Common Council Plans To Approve Sales Tax

The 2023 Milwaukee Common Council. Front – Larresa Taylor, Milele A. Coggs, Marina Dimitrijevic, Andrea Pratt, Lamont Westmoreland, Scott Spiker, Khalif Rainey, Mark Chambers, Jr., Robert Bauman, Russell W. Stamper, II, Michael Murphy, Mark Borkowski, JoCasta Zamarripa, Jonathan Brostoff. Rear – Angie Ward, Bill Arnold, Council President José G. Pérez, City Clerk Jim Owczarski, Deputy City Clerk Dana Zelazny and Legislative Reference Bureau director Keith Broadnax. Photo by Jeramey Jannene.

The Milwaukee Common Council is poised to move full speed ahead on approving a 2% sales tax. It’s also gearing up to sue the state over multiple policy restrictions included in the statewide revenue agreement that was signed into law Tuesday.

Common Council President José G. Pérez announced Tuesday that the council’s Steering & Rules Committee will review and vote on the new sales tax at its June 26 meeting. The full council is expected to vote on the proposal on July 11, the next scheduled council meeting. Approval on that timeline would allow the tax to go into effect on Jan. 1, 2024.

“If we delay, the City will lose at least $16 million a month. Not only can we not afford to refuse this revenue, but we also cannot afford to wait either,” said Pérez in a statement announcing the schedule.

Two-thirds of the council members must vote to approve the tax.

The city faces a $156 million structural deficit in 2024, driven by rising pension costs, a state prohibition on enacting new revenue sources or increasing property tax revenue and long-flat shared revenue payments. The deficit will grow by an estimated $50 million annually because of actuarial assumptions included in the agreement’s soft closure of the city’s pension system. But the sales tax is expected to generate $193.4 million in 2024 and the city is to receive an additional $21.75 million annually in shared revenue.

In addition to voting for the sales tax, Pérez said the council will be voting to set aside funding to sue over policy provisions included in the bill.

The law blocks city tax dollars from being spent on expanding the streetcar, requires the maintenance of minimum sworn strength levels for the Milwaukee Police Department and Milwaukee Fire Department, ends the Fire & Police Commission’s policy-making authority and substantially restricts any spending and policies to promote diversity, equity and inclusion.

“The policy provisions in this bill will directly restrict our ability to achieve many of our goals, and clearly, they were written by those that do not reflect nor appreciate Milwaukee’s vibrant, diverse population. But these provisions will not dampen our creativity or innovation, nor our government’s work to help our residents. Despite the Legislature’s efforts to impose their values on us, we are resolute in our promise to operate our government in accordance with the values of our diverse community,” said Pérez.

The City of Milwaukee was represented in the negotiations over the revenue agreement, which impacts every city and county, by Mayor Cavalier Johnson and members of the Intergovernmental Relations Division, the city’s lobbying team.

To create a place to store the funds for future litigation, and send a clear signal on how members feel about the restrictions, the council is planning to place the funding within the Office of Equity and Inclusion and the Office of African American Affairs. It is also expected to direct the Department of Public Works to apply for a long-stalled grant application to expand the streetcar and reorganize the Intergovernmental Relations Division to give the council greater control versus the mayor. The council already maintains its own part-time lobbyist, who will be directed to lobby to seek changes to the new law.

A spokesperson for Johnson declined to comment on specific aspects of what the council is proposing and said the mayor’s office remains in ongoing discussions with the council.

Johnson has publicly opposed many of the policy provisions of the law. In interviews and other public appearances before the bill’s final adoption, both the mayor and Common Council President said they expected some amount of compromise to be necessary for any agreement with the Republican-controlled Legislature. But the council, with new Wisconsin Supreme Court Justice Janet Protasiewicz slated to give the court a liberal lean, now appears poised to go to court to overturn specific policy measures by relying on the state constitution’s Home Rule amendment.

“We are at an inflection point in the City of Milwaukee’s history and I am excited for what the future may bring,” said the council president.