Last month, a coalition municipal, county, business, labor and community leaders gathered in South Milwaukee to announce plans for state legislation allowing Milwaukee County to host a binding referendum seeking a one percentage-point increase in its sales tax.
The announcement – made in South Milwaukee as part of the regular rotation of Intergovernmental Cooperation Council meetings of local mayors and village presidents – garnered significant media coverage, which you can get a flavor of here and here.
They seek to allow the county to hold a binding referendum that, if passed, would increase the Milwaukee County sales tax to 6.6%, 6.5% if the Miller Park tax sunsets in early 2020 like it is supposed to.
If passed, the sales tax increase would generate approximately $160 million in revenue per year. As outlined in the bills …
- 25% of the revenue — or $40 million — would immediately go toward property tax relief.
- 7% of the revenue — about $11 million — would go towards additional funding for “public health infrastructure projects” across the county (think lead laterals, etc.).
- The remaining revenue (about $109 million) would be split with the county and each of its 19 communities, based on population.
In the end, the ICC put off formal action the proposal, pending more details, and will discuss it more at its meeting next week.
Here is why I support the legislation …
- If the sales tax is enacted, it would deliver significant property tax relief. This is an important point – as mentioned, 25% of the proceeds of the sales tax will be returned “off the top” to property taxpayers, likely in the form of a credit. One estimate puts this at about $900,000 in total tax relief for South Milwaukeeans annually.
- The sales tax would be a huge lift for local budgets – and services. For South Milwaukee, proceeds from the sales tax could top $1 million annually. How we allocate this money will be decided by the Common Council, but options include additional property tax relief, putting it toward operating costs and capital projects, or adding to our reserves, or potentially all of those. I promise a robust conversation on where the money will be spent. For starters, it will give us some breathing room in our annual budgeting, allowing us to better in addressing items like the 15% increase in health insurance costs we are facing for 2020. I also hope these funds will go beyond just maintaining our current level of service. I look forward to working with our department heads and council to find ways to invest this money for the future of our city. From public safety to other city services to infrastructure, we have lots to do, and lots of needs.
- It would help the county, too, and that’s a big deal for South Milwaukee. As I said in my remarks, South Milwaukee boasts a number of county assets, and anything that helps the county budget helps us. Could this extra funding perhaps permanently stave off elimination of bus routes 48 and 52? Could it lead to more investment in our parks, and capital projects like roads? Could it help reinvent Grobschmidt Pool for the 21st century? Or free up investment in the Oak Creek Watershed? Those are the types of things we’ll lobby for.
- Others would contribute. This is an important note: Estimates say almost 30% of the sales tax collections will come from people who live outside of Milwaukee County. Be it vacationers headed to the beach (Grant Park Beach?), fans to a ballgame (a Rocket football game?), attendees to the 2020 DNC Convention, or visitors to a show (at the South Milwaukee Performing Arts Center?), our out-of-county friends should have to contribute toward those assets and the governments that support them. It can’t just be on the back of Milwaukee County property taxpayers anymore.
- It lets voters decide. This is most appealing of all. In the end, love or hate the idea of an additional sales tax, all this legislation seeks to do is allow Milwaukee County voters decide on whether or not they want one. It does not ask for one extra dollar from the state. That is democracy in action, giving power to the people to have their voices heard.
This is also is a step toward solving the bigger problem we face in funding of local governments: an overreliance on property taxes.
Property taxes paid by Milwaukee County and Wisconsin residents are among the highest in the nation … there is no hiding from that. But that is in part because there are few other sources of revenue available to fund our budgets. Our sales tax is among the lowest in the nation. We need a balance, and this would help provide that.
Passage would also help us deal with this reality: Property taxes are not enough. They do not provide enough to pay for the services you have rightfully come to expect from us.
A decade of state-imposed levy limits, cuts in state aid and unfunded mandates have taken their toll. We need this relief. South Milwaukee residents and business owners need this relief.
As I said in my remarks …
Every community is dealing with this to some degree — urban, rural, big, small, rich, poor, red, blue, with no regard to geography. This has to stop, and we need help to do it. We want to be effective partners with the state, and to be part of the solution. But we need the state legislature to give us the tools to truly invest in our communities.
I look forward to seeing the legislature and governor step up to do that, with passage and signing of these bills.