Milwaukee Faces Rising Pension Liabilities, Earning a “D” Grade

Milwaukee’s financial condition worsened in fiscal year 2023, with the city facing a $3.3 billion shortfall. This equates to a Taxpayer Burden™ of $15,100, earning Milwaukee a “D” grade and classifying it as a “Sinkhole City” in Truth in Accounting’s latest report.

The city's financial position declined by $279.7 million, primarily due to an increase in its unfunded pension liability. A key factor was a state-mandated reduction in the Wisconsin Retirement System’s discount rate from 7.5% to 6.8%, which significantly increased Milwaukee’s pension obligations.
Milwaukee reported governmental expenses of $1.15 billion, while program revenues only totaled $171 million, leaving a $987 million gap. General revenues, transfers, and capital grants added $1 billion, resulting in a small operating surplus. However, this was not enough to counteract the rising pension liability, placing additional financial strain on the city.
Key findings from the report include:

• Milwaukee had $1.3 billion available to pay $4.7 billion in bills.
• The city’s financial shortfall amounted to $3.3 billion, leaving each taxpayer with a $15,100 burden.
• A state-mandated discount rate change contributed to a growing pension liability.

With pension liabilities rising and expenses outpacing revenues, Milwaukee will need strategic financial planning to ensure long-term fiscal stability.

For those interested in a deeper dive into Milwaukee’s finances—and how it compares to other major U.S. cities—you can read the full Financial State of the Cities 2025 report here.