Milwaukee County Board of Supervisors approves 0.4% sales tax increase
The Milwaukee County Board of Supervisors overwhelmingly approved a 0.4% sales tax increase and changes to the county's pension system Thursday in a move to stave off painful cuts to services.
Supervisors voted 15-3 during a full board meeting. Approval required a two-thirds majority — or 12 of the 18 district supervisors — to send it to County Executive David Crowley for his signature.
The county executive quickly hailed the vote.
“Today, the County Board of Supervisors shaped the future of Milwaukee County for years to come by avoiding a devastating fiscal cliff that posed to threaten irreparable harm to our community," Crowley said in a statement. "After years of advocacy, Milwaukee County finally has the additional revenue needed to avert financial disaster."
Heading into Thursday's meeting, some supervisors remained undecided, with Crowley making calls to lobby them in the hours leading up to the vote.
“I have not slept for several days now, a good night's sleep anyways, trying to determine what my vote is going to be on this floor today,” Supervisor Kathleen Vincent said.
For Chairwoman Marcelia Nicholson, this was not the hardest vote the county faces.
“Cutting $100 million is a hard vote," she said. "Cutting our transit system route by route is hard. Shuttering county parks and recreational facilities like pools, our domes, gardens, our golf courses, is hard."
Supervisor Sheldon Wasserman called the vote an opportunity to correct mistakes of the past.
"What are we really doing here today? It's correcting a mistake that took place over 20 years ago," Wasserman told his fellow supervisors ahead of the vote and referring to the county's pension crisis in 2001. "Let's enjoy the benefits and save Milwaukee County."
Supervisor Steven Shea said: "This is a classic case of Hobson's choice. It's this or nothing."
Voting against the sales tax were Supervisors Steve Taylor, Ryan Clancy and Sequanna Taylor.
Those in favor were Nicholson, supervisors Deanna Alexander, Peter Burgelis, Priscilla Coggs-Jones, Caroline Gómez-Tom, Willie Johnson Jr., Patti Logsdon, Felesia A. Martin, Juan Miguel Martinez, Shawn Rolland, Anthony Staskunas, Liz Sumner, Shea, Vincent and Wasserman.
In a surprising swing, Martinez, who previously voted against the increase during the special joint committee, voted in favor of it on Thursday.
"You have all seen me in lockstep with Supervisor Clancy," Martinez said. "Today, I am not in agreement with him."
Crowley is set to sign the legislation Aug. 3, according to his spokesman, Brandon Weathersby.
Chairwoman introduces a last-minute amendment
Nicholson introduced a last-minute amendment that asks Crowley to present a 2024 budget reducing the overall property tax levy, provide a report on the expenditure plan for the sales tax increase and deliver a boost in funding for parks, transit and other county services. Eleven supervisors co-sponsored the amendment, which passed 17-1, with Staskunas voting in opposition.
Nicholson, along with other supervisors, cited a future in which the county would be unable to fund key services on which residents rely, including buses and parks.
“After years and years of cutting close to bone in the budgets, we face a fiscal crisis that we will not avert without immediate action,” the chairwoman said. “The step we must take now is clear.”
The sales tax, she said, is the county’s only solution to preserve the services on which residents rely.
A newcomer to the board, Gómez-Tom acknowledged the regressive nature of sales taxes, which fall hardest on those who are least able to afford them, but also said that without the tax “we are left with the impossible task of cutting departments, programs that have already gone through 10 years of agonizing cuts."
“We're here today because people who don't know Milwaukee, don't care about Milwaukee and who don't want to acknowledge the fact that Milwaukee is the financial lifeblood of this state passed a law to give Milwaukee the privilege of choosing between passing a sales tax increase on its own residents or face impending bankruptcy," she said, referring to state lawmakers.
“A vote against the sales tax is a vote against our transit system … a vote against our senior centers … a vote against our parks … voting against is a vote for devastating cuts to the quality of life for our residents,” Burgelis told supervisors.
Conversely, Steve Taylor said the deal struck was less than desirable.
“It’s like because there are no structural changes and because we’re going to have more money available, it’s like ... giving your credit card to a kid, and saying, ‘Just go in the candy store,’” Taylor said. “And we’re going to spend and spend and spend.”
Prior to the vote, Clancy pushed to delay the decision to a future meeting. The motion required a one-third vote — 6 supervisors of the 18 — to get approval but failed on a 1-17 vote.
In order for the tax to be in place by Jan. 1, enacted legislation needed to be delivered to the state Department of Revenue by Sept. 1, and the board was scheduled to be in recess in August. Delaying implementation of the tax until the second quarter of 2024 could have cost the county more than $20 million in revenue.
How will the sales tax increase affect Milwaukee County?
The 0.4% increase will lift the county's sales tax to 0.9% and go into effect Jan. 1.
The tax is projected to bring in an additional $82.2 million in revenue, rising to $92 million by 2028. The county is projected to have a $31 million surplus next year with the expanded sales tax, instead of the deficit of $18 million currently projected.
While much of the discussion focused on the impact of a sales tax on residents and the county’s bottom line, some supervisors also pointed to the transition from the current Milwaukee County pension system to the Wisconsin Retirement System.
“Previous boards made a terrible mistake in this very room,” Wasserman said to his colleagues. “What we’re doing today is to correct that mistake and end Milwaukee County retirement system for once and for all.”
Earlier this month, the City of Milwaukee enacted a 2% city sales tax enabled by the same state legislation that allows the county to raise its tax. That same legislation also increased the amount of shared revenue that is returned from the state to Milwaukee and Milwaukee County, along with all of the state's counties and municipalities.
The total sales tax in the City of Milwaukee will rise to 7.9%, including the existing 5% state sales tax. The total sales tax in other Milwaukee County communities will rise to 5.9%. Critics of both the new city sales tax and an increased county tax point to the impact of that higher rate on low-income residents.
Without the increased revenue from its sales tax, the county was facing cuts to more than half the county's bus routes and other non-mandated services, including parks. The county would also be unable to address $1 billion of deferred infrastructure needs and substantial payments to the estimated $760 million unfunded pension liability.
Even with the sales tax, deficits would return in 2026 with a projected $13 million gap. Without the 0.4% hike, the deficit would be $64 million, which would grow to $95 million by 2028, according to county budgeters.
Over the last two decades, the county has taken measures to stave off drastic cuts, including liquidating assets, cutting more than 1,400 full-time equivalent employees and outsourcing services, such as behavioral health inpatients and crisis services. The county also enacted a $30 vehicle registration fee.
"Still, the county is on the precipice of some severe financial disorder," Rob Henken, president of the nonpartisan Wisconsin Policy Forum, said during a news conference with Crowley on the eve of Thursday's board vote.
Reporters Yash Roy and Alison Dirr of the Journal Sentinel contributed to this article.
Contact Vanessa Swales at 414-308-5881 or vswales@gannett.com. Follow her on Twitter @Vanessa_Swales.
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This article originally appeared on Milwaukee Journal Sentinel: Milwaukee County Board of Supervisors approves 0.4% sales tax increase
