A New Approach: Sales Tax Proposal Could Deliver Property Tax Relief, Much-Needed Investment in the County + Local Communities (Like South Milwaukee)

More details on the Move Forward MKE website.

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.

Here is the full press conference afterwards, and my remarks.

The bills (AB 521 and SB 471) were introduced in the last week.

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.

27 Comments

Filed under South Milwaukee

27 responses to “A New Approach: Sales Tax Proposal Could Deliver Property Tax Relief, Much-Needed Investment in the County + Local Communities (Like South Milwaukee)

  1. Robert Procter

    I don’t believe it!

  2. frank Gratke

    I belief this is going to be a long political fight. What I am hearing, is the two political parties are locked into positions that are exact opposite.Whatever your position, is contacting your state assembly person is the key to getting your voice heard

  3. DHH

    Never trust a politician who wants to raise ANY tax. It never works out for the benefit of the taxpayers. At best, we’ll see pennies on the dollar in lower property taxes and any small pittance returned to the city will go toward more nonsense like fancy new street lights on Milwaukee Ave.

  4. Russ Sobolik

    Maybe if you would watch the spending as we retires have to, you would not be so anxious to tax us more. Why do you always think money out there is free?

    • We watch spending very closely, and operate a very sound financial operation. Ask our independent auditors, the bonding agencies. We operate very lean. (Example: We are still among the smallest police forces in the county per capita, even after the referendum.) We have made cuts. We are driving efficiency measures. And it’s not enough. We need more revenue options.

      • Tax Payer

        So you are proud that we protect our community with such a small force when per FBI standards we need more?

        Wouldn’t you want to have a larger force to go after the drug use and quality of life issues within the city to make it a better community? Especially since you are trying to attract people here with the new downtown look…

      • We do our best — very well, actually. Crime overall is down and has been for several years. Am I satisfied? Never. Would I like to have more officers? Absolutely. But that takes money, which this proposal would provide.

      • DHH

        The best example of fiscal responsibility you can cite is a small police force?! Clean up the drug dealing in the 2nd District and then you can brag! I no longer feel safe in my home!

      • A small police force that does great work every day to keep us safe. Do we still struggle with drugs to some degree, like every community? Of course. We do more with less every day in all of our departments, and I am proud of that. No bragging.

      • chris

        How can you be watching spending. I have drove thru the downtown area and really cannot tell the difference. The streets were not bad and I really don’t notice much of a difference in the lights. How much did this cost the taxpayers of South Milwaukee. How has the money that you spent enabled South Milwaukee to bring more people to the downtown area? You need to lower taxes and start spending money more wisely.

      • You won’t notice a difference until the project is done next spring. Judge it then. Although minds are pretty much made up on this issue, I suspect. It’s really too bad. My belief: It’s money well spent to improve the look of our city center, and replace aging and failing infrastructure. The lights are a great example. The fixtures and wiring on those were decades old, and needed replacement. So we did, with better performing, energy-efficient lights. Same with the failing roadway (in spots) and the poorly designed parking situation on 9th near Milwaukee.

      • resident.

        South Milwaukee Mayor – we need new lights – Buys lights that look just like the old ones.

      • Metallic black pokes vs. dated stone — and the biggest difference of all, they are LEDs. Energy efficient, saving money over time. And drive Milwaukee Avenue at night; there is a huge difference in the quality of light.

  5. joanne olson

    i am not in favor of the increase. it seems like i’m asked to give more money thru a 1% tax in order to get some of it back. makes no sense. plus i have yet to see cuts by any government agency that actually help the taxpayer, only threats to services that matter most such as fire and police or in schools the music or athletic depts.do we really need so many people in top positions-8 aldermen, all the administrative positions in schools.etc.we already have the 1.5 million dollar 4 block bike path -enough of the stupid spending!!!!

  6. Carla Uphill

    I am in favor of this, but I would like some mention of money going towards road repairs statewide and also the needed repairs and maintenance of our Milwaukee county parks especially Grant Park.

  7. Melanie Poser

    Do you ever say no to tax increases Eric Crooks?

  8. Frank Gratke

    I would like to thank the Mayor for the nice job he does on the Blog. I believe it is a World Class Blog in a small city It keeps me informed about activities I would not know about if not for his blog. When I been around the Mayor. he has never taken an alcoholic drink, never lost his cool and always allowed for a person to have their say.I have never heard of him missing one of his sons basketball games
    He puts in a lot of hours. For what we pay the Mayor, if you divided by the number of hours he puts in, I am sure it would come below minimum wage.
    The problem with being the Mayor of South Milwaukee is the budget does not have much planing funds in it. It makes it hard to come up with plans for an old industrial city, with an aging population and buildings, environmental issues .and no open land.
    Instead of name calling come on down to city hall an examine the city budget. It has zero fat and conservative estimates on revenues. You would think you would need a freedom of information act to get it. The City people handed to me by simply asking for it. Note, in his time as Mayor I have never had to use a freedom of information act with the City of South Milwaukee/

  9. Raymond K Johnson

    Is it possible to raise the fines for the criminals that break the laws of our city? If so would this held defer tax increases?

  10. resident.

    As soon as the property tax gets cut, you would find some new reason to jack it back up. And you’ll tell us its still lower then before so its OK.

    • New reasons like the increasing cost of health insurance? Or infrastructure replacement? Or providing modest pay raises to your people? Or the countless other things that simply cost more over time? If those are the new reasons you speak of, then yes, you may see reasonable tax increases sometimes.

      • resident.

        Thanks for admitting that you are lying that we would NOT see property tax relief. Just higher sales taxes, and high property taxes.

        Now stop pretending this tax increase would lower any taxes.

      • The county sales tax would indeed include a large amount put to property tax relief for all county property owners. That is one reason I support it. It’s called for in the legislation, not just a promise of a politician.

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