Evers’ Budget Proposal Would Allow Milwaukee Sales Tax
City and county officials have been pursuing option for over a year.
With state shared revenue declining and property taxes capped, Mayor Tom Barrett has been advocating for a sales tax to bail out Milwaukee’s budget for more than a decade.
Governor Tony Evers‘ budget proposal would give him his wish, and possibly a path forward for the cash-strapped city.
“The state should be setting the floor, not the ceiling, for local partners, and Wisconsin taxpayers should have a say in whether they want their communities to have more resources so their local government can keep providing critical services—that’s pretty simple stuff,” said Evers in a statement. “Our proposal puts the question back in the hands of the folks best positioned to make decisions for their community—local leaders and the people who live there.”
State law currently prevents cities and counties from levying additional sales taxes, beyond a 0.5% county tax and select resort area taxes.
The proposal would grant Milwaukee County the authority to add an additional 0.5% sales tax and the City of Milwaukee to add an additional 0.5%. The result would be a county rate of 6% and a city rate of 6.5%. But voters would need to approve each in a referendum.
Evers’ announcement drew immediate support from the Metropolitan Milwaukee Association of Commerce and the Wisconsin Counties Association.
Based on 2019 estimates, the proposal would generate $80 million revenue for Milwaukee County and $50 million for the City of Milwaukee in new, annual revenue.
Barrett, when a countywide 1% effort was announced in 2019, told Urban Milwaukee that his priorities were stabilizing the Milwaukee Police Department‘s personnel levels, purchasing new medical emergency response vehicles for the Milwaukee Fire Department, investing in street repair and providing property tax relief.
“Mathematically the numbers don’t work,” said Barrett of the city’s current financial situation. “This is not asking the state for additional funding, this is about allowing the state to give us the tools to help ourselves.”
State law caps the property tax levy Milwaukee can impose and a freeze of state shared revenue in 2003 now costs the city over $100 million per year when adjusted for inflation. Milwaukee County faces a similar budget crunch.
On Monday, speaking to members of the Greater Milwaukee Committee, Barrett reiterated his call for more resources from the state. He pointed out that the city has had to cut over 200 police positions in recent years because of budget constraints.
“These were not philosophical decisions,” he said.
“The state government has already taken up the mantle of defunding police,” he said.
The Republican-controlled Legislature will ultimately decide if the city and county can enact the referendum. The Assembly and Senate must approve the budget and, as they did in 2019, are likely to make significant changes to Evers’ proposal.
A 0.5% food and beverage sales tax also exists in Milwaukee to partially fund the Wisconsin Center District.
Under Evers’ proposal, any Wisconsin county and any municipality with over 30,000 residents could propose a 0.5% sales tax via binding referendum.
Funding Crunch
Barrett and Johnson, alongside Milwaukee County Executive David Crowley and County Board Chair Marcelia Nicholson, were participants in a panel moderated by Wisconsin Policy Forum leader Rob Henken during Monday’s GMC meeting.
Milwaukee’s peers, a group of 38 cities, derive approximately half of their local revenue from property tax revenue (median: 52%). Milwaukee generates 96% of its local revenue via property taxes.
“Not only is Milwaukee number one in its reliance out of the 39 on its reliance on the property tax, but it’s number one by a large margin,” said Henken.
When looking at the combination of state shared revenue, the city’s shrinking number two funding source, only Memphis and Las Vegas derive more of their revenue from a similar structure. Milwaukee relies on it for 48% of its tax revenue.
More about the 1 Percent Sales Tax Proposal
- The State of Politics: The Debate Over Local Sales Taxes - Steven Walters - Feb 22nd, 2021
- Evers’ Budget Proposal Would Allow Milwaukee Sales Tax - Jeramey Jannene - Feb 12th, 2021
- WCA Applauds Governor Evers’ Sales Tax Option - Wisconsin Counties Association - Feb 12th, 2021
- MMAC Encourages Support for Evers Sales Tax Proposal - Metropolitan Milwaukee Association of Commerce - Feb 12th, 2021
- Gov. Evers Proposes Plan to Enhance Local Control, Bolster Local Communities’ Economic Recovery - Gov. Tony Evers - Feb 12th, 2021
- The State of Politics: Milwaukee Leaders Plead for 1% Sales Tax - Steven Walters - Mar 16th, 2020
- County Sales Tax Legislation Gets Hearing - Graham Kilmer - Mar 5th, 2020
- ‘Fair Deal’ Sales Tax Referendum Blocked From April Ballot - Corri Hess - Jan 30th, 2020
- Transportation: Bauman Wants 1.5 Percent Sales Tax - Jeramey Jannene - Sep 26th, 2019
- Review Board to Discuss Recent Sales Tax Proposal and its impact on Public Transit - Ald. Bob Bauman - Sep 23rd, 2019
Read more about 1 Percent Sales Tax Proposal here
More about the 2021-2023 Wisconsin Budget
- Evers’ Capital Budget Spends $2.4 Billion - Shawn Johnson and Rich Kremer - Feb 22nd, 2021
- The State of Politics: The Debate Over Local Sales Taxes - Steven Walters - Feb 22nd, 2021
- Evers Budget Restores Union Rights - Shawn Johnson - Feb 22nd, 2021
- Statement on Wisconsin Budget Proposal - Wisconsin Federation for Children - Feb 19th, 2021
- BLOC Responds to Evers’ Budget Address - Black Leaders Organizing for Communities - Feb 19th, 2021
- Gov. Evers’ Badger Bounceback Agenda Receives Bipartisan Praise, Support - Gov. Tony Evers - Feb 18th, 2021
- Americans for Prosperity – Wisconsin Responds to Gov. Evers’ Budget Proposal, Urges Fiscal Restraint - AFP Wisconsin - Feb 17th, 2021
- Senator Bradley: Scrap Governor Evers’ Budget, Start From Scratch - State Sen. Julian Bradley - Feb 17th, 2021
- Construction Business Group Supports Governor Evers’ State Budget Proposal - Construction Business Group - Feb 17th, 2021
- Gov. Evers Unveils $91 Billion Budget - Shawn Johnson and Laurel White - Feb 16th, 2021
Read more about 2021-2023 Wisconsin Budget here
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- August 13, 2015 - Cavalier Johnson received $25 from David Crowley