Evening star., 1932-09-18
TAXPAYERS REVOLT
ST|RS MILWAUKEE
City, Solvent and Rich Nine
Months Ago, Faces Difficult
ties Over Budget.

that had weathered the depression, had
its financial house in order. possessed
a snug surplus of $4,000,000, and had
built up a reserve for the future-is
now facing the prospect that perhaps
the roseate picture Of its condition was
all big mistake.
Last January, when the telegraph
lines clicked to the country the story
of Milwaukee's healthy and prosperous
financial situation, city officials else
where and better-government leagues
turned to Socialist Mayor D. w. Hoan
with questioning eyes, seeking a solu-
tion to the multitude Of financial prob
lens that confronted them. They
wanted to know how in these times OF
economic stress, with taxes difficult to
collect. delinquencies mounting and
bills and salaries remaining unpaid,
Milwaukee had achieved such an envt-
GUS state Of financial bliss.
Change Has Come.
But now an entirely different story
comes out Of Milwaukee. The picture
has changed. Nine months have caused
q radical transformation.
Milwaukee faces shortage Of $6,000,-
600 in It's municipal treasury at the
close of the current calendar year.
Salaries of city employees have been cut
10 per cent. School teachers are threat
ened with a similar reduction. And
Milwaukee finds itself in the throes Of
a militant taxpayers revolt.
Milwaukees plight might even De
worse but for the aid it has received
from the county government, which has
been spending about 100000 month
for unemployment relief. Approximate
ly 80 per cent Of these funds went to
residents of the City of Milwaukee, re-
lieving the city taxpayers OF this added
burden growing out of the depression.
Lawsuits have been filed by taxpayers
in the last few weeks against Milwaukee
City officials demanding reduction in
taxes. lower assessments and changes
in financial management. These tax
payers insist the city is overtaxed, prop
erty Is assessed unequally, and that the
municipality is unable to meet its obli-
cations within the next few months.
Thousands Sign Petitions.
Petitions bearing thousands Of sig
natures have been filed with the city
clerk, demanding enactment by the
Common Council Of a charter ordinance
cutting the city budget for the coming
year by approximately S5,000,000 and
reducing the tax rate by SO on each
81 900 of assessed valuation. In addi-
tion suits have been brought by indi-
viduals and corporations to force reduc-
tions Of assessed valuation upon ap-
proximately $4,000 900 worth of prop
erty, while another group of property
owners has petitioned the State Tax
Commission to reasSess their holdings,
charging an assessment out of proper
ton to assessments in other sections of
the city.
Into this wave of tax revolution the
Taxpayers Advisory Council, represent
ing the Milwaukee Association of the
American Real Estate Board. the Build
ing and Loan Association League and
the Citizens Bureau, instituted suit to
compel the city to segregate its bond
and trust funds from operating funds.
Herein, the council contends, lies
remedy for Milwaukee's financial pains
and the solution for the condition that
permitted Milwaukee to be pictured In
a healthy financial condition when 1t
really was no better of than any other
municipality. Advocates Of the change
point cut that because OF this process
of mingling trust and bond funds with
the general operating funds of the city
the municipality was enabled to finish
last year with balanced budget and
in delinquent taxes as current asset
a system which any other city might
have adopted with the same result.
Has Only One Fund.
In other words, Milwaukee is using
all money in the city treasury as one
fund. Separation into bond and other
funds is merely a matter of bookkeep-
ing. and funds are replaced when
needed When current funds are plenty
public Improvements are financed and
the issuance of bonds is withheld until
there is need for more cash.
Milwaukee has a detailed budget and
strict budget control. No department
can spend more than its allowance. At
the end of the year any unexpended
balances are carried forward as general
revenue for the coming year.
Thus, if the city is required to segre-
gate its bond funds. it will be compelled
to borrow money which 1t cannot collect
from its taxpayers to meet municipal
costs.
Initiative Statute Invoked.
The petitions by which the Milwaukee
taxpayers are seeking to limit the size
of its 1888 budget and reduce taxes are
predicated on the initiative referendum
section of the Wisconsin statutes which
permits the people of Wisconsin to
initiate legislation. The Common Coun-
Gil under the statutes must approve the
petitions within 80 days or submit the
matter to referendum at the follow
ing general election, which falls this
year on November 8.
Milwaukee taxpayers see no relief In
the economies that have been adopted
and no way to reduce taxes without
taking control of the tax situation
through referendum, as the Socialist
administration has insisted on using
savings in salaries to provide employ
ment.
Some idea of the situation in Mil
waukee is provided by Fortney H.
Stark, executive secretary of the Mil
waukee Real Estate Board, who has
made thorough study of the taxpay-
ers' dilemma.
Situation Held Serious.
I'm view Of the fact that the City Of
Milwaukee now has approximately ST.
100000 Of cash on hand in all of its
bank balances; that its trust fund ac-
counts alone should be in excess of
SO 0O0,00 at this time, and that the
current expenses of the city for the
balance of the year will necessitate the
borrowing of $4,0O0,000 to $5000,O0O,"
he said, "you can easily appreciate that
the municipal tax situation in the City
of Milwaukee Is as serious, if not more
so as any other city in the country;
for Milwaukee has simply done as every
other bankrupt would do-put the day
of reckoning off through the use of
trust funds, until now we are approach
ing the time when to delay will be to
carry out the recent Socialist campaign
slogan, Wake Up Wall Street. by our
cries for municipal loans"
The lawsuits, according to Stark, may
mean that with $14,500,000 in delin-
quent taxes on hand and approximately
$4,000, 900 in cash invested in special
improvement assessments the City of
Milwaukee will be one year behind in
its tax collections by April, 1888, and
will then have "the outstanding record
of being the only city in the country
that was forced by its own taxpayers
to reduce expenditures. This" he de-
r1ared oIIr or1v hore nf avoi6ino q