MKE Common Council to pursue lawsuit challenging shared revenue conditions

 

MILWAUKEE (CBS 58) -- On the same day Gov. Tony Evers signed into law a bill overhauling how Wisconsin funds its local governments, alders in the state's biggest city announced they're considering a legal challenge to parts of the bill specific to Milwaukee.

Evers signed the bill in Wausau Tuesday, enacting a law that increases annual state aid payments, known as shared revenue, to every county and municipality in Wisconsin.

The bill also includes a provision allowing Milwaukee and Milwaukee County to pursue new and increased local sales taxes, respectively.

Milwaukee could enact a 2% city sales tax; it's currently the only U.S. city of its size without a municipal sales tax, according to research by the nonpartisan Wisconsin Policy Forum.

Milwaukee County could increase its sales tax from 0.5% to 0.9%. 

Both the city and county can enact the new taxes if their elected bodies -- the Milwaukee Common Council and Milwaukee County Board of Supervisors -- approve them with two-thirds majorities.

What this means for you and Milwaukee

According to a statement from Council President Jose Perez, city leaders estimate enacting a new city sales tax would generate $193 million per year in new revenue.

The Wisconsin Policy Forum estimated that without a drastic boost to city revenue, Milwaukee would have to cut about $150 million -- equivalent to about 25% of all city spending -- from its budget by 2025.

"This is life or death for Milwaukee," Ald. Jonathan Brostoff said after Tuesday's council meeting, indicating he planned to vote in favor of the new sales tax.

Currently, when people make a purchase in Milwaukee County, they pay 5.5 cents in sales taxes for every dollar they spend; 5 cents goes to the state, and a half-cent goes to the county.

If both the city and county enact their new taxes under the shared revenue bill, that tax total would increase to 7.9 cents for every dollar spent. The state's share wouldn't change; two cents would go to the city, and 0.9 cents would go to the county.

How Milwaukee's restricted, and why it's leading to a lawsuit

Ald. Marina Dimitrijevic, who ran Tuesday's meeting in place of Perez due to a family emergency, told reporters the council will vote on the sales tax at its next meeting on July 11.

Dimitrijevic added the council's steering and rules committee will discuss next Monday whether to take up a measure directing the city attorney's office to have outside lawyers explore where the city might be able to successfully challenge parts of the new law that limit how Milwaukee can use its tax dollars.

As part of a compromise with Evers, the Republican-controlled Legislature included a series of conditions specific to Milwaukee.

The law states Milwaukee can only use its sales tax revenue to pay off pension debt and fund public safety, including police, fire and the local court system.

Some of the other restrictions include:

• Two of the city's nine Fire and Police Commission members must be picked from a list submitted by Milwaukee's fire and police unions
• The commission could no longer set police department policy, which is currently a level of power rarely seen in the U.S. for civilian oversight boards
• Milwaukee must reinstate school resource officers, and deploy 25 of them across the school district
• The city cannot use any tax revenue (sales or property) to fund Diversity, Equity and Inclusion positions, nor can it spend tax dollars on the streetcar, known as "The Hop"

"The city of Milwaukee was uniquely called out on a number of items," Dimitrijevic said. "The members of this Common Council only have before them on July 11 the sales tax and funding opportunity, but at the same time, as you can see, we have a united voice in being very opposed to some of these attacks on local control."

Ald. Mark Chambers said he was undecided as to whether he would vote in support of the sales tax, but added he fully backed any effort to throw out the law's Milwaukee-related restrictions.

"They wanna say it was our negotiation. I don't think it was a negotiation," Chambers said. "I think it was a hostile takeover."

In a statement, Jeff Flemming, a spokesperson for Mayor Cavalier Johnson, said the mayor's staff had also weighed the possibility of a legal challenge.

"That's a topic that has been actively discussed by the administration since the provisions were included months ago," Flemming wrote. "Obviously, it's not something we could discuss while legislative action was pending."

The state's top GOP lawmaker, Assembly Speaker Robin Vos (R-Rochester), said the council was misplacing its priorities when asked about its response to Evers signing the bill.

"After a historic opportunity for the city of Milwaukee to reset their finances, it seems like they should turn their attention to actually doing that instead of focusing on frivolous lawsuits," Vos said in a statement.

So, would a lawsuit actually change anything?

Any challenge to this law would almost certainly cite Wisconsin's "Home Rule" statute, which determines how cities and villages can govern themselves.

Philip Rocco, an associate political science professor at Marquette University, said the city might have a leg to stand on by focusing on the language that singles out Milwaukee. 

"That, I think, gives the city a much better chance in the courts, because the provisions don't apply uniformly across the state," Rocco said.

However, both the Legislature and recent Wisconsin Supreme Court rulings have weakened the concept of "Home Rule."

A 2016 legal brief written by Claire Silverman, the lead attorney for the League of Wisconsin Municipalities, noted both lawmakers and the courts had successfully chipped away at local governments' autonomy. 

Silverman declined to be interviewed for this story. 

The brief was written before the state's highest court struck down a Milwaukee policy requiring city employees to live in the city.

However, Rocco noted the court will soon look different. When Justice-elect Janet Protasiewicz replaces retiring Justice Pat Roggensack in August, it will give liberals a 4-3 majority.

"It is not inconceivable that the court could look back at some precedents that it set down during the Walker administration, for example, and say, 'Let's take another look at that,'" Rocco said.

Rocco said he was curious to see how far the lawsuit would push. One possibility is the challenge would focus only on the local government funding bill.

Another option, though, could be challenging the very concept of Milwaukee being designated as Wisconsin's only "first-class" city under state law, which is how it's often been singled out in past legislation.

Council defiant on DEI, streetcar

Dimitrijevic said the council would also look to find other ways it could work around the shared revenue law's restrictions.

That includes a push to use federal money from the American Rescue Plan Act to double the funding set aside for the city's Office of Equity and Inclusion and Office of African American Affairs in the next budget.

She said the council will also look to apply for federal grants it can use to extend the streetcar to Fiserv Forum, as well as the Bronzeville and Walker's Point neighborhoods. Those prospects are unclear, as such federal grants often require some type of local match. 

When asked about that, Dimitrijevic said it was a matter of checking all available avenues.

"We'll take it each step-by-step," she said. "No matter what the outcome is, the fight is worth it, and today, and on June 26, we'll start that fight."