County Budgets Will Suffer Due To The Pandemic. The Question Is: How Much?

May 7, 2020

The true economic impact of the coronavirus pandemic is still unclear. Unemployment has had its highest surge in U.S. history, dwarfing previous records. Small businesses are struggling to survive, and the stock market has been vacillating between extreme lows and highs.

In the Milwaukee area, people are concerned about what this is going to mean for themselves, their loved ones, and the community. Rob Henken, president of the Wisconsin Policy Forum, has been analyzing how this pandemic may impact local budgets.

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The Wisconsin Policy Forum recently released a report that looks at the potential impact of this economic downturn. Wisconsin county budgets rely heavily on state aid and property taxes, which under normal circumstances is considered a weakness. But Henken says this could actually prove helpful as budgets feel the sting of this pandemic.

"In this case, because those two revenue sources on which counties depend are relatively stable, and we really have to emphasize the word 'relatively' here, it’s actually an advantage for counties in Wisconsin," he explains.

Henken emphasizes the word "relatively" because so much is still unknown. Although the state budget is theoretically set until June 2021, these are extraordinary circumstances that could force the state to create a new budget.

"There is a considerable likelihood that because of the state's own revenue shortfalls in areas like sales and income taxes, that state leaders are going to have to go back into the state budget ... and we don't know what they're going to have to do, but clearly there is a likelihood of across-the-board cuts or just selective cuts in programs that could severely impact county governments," says Henken.