Governor Tony Evers recently proposed that counties and more than two dozen large cities in Wisconsin be allowed to ask voters to raise the sales tax to pay for local services such as police and fire protection and road repairs.
He first unveiled a proposal to change how local governments are funded in his State of the State speech last month. Evers, a Democrat, wants to fund local governments with 20% of the state sales tax, or 1 cent of the 5-cent sales tax charged per dollar spent. That amounts to about $576 million in the first year, with future payments increasing as the sales tax goes up, Evers said.
“The state must fulfill our obligation to ensure our local partners can meet basic and unique community needs alike, and this historic investment will ensure that we do,” Evers said in a statement. “I look forward to working with the Legislature to find common ground in the weeks and months ahead to fund our communities now and with growth into the future.”
Evers’ plan is similar to one that Republican legislative leaders have been discussing.
Assembly Speaker Robin Vos said in a statement that Republicans “will not grow the size of government or write blank checks without insisting that local governments innovate and combine services to reduce costs.”
All Wisconsin counties are now able to only levy a half-cent sales tax.
Evers’ proposal would allow for Milwaukee County to impose an additional 1 cent per dollar tax on sales, with half of what is raised going to the city of Milwaukee, if approved by voters. All other counties could ask for a half-cent sales tax increase.
Officials in the city and county of Milwaukee have been pushing for the ability to raise more from sales taxes.
Cities other than Milwaukee with at least 30,000 people could also ask voters for a half-cent sales tax increase. There are 25 cities with at least 30,000 people, based on the 2020 Census.
There is a broad coalition of cities, counties, towns, villages and others that supports tapping state sales tax revenue to pay for local governments after years of stagnant funding.
Under the Evers plan, more than 43% of the aid would be earmarked for public safety, such as law enforcement, fire, emergency medical services, courts and district attorneys’ offices. The other 56% would be general aid.
The current shared revenue program to fund local governments, created in 1911, has remained nearly unchanged for nearly 30 years despite overall growth in tax revenues, according to the nonpartisan Wisconsin Policy Forum.
Shared revenue for counties and municipalities was cut in 2004, 2010 and 2012, and since then has been relatively flat. It was 12.5% of the state’s general fund budget nearly 30 years ago, but is less than 5% now, according to the Legislative Fiscal Bureau.
The push also comes as Wisconsin is projected to have a budget surplus exceeding $7 billion.