What to know about the Milwaukee council's vote for a 2% sales tax

The Milwaukee Common Council voted to implement a 2% sales tax Tuesday.

The tax, which the state estimates could bring in approximately $193.6 million in additional revenue in 2024, is seen by many as the city's only option to avoid deep service cuts in two years.

The council voted 12-3 Tuesday on the tax.

Here's what you need to know:

What would a sales tax apply to?

According to the state Department of Revenue, the local sales taxes would be made up of the same general base as the state sales tax. This means that nothing would be added to or subtracted from items that the existing state sales tax already applies to.

More: Milwaukee could implement a new sales tax. Here's how it work and what items would be taxed.

Generally, items (tangible personal property) are subject to tax unless specifically exempt, and services are not subject to tax unless they are specifically deemed taxable. Tangible personal property is defined by the state Department of Revenue as, "personal property that can be seen, weighed, measured, felt, or touched, or that is in any other manner perceptible to the senses."

Which Common Council members voted for and against the tax?

The state legislation requires that a two-thirds majority of the council vote for the tax in order to implement it. That means 10 of the 15 council members had to vote in favor.

Votig yes: Common Council President José G. Pérez, District 3 Ald. Jonathan Brostoff, District 4 Ald. Robert Bauman, District 5 Ald. Lamont Westmoreland, District 7 Ald. Khalif Rainey, District 8 Ald. JoCasta Zamarripa, District 9 Ald. Larresa Taylor, District 10 Ald. Michael Murphy, District 11 Ald. Mark Borkowski, District 13 Ald. Scott Spiker, District 14 Ald. Marina Dimitrijevic, District 15 Ald. Russell Stamper II.

Voting against: District 1 Ald. Andrea Pratt, District 2 Ald. Mark Chambers Jr. and District 6 Ald. Milele Coggs.

Why is the city allowed to implement a sales tax?

That Milwaukee even has the option to implement a sales tax is the product of months-long negotiations between local officials, Republicans in control of the state Legislature and Democratic Gov. Tony Evers.

What resulted was a sweeping local government funding bill that Evers signed into law last month boosting funding for communities across the state but also implementing myriad controversial policy changes, including a number specifically aimed at Milwaukee.

Why have some city leaders pushed for a sales tax?

Milwaukee for years has been sliding into an increasingly difficult financial situation.

Its problems have been caused by the state's decision to return a stagnant amount of shared revenue to the city for more than two decades and state-imposed limits on local governments' ability to raise revenue through other means such as sales taxes or by increasing property taxes. At the same time, the city's annual pension contribution is spiking while other costs are rising and reserves are dwindling, including the nearly $400 million Milwaukee received in pandemic aid.

How soon could a sales tax go into effect?

Jan. 1, 2024.

More: When will I start paying a sales tax in Milwaukee and Milwaukee County? What we know.

Why has the state law enabling a sales tax been controversial?

The new state law has been controversial because of the series of policy changes aimed at Milwaukee, which seven council members have slammed as "overreaching, micromanaging, and frankly racist."

Those policies curtail funding for diversity, equity and inclusion in addition to the city's streetcar while also removing power from the Fire and Police Commission, returning police officers to Milwaukee Public Schools and requiring minimum police and fire staffing under threat of losing many millions of dollars.

Those provisions go into effect regardless of whether the city approves a city sales tax.

And even as the new law offers the city a financial lifeline — potentially $200 million-plus in new revenue annually, with the sales tax — it also comes with significantly increased costs for public safety and the city's annual pension payments.

More: Milwaukee Common Council to vote today on 2% sales tax aimed at averting a financial crisis

More: Sales tax could help Milwaukee but new state law also comes with steep costs. Here's how.

What does the city plan to do about the policy provisions aimed at Milwaukee?

Council members have introduced legislation opposing the policies and seeking ways to blunt their effects. The resolutions, which are also on the agenda Tuesday, explore potential litigation, express opposition to the policy initiatives, seek funding for streetcar expansions and more.

What have people outside City Hall said about the tax?

At a series of town halls, Milwaukee residents offered a range of reactions.

A town hall held by six council members from the city's north side last week that drew a crowd of about 90 people mostly vehemently opposed to the tax.

Another held by three south side council members was smaller and anything but contentious.

And at one held by Ald. Lamont Westmoreland Monday night, more than 70 people attended, most expressing their opposition to the tax.

A day before the vote, the city's chief financial officer acknowledged the controversy around the state legislation that enabled a city sales tax but said the revenue source seemed to be the only way to maintain services.

"Allowing the City of Milwaukee to implement a 2% city sales tax appears to be the only viable solution for the city to continue providing essential services to our residents and community. ... This is a unique one-time opportunity to stabilize the city’s financial future," Comptroller Aycha Sawa wrote in a statement.

Her assessment was echoed by U.S. Rep. Gwen Moore, who urged the council to support the tax. She said while it includes "poison pills" inserted by state Republicans, the council's vote was solely about "whether there will be enough revenue to provide basic city services in the years ahead."

“Milwaukee’s future is bright, and our wonderful citizens deserve good city services. Our city libraries need to stay open and public safety must be adequately funded. It appears there is only one way forward, and that’s to generate new revenue through a city sales tax. Despite these poison pills, we must act to avoid a catastrophic fiscal crisis,” she said.

Drew Dawson of the Journal Sentinel staff contributed to this report.

Alison Dirr can be reached at adirr@jrn.com. Nathaniel Rosenberg can be reached at NRosenberg@gannett.com.

This article originally appeared on Milwaukee Journal Sentinel: What to know about the Milwaukee council's vote for a 2% sales tax