GOP budget co-chairs cast doubts on 1% sales tax in Milwaukee, GOP flat tax

MADISON, Wis. (CBS 58) -- There are signs Milwaukee could fall short of securing more money to address the city's pension problems and other financial challenges after the Republican co-chairs of the Legislature's budget committee cast doubts on allowing the city to raise their sales tax.

Milwaukee Mayor Cavalier Johnson and Milwaukee County Executive David Crowley have been lobbying at the state Capitol to impose an additional 1% sales tax to help fund its pension obligations and other government services.

Rep. Mark Born (R-Beaver Dam) and Sen. Howard Marklein (R-Spring Green), the co-chairs of the Joint Finance Committee, tossed cold water on the idea Tuesday.

"I don't think you'll see this Legislature support new taxes," Born said during a WisPolitics panel Tuesday.

In order to raise revenues, Milwaukee leaders need approval from the GOP-controlled Legislature because state-imposed limits on local governments prevent them from acting on their own.

In his state budget proposal, Governor Tony Evers included a provision to allow Milwaukee County to raise its sales tax, with half of the money going towards the city to address funding shortfalls. Born said this proposal is unlikely to be included in the final budget.

Assembly Speaker Robin Vos (R-Rochester) has also warned Milwaukee leaders a sales tax increase is doubtful unless he sees reforms, such as solutions to reduce government spending and fixing the pension system. The city's pension funding gap has already led to cuts in city government including police, fire and other departments.

However, Milwaukee could still see some relief.

The JFC co-chairs and Evers both said local governments will see a funding increase to pay for things like police, EMS and other essential services. There's agreement on both sides on finding new ways to fund local governments.

"They agree there will be more money for our counties and municipalities," Evers said after speaking at the Wisconsin Counties event. "How that's going to look, I don't know."

Evers proposed sending 20% of the state sales tax back to municipalities to increase shared revenue, a measure top Republicans said they were already working on before he introduced the plan earlier this year.

"We're not interested in funding the same old systems with more money," Born said. "We want reforms, we want improvements that really fund the future and what are really essential services that local governments have to provide."

Evers said he's meeting with GOP leaders this week to discuss shared revenue among other areas of possible compromise such as funding for education, mental health and transportation.

Flat Tax

A Republican bill to move the state's income tax rates down to 3.25% is also unlikely to be included in the final two-year spending plan, Born and Marklein said.

In January, Senate Majority Leader Devin LeMahieu unveiled his proposal that would phase in a flat tax of 3.25% by 2026. LeMahieu believes his tax plan could help Wisconsin become more competitive.

Despite Evers vowing to veto the bill if it reached his desk, Marklein said it remains a priority to eventually move towards a flat tax bracket.

"That's a long-term goal," Marklein said.