Evers Says Fixing Financial Relationship Between State, Milwaukee and Other Cities Is Top Priority

Governor Tony Evers says fixing the financial relationship between the State of Wisconsin and its cities is his top budget priority if he’s re-elected.

“The State of Wisconsin has failed our municipalities, especially when it comes to Milwaukee,” said Evers in an appearance before the Rotary Club of Milwaukee and Milwaukee Press Club on Tuesday afternoon. “It is my priority in this next budget, period.”

The City of Milwaukee faces the need to begin laying off 24% of its workforce in two years because of an anticipated increase in pension costs, state restrictions on creating or increasing revenue streams and effectively frozen state aid. The state’s shared revenue system, originally created as a rebate system for income taxes, is a key piece of any alleviation of the issue.

Adjusted for inflation, the city of Milwaukee’s budget office reports Milwaukee receives $155 million less annually in shared revenue than it did in 2000.

With the city facing an annual structural deficit in excess of $100 million, an increase in shared revenue could go a long way, as would a sales tax that Mayor Cavalier Johnson is seeking legislative approval for. The city is delaying sizable cuts currently by exhausting its $394.2 million federal American Rescue Plan Act grant, in advance of 2025.

Evers touted his proposal Tuesday to increase shared revenue by 8% over the next two years.

“We have to increase shared revenue. Simple as that. That will be my top priority. There is only so much [cities] can do without money,” said Evers. “I know that this city sends a lot of tax money down the road to Madison. You should be getting more than 0% increases over the last 10 years.”

Evers said the funding would allow Milwaukee and other cities to maintain or expand their police departments.

But the amount he is proposing is far short of what Milwaukee needs. An approximately 8% increase would net the city an additional $17.5 million annually on top of the $219.1 million it is budgeting to receive in 2023. An additional public safety supplement proposed by Evers would grant the city an additional $478,000 annually. The Milwaukee Police Department budget alone in 2023 is planned to be $300 million.

And despite it being Evers’s top priority, the governor faces a roadblock: the Wisconsin State Legislature. The governor proposed a 2% increase in 2019 and a 4% increase in 2022, both were stripped by the Republican-controlled Legislature.

Evers also proposed allowing municipalities with more than 30,000 people to levy a 0.5% sales tax, but the legislature blocked that policy.

The revenue issue isn’t one limited to just Milwaukee. “Brookfield, one of the most wealthy communities in the state, they too are approaching a problem point in the next few years where they won’t be able to pay their bills,” said Mayor Johnson in an interview previewing his 2023 budget. “And if the state’s system for funding local governments does not work for a community that is as wealthy and as well resourced as Brookfield, then it simply doesn’t work.”

Milwaukee’s problems are more acute because of a confluence of factors including its poverty rate, law enforcement needs and that it is required to fully fund its pension system and is the only city in the state with its own system. The size of the city also makes the scale of the problem that much greater.

The state, meanwhile, is poised to have an approximately $5 billion budget surplus in July 2023.

In addition to his remarks on shared revenue, Evers discussed his support for abortion rights, the need to provide rural broadband, that he did not directly make decisions on paroles and that his administration provided everything requested of it during the 2020 Kenosha riots.

Evers faces Tim Michels in a hotly-contested re-election bid.

Michels was originally confirmed to appear before Rotary and the Press Club next week, but the appearance is now listed as “awaiting response.” Senator Ron Johnson addressed the group last week.