More money for cities and counties? GOP set to unveil shared revenue plan; Evers wants more options for Milwaukee

 

BEAVER DAM, Wis. (CBS 58) -- While middle school students here showed off their science projects to Governor Tony Evers Tuesday, Republicans in Madison said they were nearly done constructing a long-awaited plan to update how the state funds its local governments.

Assembly Speaker Robin Vos (R-Burlington) said GOP lawmakers were tentatively planning to hold a series of events across the state Thursday to unveil their proposed shared revenue solution.

"We have been negotiating, what seems like, for hundreds of hours -- it's not quite been that much -- but a lot of time on this topic," Vos said before Tuesday's Assembly session. "And I feel like we are, hopefully, on the cusp of agreement, but at the end of the day, the devil is in the details."

Evers was in Beaver Dam promoting his proposed budget, which included a $2.6 billion increase in state spending on K-12 schools. A week before he unveiled his budget, Evers offered his plan to revamp the state's shared revenue model.

Under Evers' plan, 20% of all state sales tax money would go to cities and counties across the state. Wisconsin currently has a five-cent state sales tax. 

Beyond that, Evers called for allowing Milwaukee County voters to decide whether to raise the county's sales tax from 0.5% to 1.5%. Half of that increase would go to the city of Milwaukee. Other Wisconsin cities with a population of more than 30,000 would be able to hold votes on having their own 0.5% sales tax.

"I would anticipate there will be some accommodations for Milwaukee and Milwaukee County," Evers said. "To have access to creating an additional sales tax."

Currently, counties are allowed to have a maximum sales tax of 0.5% while cities and towns are not allowed to have a municipal sales tax. There are only a handful of exceptions made for designated resort communities, including Wisconsin Dells and several communities in the Northwoods and Door County.

"If the numbers are a little different, then we can negotiate that," Evers said. "But if it's essentially creating an opportunity for the Legislature to punish the city of Milwaukee and the county of Milwaukee, that would be a disappointment."

A source close to the ongoing Republican talks told CBS 58 Tuesday the negotiations were still "in flux." In his press conference, Vos stopped short of guaranteeing the Assembly's GOP plan would be unveiled Thursday.  

A CBS 58 crew spotted both Milwaukee Mayor Cavalier Johnson and Milwaukee County Executive David Crowley at the state Capitol Tuesday.

At an event Monday, Johnson declined to get into specifics when asked whether he was deep in discussions with GOP legislative leaders.

"I know there are conversations that have been ongoing," Johnson said. "When I came into this office, I said I would have a cot in the Capitol and I'd work every single day fighting for Milwaukee's interests."

"That includes having the ability for Milwaukee to have the same tools that other large metropolitan cities across the United States have."

How Wisconsin is 'out of the ordinary'

The subject of how Wisconsin local governments are allowed to bring in money has long been a debate in policy circles. The nonpartisan Wisconsin Policy Forum issued a report in 2017 noting Milwaukee was an outlier compared to 39 other U.S. cities with similar populations.

"In this peer group of 39 cities, Milwaukee was the only one that had no ability to create any type of sales tax," the forum's president, Rob Henken, said in an interview Tuesday.

Henken noted even some states with solidly Republican governments have allowed their biggest cities to have sale taxes that acknowledge they provide services to many non-residents, such as tourists or suburban workers who commute into the city.

He used Missouri as an example, which has higher sales tax rates for places like Kansas City and St. Louis.

Because municipal governments are largely restricted from having their own stream of sales tax dollars, Henken said local governments are extremely reliant on state aid, which has remained flat over the past decade, and property taxes, which are capped by the state. 

"I think what is out of the ordinary, here in Wisconsin, is the fact that we put so many limits on the ability of our local governments to determine their own revenue structures," Henken said. "That are based on their own economies and who is actually utilizing city services."

Sharing (services) is caring

While Vos declined to offer details on what the Republicans' shared revenue proposal would look like, he indicated part of the plan would include incentives for communities that come up with new ways to merge their resources and provide shared services.

"If two municipalities want to be able to coordinate their services, the state would incentivize that," Vos said. "And help them be able to offer the same or better service without caring about what the color of the squad car is, or the uniform someone wears when they respond to the call."

Henken said despite what considered to be a "broken" revenue model currently in place, part of the solution for local governments also included finding ways to combine services.

"There is no question that city leaders are going to have to get more serious about things like intergovernmental service sharing," he said. "This problem is now so big, there has to be both a revenue solution and some very serious solutions on the expenditure side."