Assembly Republicans announce local government funding plan that includes Milwaukee city, county sales-tax provisions

Milwaukee leaders on Thursday joined Assembly Speaker Robin Vos in previewing legislation they said would boost funding to local governments.

Addressing their specific needs, the plan would allow Milwaukee to levy a 2% sales tax and allow Milwaukee County to add another 0.375% sales tax to its current 0.5% sales tax. Both would need voters' approval, though.

However, Assembly Republicans said they couldn't yet provide the legislation in writing, and many details remain unfinalized between the Assembly and Senate, both controlled by Republicans.

Vos, R-Rochester, called the bill "the single largest investment in local governments in the history of Wisconsin" and highlighted the lengthy discussions that he described as "consensus-building."

He was joined at a press conference in downtown Milwaukee's Wisconsin Center by Milwaukee Mayor Cavalier Johnson, County Executive David Crowley and other leaders from across the area, who spoke to the impact more funding could have for their communities.

But, they all noted, there's a long road ahead before any of the proposals in the bill would go into effect, and Johnson and Crowley expressed concern about elements of the plan that would limit their ability to make decisions at the local level.

Municipalities and counties across Wisconsin have pushed for increased funding for local governments, arguing the state's current funding structures make it increasingly difficult for them to continue to provide services to residents.

Milwaukee and Milwaukee County, in particular, have urged state leaders to allow a local sales tax and to increase the funding that returns to communities from the state, known as shared revenue.

Here's what you should know about the proposals:

More: Tony Evers wants the state to give more money to local governments. Here's how it would work.

More: Gov. Evers' shared revenue, sales tax proposal could help Milwaukee. How much is not yet clear.

The actual bill hasn't been released and details aren't finalized

Assembly Republicans said they expect the legislation to be released next week even as they held press conferences Thursday at the state Capitol and in Milwaukee, Green Bay, Eau Claire, La Crosse and Wausau. And, the bill is subject to change as it moves through the legislative process.

State Senate Majority Leader Devin LeMahieu, R-Oostburg, in a statement said the Assembly's Thursday announcement reflected negotiations between both houses of the state Legislature and local governments from across the state ― but, he said, "final details are still being worked out."

Democratic Gov. Tony Evers earlier this year offered a plan as part of his proposed two-year budget that would send $576.2 million back to local governments next year. The plan focuses on an idea from Republican lawmakers that would dedicate 20% of the state's sales tax collections each year to a new fund for municipalities and counties. It would separately open up new options for local sales taxes ― if approved by residents through referenda.

What does the proposal mean for Milwaukee?

The proposal would allow Milwaukee to levy a 2% sales tax to address its pension crisis ― if approved by voters ― while also putting limits on the city's ability to expand its streetcar and decrease its number of police officers. Recent city budgets have seen the number of police officers decrease in response to the city's financial constraints.

The spike in the amount the city must pay into its pension each year is a key factor in its financial challenges. That amount is expected to grow from about $71 million to $139 million on average over the five years starting in 2023.

The increase is driven by factors including a drop in the anticipated future earnings on the pension fund from 8.24% to 7.5%.

Johnson said the sales tax funding would be enough to address the city's unfunded pension liabilities and invest additional dollars in public safety.

He told the Journal Sentinel after the press conference that he's concerned about whether voters would approve a referendum aimed at addressing the pension, given the pension scandal at the county that broke in the early 2000s.

"Everybody knows that, in Milwaukee County, there have been issues with pensions going back years," he said. "I think that's something that's still fresh in people's minds in this county."

He said he would instead prefer legislation allowing the implementation of the sales tax without going to referendum.

The city's pension system would also be closed over time, with future employees moving to the state retirement system, a complex maneuver.

The bill also contains other policy provisions dealing with policing and the Hop streetcar.

The number of police officers in the city would not decrease below current numbers and, while the city's Fire and Police Commission would continue to select the city's chief, it would be the chief who would work with the mayor and Common Council to set policies for the department, Vos said.

The legislation would also increase the number of police officers in the city to about 1,725 over the coming years, Milwaukee Police Association President Andrew Wagner said.

There are currently 1,630 budgeted sworn positions in the Milwaukee Police Department, and 1,560 are filled, according to the city Budget Office.

What does the proposal mean for Milwaukee County?

The county would be allowed to levy an additional 0.375% sales tax for its pension over the current .5%, if approved by voters.

The new funding would amount to about $75 million a year, according to Crowley's office.

The county's pension system would also be closed over time, with future employees moving to the state retirement system.

What could the legislation mean for the state?

In a Thursday morning press conference at the state Capitol, Assembly Republicans said the bill would give every community in the state a 10% minimum funding increase.

The bill's language includes putting 20% of sales taxes collected by the state into an account that will pay local governments the current amount they receive in shared revenue.

There would also be $50 million to counties and $176 million total to towns, villages and cities ― funding that would have to go to law enforcement, fire protection, emergency medical services, emergency response communications, public works and transportation, state Rep. Tony Kurtz, R-Wonewoc, said.

Kurtz didn't say what criteria would be used to determine how funding is distributed to individual counties and communities.

He also referenced a three-year, $300 million "innovation fund" pilot program meant to incentivize communities to work together and share services.

How are others reacting to the Assembly proposal?

Waukesha County Executive Paul Farrow, the former state Republican Party chairman, slammed the proposal as providing a “bailout” for Milwaukee and Milwaukee County while not addressing the “problems created by an outdated state revenue formula and decades of unfunded state mandates.”

“The new money provided under the proposal falls far short of what a low-tax county like Waukesha needs to fight crime, support our 911 dispatchers, and keep our roads and the public safe,” he said. “In fact, if unchanged, the new spending proposal would barely cover the cost of inflation in one year of our county budget. Making matters worse, the plan attaches just enough strings to tie our hands and prevent us from using the funds in the best way possible.”

Assembly Minority Leader Greta Neubauer, D-Racine, said in a statement that the next two-year budget presents an opportunity to invest in communities.

"We still haven’t seen a bill draft from the GOP, and there is a lot more work to be done to ensure that we have a solution that works for the people of Wisconsin," she said. "We look forward to continuing these conversations to give our communities the support they need to be successful."

Senate Minority Leader Melissa Agard, D-Madison, in a statement said Republicans "should be embarrassed by their announcement today."

"It is clear that they have no consensus on a plan to adequately fund our communities. Our local governments deserve better than the games Republicans are playing," she said.

Evers' spokesperson didn't immediately respond to a request for comment Thursday night.

Why do local leaders say this funding is needed?

Communities across Wisconsin have been seeking changes to the way the state funds local governments, saying they're struggling to maintain services on which residents rely.

That includes Milwaukee County and the city of Milwaukee, where the situation is particularly dire.

Rising costs, stagnant shared revenue, declining savings and a significant spike in the city's annual pension contribution have forced Milwaukee to become increasingly dependent on federal pandemic aid to maintain city services. Those funds will be gone soon.

Milwaukee officials say the city needs about $150 million more annually to maintain services.

The county's outlook is not great, either. In particular, the fiscal struggles of its transit system have been making headlines recently.

Need more help with voting questions? The Milwaukee Resource Guide is here to help. Have something you want answered? Submit a question.

This article originally appeared on Milwaukee Journal Sentinel: Wisconsin Assembly proposal on local government funding announced