Manpower Group, Rockwell Automation, Harley-Davidson and WEC Energy Group, for a total revenue worth of $106 billion. These corporate assets profoundly impact our community and state. Their commitment to stay and invest is a vote of confidence in our future.

Our post-secondary institutions are another tale of success, enrolling more than 70,000 students last year. These institutions are generating a professional, educated workforce for the entire state.

Despite remarkable economic progress, we confront persistent challenges daily — most notably with concentrated poverty, poor graduation rates and violent crime. Locally, we will continue to combat our challenges through deliberate action grounded in the principles of human dignity, economic equality and authentic community engagement. Incremental successes abound, but we need additional state partnerships with resources to make dramatic improvements.

Milwaukee’s contribution to Wisconsin’s prosperity is stronger and clearer than ever. Milwaukee is the backbone of Wisconsin’s economy, and proud of it. However, our diverse and resilient community both supports and challenges policy-makers.

That’s why it is so important to understand that the new Milwaukee is an economic and cultural asset, not a drain on resources. Our long-term growth is resulting in immediate, substantial sales and income tax gains for the state; state returns to the city have not kept pace. To meet existing needs, the city must recapture some of the economic gains.

Fortunately, there are many opportunities for the state to invest and reinvest in Milwaukee to reap further dividends for the rest of Wisconsin. We urge state policy-makers to consider the substantial economic activity generated in Milwaukee during the upcoming state budget deliberations. We are happy to play our part in boosting Wisconsin’s economic prosperity and look forward to finding a more balanced approach to thrive together.

Tom Barrett is the mayor of Milwaukee. Ashanti Hamilton is an alderman and president of the Common Council.