Historic Shared Revenue Boost For Local WI Governments Passed Into Law

WISCONSIN — A historic bipartisan compromise that will increase the share of state tax revenue for local governments across Wisconsin passed Tuesday as Act 12.

The majority of cities, towns and villages across the Badger State can expect around a 20 percent increase in shared revenue support, according to a news release from Democrat Governor Tony Evers' office. For many communities, shared revenue is one of their most significant sources of funding.

Shared revenue is aid given from the state government to local governments through a host of programs, often without any specified uses for the money, according to a report by The Milwaukee Journal Sentinel. The money mainly comes from state taxes, and a portion is later recirculated back to local governments, the newspaper noted.

Part of the compromise on the funding came for Milwaukee and Milwaukee County, and seeks to avoid insolvency from the city.

With the passage, Evers said Milwaukee can avoid an "imminent fiscal cliff" by allowing the city's common council and county board of supervisors to enact sales tax increases of 2 percent in the city and 0.4 percent countywide.

"Should the Milwaukee Common Council vote to implement a 2 percent sales tax, we will avert a fiscal calamity that has been years in the making," said Milwaukee Common Council President Jose Perez in a news release. "The only decision now before the Common Council is whether to accept a generational influx of revenue."

"The Wisconsin Department of Revenue estimates that this sales tax would produce approximately $193 million a year, generated from everyone that utilizes our city and its services, not just its residents. We know that to maximize the revenue coming into the City in order to stave off drastic cuts in the next budget, we must move quickly," said Perez. "For this revenue to be recognized by January 1, 2024, an ordinance must be passed prior to the Common Council’s August recess. 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. The first vote will take place at the Steering & Rules Committee on Monday, June 26, followed by a vote of the full Common Council at its meeting on Tuesday, July 11."

The agreement between Democrat Evers and Republican legislative leaders "represents a generational increase in the state’s commitment to local communities, and it ties local government funding to the state sales tax going forward, allowing for growth in the future," said Evers' news release.

Wisconsin Senate Republican Majority Leader Devin LeMahieu last week's passage of the bill in the Senate a "historic day" via Twitter.

State Rep. Bob Donovan, a Republican who represents southern parts of Milwaukee County, heralded the passage as evidence that government can work for people.

“I’ve been incredibly fortunate to be a small cog in this historic legislation – being a tireless advocate to prioritize public safety again. I want to thank everyone that was involved and came together to craft this legislation," said Donovan in a statement. "I hope that one day future generations can look back to today and appreciate this historic opportunity. I couldn’t be more pleased that I finally got my birthday wish of a deal with Milwaukee on shared revenue.”

A memorandum estimated the revenue changes for each municipality in Wisconsin. Each city, village and town with a population under 110,000 can expect at least a 20 percent increase to their aid.

For many Milwaukee County municipalities, the revenue increase could be much bigger than 20 percent. Here is the total estimated percent increase in county and municipal aid for some:

• Greendale is set to see a 148 percent aid increase.
• Whitefish Bay is set to see a 205 percent aid increase.
• Franklin is set to see a 198 percent aid increase.
• Greenfield is set to see a 100 percent aid increase.
• Oak Creek is set to see a 100 percent aid increase.
• Wauwatosa is set to see a 162 percent aid increase.
• The City of Milwaukee is set to see a 10 percent aid increase.
• The City of Waukesha is set to see a 67 percent aid increase.
• The City of Brookfield is set to see a 182 percent aid increase.

You can find a full breakdown of the additional community funding here.

“To me, the issue of shared revenue has always been about doing the right thing for Wisconsin. I began working on this when I took office four years ago, and that effort began for me with this simple truth: that for far too long, our local communities have been expected to do more with less,” said Evers in the news release. “Local partners for years have had to make impossible decisions, forced to choose between paying for first responders, addressing PFAS, fixing the roads, and other critical priorities that affect the health, safety, and well-being of folks across our state."

“I believe the state should be doing its part to support our local partners and ensure our communities have the resources they need to meet basic and unique needs alike, period, and I’ve always believed that supporting our local communities is an area where we could work to find common ground and bipartisan support, and that’s exactly what we did," Evers said.