State Needs to Re-Commit To Cities
Shared revenue to local governments has declined for 20 years
Satya Rhodes-Conway and Steven Ponto.
The cities of Brookfield and Madison are different in many ways. In one the majority votes red, the other blue. One is a suburban enclave, mostly white and upper middle-class. The other is the state’s second largest city and has a more diverse mix of people and incomes.
The state should increase its investment in cities because if cities are not doing well, neither is the state. We suggest three policy changes for accomplishing this: reversing cuts in state aid to cities, easing property tax levy limits, and allowing municipalities to create new revenue streams, such as a local sales tax, provided voters approve in a referendum.
Wisconsin’s cities and villages are home to:
- 72% of the state’s population
- 90% of the state’s commercial value
- 87% of the state’s manufacturing value
Most of the small businesses created in Wisconsin get their start in cities and villages.
Yet, the state government continues to disinvest in cities. In the last two decades, under both political parties, the state’s financial commitment to cities has been on a steady downward trend. At the same time, the state tightly restricts the ability of municipalities to raise their own revenues to fund the services people and businesses expect.
The largest state aid program for municipalities, called shared revenue, has been cut incrementally by $94 million since 2003, a 12.3% reduction. In 2003, Madison received $9.2 million and Brookfield just over $1 million in shared revenue from the state. In 2021, Madison will receive $6.1 million and Brookfield just over $570,000. Meanwhile, the cost of providing services has, like everything else, increased substantially since 2003.
We call on the Legislature to use the state’s 2021-2023 budget to renew its partnership with municipalities by increasing its financial commitment to communities. We also urge the Legislature to ease the nation’s strictest property tax limits. Let municipal elected leaders have more control over local budgets and finances by providing flexibility on levy limits – perhaps by allowing communities experiencing little growth to increase their levy by at least the rate of inflation.
The Legislature should also expand local revenue options for municipalities to consider. The state can best help cities prosper, protect residents, and relieve over dependency on property taxes by giving communities other revenue options to pay for critical services like police, fire, streets, libraries, and parks. One obvious choice is to give communities the option of going to the voters with a referendum seeking permission to impose a local sales tax. While some communities like Brookfield would likely not pursue this option, other communities would.
We may not agree on much, but we both love our communities and we both know we need the state to begin partnering with its local governments. This can best be done by reinvesting in communities, easing the strict limits on property tax collections, and providing more local revenue options. A great state needs successful cities. The state Legislature must do more to help municipalities succeed.
Steven Ponto, Mayor of Brookfield and Satya Rhodes-Conway, Mayor of Madison.
More about the Local Government Fiscal Crisis
- Mayor Johnson’s Budget Hikes Fees, Taxes In 2025, Maintains Services - Jeramey Jannene - Sep 24th, 2024
- New Milwaukee Sales Tax Collections Slow, But Comptroller Isn’t Panicking - Jeramey Jannene - Jun 28th, 2024
- Milwaukee’s Credit Rating Upgraded To A+ - Jeramey Jannene - May 13th, 2024
- City Hall: Sales Tax Helps Fire Department Add Paramedics, Fire Engine - Jeramey Jannene - Jan 8th, 2024
- New Study Analyzes Ways City, County Could Share Services, Save Money - Jeramey Jannene - Nov 17th, 2023
- New Third-Party Study Suggests How Milwaukee Could Save Millions - Jeramey Jannene - Nov 17th, 2023
- Murphy’s Law: How David Crowley Led on Sales Tax - Bruce Murphy - Aug 23rd, 2023
- MKE County: Supervisors Engage in the Great Sales Tax Debate - Graham Kilmer - Jul 28th, 2023
- MKE County: County Board Approves Sales Tax - Graham Kilmer - Jul 27th, 2023
- County Executive David Crowley Celebrates County Board Vote to Secure Fiscal Future and Preserve Critical Services for Most Vulnerable Residents - County Executive David Crowley - Jul 27th, 2023
Read more about Local Government Fiscal Crisis here
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This is a solid case for directing more funds to our cities. However, it leaves out mention of Wisconsin’s largest city, Milwaukee, and in this case there is a counter-argument. Additional funds should not go to bail-out the pension funds which are weighing down the city, and additional funds should not be made available until we have cleaned-up our police and health departments. Milwaukee needs to demonstrate clean, effective government before it is rewarded with more support. Otherwise, it will simply be a waste of money.
Don’t just about all cities have a problem with pension funds?
Nevertheless, good to see there are no partisans in foxholes. Hope this is the start of a trend of cooperation.
There is usually a gap between what we “should” do and what is likely to be done. In this case, understanding that gap means understanding the Republican Party, its radicalized base and the far-right media that inflames it. Years ago, conservatives opposed spending/investment in cities as “wasteful,” unless it was spent on privatization of some function. That is not the driving force today.
Today’s Republicans – egged on by fascists on Fox News and talk radio, are motivated by something different: the desire to inflict maximum pain on the designated scapegoat groups. These are the perceived “others” in a largely otherized state: Black people, non-white immigrants, and the hated liberals. In our times, indifference has been replaced by a belief in “the worse, the better.”
It isn’t just the bigoted commenters in the Milwaukee Journal-Sentinel who clearly relish urban misfortune. Almost every elected Republican in the state, including its United States senator, is in the camp that believes that making city life worse is in their political interest. A non-entity like Scott Walker became governor via scapegoat politics. So, in the current context, refusal to approve a small sales-tax increase isn’t about fiscal prudence; it’s about making city life worse, especially for the scapegoats, and then blaming “the liberals” for the bad outcomes.
Rather than focusing on what “should” be done, it would be really useful to hear “how” it can be done, especially with this crew of nihilists un control of the levers of power in the State.
Regarding the comment from Mr. Schmitz, “Don’t just about all cities have a problem with pension funds?”
It must be appreciated that a city’s responsibility is both to its employees and its citizens. All reasonable efforts must be made to satisfy its pension agreements with its employees. However, when it is clear these efforts will be unsatisfactory, it is not ethical for the city to: 1) take risks with public funds or 2) reduce services to citizens to an unsustainable level.
In other words, the city has an obligation to make good faith efforts to its employment agreements, but if this proves to be inadequate, its obligations to its citizens dictates these employment agreements must be renegotiated, in bankruptcy if necessary.
I hope this is part of Milwaukee’s plans.