Crowley Signs Sales Tax Legislation, Tax Starts January 1

County Executive David Crowley holds up signed sales tax legislation. Photo by Graham Kilmer.

Milwaukee County Executive David Crowley and Board Chairwoman Marcelia Nicholson signed legislation Thursday enacting a new 0.4% countywide sales tax.

The two county leaders signed the legislation at the Washington Park Senior Center exactly one week after supervisors voted 15-3 to approve the new sales tax.

Crowley said the signing was “the culmination of years, decades of advocacy.” Nicholson said it was a “testament to why unity and collaboration are a necessity for harnessing effective, powerful change.”

Both Nicholson and Crowley came into their positions in 2020 as the COVID-19 pandemic was beginning. They would join their counterparts at the City of Milwaukee in leading a coalition of local elected officials and leaders in the business and nonprofit community in a lobbying campaign aimed at securing additional revenue for the Milwaukee government through increases to state aid and the authority to levy a new sales tax.

County leaders have worked under annual structural budget deficits for more than a decade, caused by an imbalance in how much money the county takes in and how much it costs to operate the government. A major contributor has been the county’s complicated and out-of-control pension costs created more than two decades ago when the board approved a pension enhancement that included the infamous backdrop payments. On top of that, state aid has been frozen for more than a decade, as costs grew ever higher with annual inflation.

Without the sales tax, the county was on track for draconian cuts to parks, transit, senior centers and other human services. Annual deficits were projected to hit $109 million by 2028.

In the spring of this year, a historic deal was struck between the new leadership in Milwaukee, all Democrats, and the Republicans that control the state legislature. At the end of June, Gov. Tony Evers signed Wisconsin Act 12 which remade local government funding statewide, and provided authorization for the county and the city to enact new 0.4% and 2% sales taxes, respectively.

With the sales tax secured, county leaders can close the chapter on advocacy, Crowley said. “And we opened the door even wider to the opportunities and the possibilities to serve our residents through those departments and services and so many others.”

It’s been estimated that the new sales tax will generate approximately $82 million for the county in 2024. This funding can be used to pay down the county’s unfunded pension costs. But it will also make available $39 to $49 million in property tax revenue that was previously dedicated to paying down the county’s pension obligation. County leaders plan to implement the new sales tax beginning Jan. 1, 2024.

“For those we represent and those who follow us, we correct the course of our government’s future,” Nicholson said. “A future that is fiscally strong and steady. capable of ensuring the quality of life that we want the residents deserve.”

Crowley said during the signing that the work does not end with the sales tax. He told Urban Milwaukee that the sales tax has secured the county’s financial future. “But we still have to make the proper steps moving forward to ensure that it’s here for the long term,” he said.

The county’s budget deficits will return in 2026, even with a sales tax. But they won’t come close to the massive budget gaps that leaders would have faced without a new source of revenue.

“I’m committed to working to improve the quality of life for all county residents,” Crowley said. “Today, I sign this legislation and we will move forward.”

Crowley and Nicholson were joined by U.S. Rep. Gwen Moore, who said of the two county leaders, “It is so important for me to look at them through the lens of them being teenagers, who did not create this mess.”

The congresswoman said Crowley and Nicholson, who represent a new generation of leadership in Milwaukee, saved the county from a decimation of vital public services.

“Folks, these millennials have pulled us out of the ditch.”

Crowley Fulfills Another Campaign Promise

When Crowley ran for county executive, the county’s financial precarity and the need for new revenue loomed heavily over the race.

During the campaign, Crowley, who was finishing up his second term in the state Assembly, said county leaders needed to be realistic about who controlled the state legislature (Republicans), but said the county needs to be able to “raise our own revenues and fix our own problems.”

The county executive campaigned on additional sales tax revenue to pull the county pack from a fiscal cliff.

“When we first started talking about this people did not believe that this was possible,” Crowley told Urban Milwaukee.

But now it’s a reality. When asked what he thinks the county should do with the new revenue, Crowley said: “Invest in the quality of life all across Milwaukee County,” and then rattled off a list including addressing the backlog in the local court system, investing in parks, transit and human services, like the Credible Messengers program created during his tenure.

Does Crowley have a message for the naysayers who thought a sales tax deal with the state was impossible? “It’s here now, baby.”