Mayor Barrett warns against abolishing residency requirement, said would be major set-back to city’s economic futureMay 24, 2013 // 0 Comments
Early Tuesday morning before a gathering of Milwaukee’s civic and business leaders at the Italian Conference Center, Mayor Tom Barrett touted the future of his city by the lake.
The mayor spoke glowingly of projects on the drawing board or under construction that would literally change the city’s landscape along the lakefront, boost its economy, and change local and national perceptions.
Barrett talked about the construction of a new 30-story Northwestern Mutual office tower, a planned 44-story hotel and apartment high-rise and 17- story office building, as well as a proposal to extend Lincoln Memorial Drive into the Historic Third Ward.
He also touted the transformation of the Menomonee Valley, the continuing redevelopment of the Pabst Brewery site, redeeming and developing vacant land, turning them into urban gardens, and redeveloping foreclosed properties in the city’s neighborhoods, as well as espousing the efforts of colleges and universities that are developing curriculums focusing on high-tech jobs in “The Valley” and takes advantage of the city’s biggest asset, Lake Michigan.
Business and civic leaders seemed impressed by the details in the mayor’s presentation. Indeed, any out of town CEO of a growing company in attendance and looking to relocate his or her business would be receptive to relocating to the state’s largest city that is considered in some mainstream circles as—would you believe—“hip” and “cool.”
Later that same morning, during an interview with the Community Journal in his City Hall office, Barrett was not as buoyant talking about a potential fiscal crisis that threatens to irrevocably set-back the city’s bold plans towards a brighter future.
Wisconsin Gov. Scott Walker and the Republican controlled Legislature— through the state’s proposed fiscal budget— is seeking to abolish statewide local governments’ ability to enforce residency requirements.
In Milwaukee, the measure would only impact the city’s police officers and firefighters. In state legislation (Act 10) that stripped most public workers and their unions of collective bargaining, the organizations representing police officers, police supervisors and firefighters were exempted, allowing them to retain their bargaining rights.
Though he wouldn’t say it directly, Barrett did not disagree with the observations of other locals who see the state’s attempt to dismantle the residency requirement as an assault on his city and an attempt to turn Milwaukee into another Detroit.
Years ago, Detroit—as well as Baltimore and Minneapolis—did away with residency requirements. It proved to be particularly disastrous for Detroit, which saw its police and firefighters leave the city, taking their property tax dollars with them
As a result, the “Motor City” is a shell of its former industrious self, teetering on the verge of fiscal collapse, while dealing with such nation-leading negative indicators as, White and middle-class flight to the suburbs, crime and joblessness.
Though the measure would impact municipalities state wide, Barrett said Walker and the Republican controlled legislature’s real target is Milwaukee.
“It (the residency measure) is payback for the unions,” Barrett said, adding ending the residency would destabilize neighborhoods and intrudes on local control.
The mayor has asked the state legislature to remove the residency busting measure from the state budget, arguing it is a policy item that should be debated and voted on by the legislature based on its own merits.
During the interview, the mayor displayed a duel map of Milwaukee showing red dots, which represented foreclosed properties—the majority of which are concentrated in the Black community—and blue dots representing the homes of public employees.
“Red (the foreclosures) is the ‘right hook’ to the face,” Barrett said looking at the map. The red dots represent the reduction of asset value of Milwaukee, which dropped from $30 billion to $25 billion (a 17% drop).
Because of the foreclosure problem, local businesses are paying five percent more of the total property tax bill. As a result, residential property values during this period dropped 30%. Commercial and manufacturing property values dropped six percent.
“Blue is the ‘left hook’ to the face,” said the mayor, noting if the residency requirement is abolished, the exodus of those blue dots would represent a significant loss of public employees and their property tax dollars.
Barrett noted the city is liable for $1.138 billion of the public employee pension. Sixty-eight point six percent of this amount is for police ($505.2 million) and firefighters ($276.1 million).
Under Act 10, public employees must make contributions to their pensions (seven percent). The police and firefighters are exempt from making contributions.
Instead, Milwaukee taxpayers are footing the bill to the tune of, on average, $4,700 each per year.
If the measure, eliminating residency, is passed in the budget bill and police officers and firefighters move out of the city with no agreement to pay a percentage of their earnings towards their pension through their paycheck (which would take some of the pressure off of residents), they will be getting what amounts to a “freebie.”
Though police officer and firefighter organizations are the only public unions with collective bargaining, the mayor said they don’t want to discuss a compromise that would require them to pay their fair share toward their pensions.
“Because of the Global Pension Settlement many years ago, we can’t require employees of the city to pay towards their pension unless they sign a voluntary agreement to contribute to their pension,” Barrett explained. Barrett doubts either public safety union would make that type of concession.
“I have respect for police and firefighters,” Barrett said. “But something is wrong when they want to renegotiate a 75 year agreement (the residency requirement goes back to 1938-ed.), but don’t want to give anything in return.”
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