Shared revenue shake-up: GOP plan boosts local govt. aid while setting new requirements for Milwaukee

 

MILWAUKEE (CBS 58) -- It was an image rarely seen in recent Wisconsin politics: the state's top GOP lawmaker, Assembly Speaker Robin Vos, stood on a platform with Milwaukee Mayor Cavalier Johnson and Milwaukee County Executive David Crowley to announce they'd agreed on the framework of a deal to revamp how the state funds its local governments.

But following Thursday's press event at the Wisconsin Center, which included an array of state lawmakers and local officials from all over Southeast Wisconsin, plenty of questions remained because there was still no actual bill listing everything Assembly Republicans' shared revenue plan contained. 

Still, the news conference offered new details about what the plan will include. For Milwaukee, it meant access to a revenue boost that would allow the city to avoid a full-blown fiscal crisis. In exchange, the liberal city would have to adopt policy positions conservative state lawmakers prefer.

Wisconsin currently divides $753 million annually among its counties and municipalities. That shared revenue figure has been frozen since 2004. Under the plan unveiled Thursday, 20% of Wisconsin's state sales tax collections would go to local governments. That would amount to an estimated $1.5 billion.

Without a bill, it's still unclear how the state would divide that new shared revenue pot, but Vos and other Assembly GOP leaders said at different press events Thursday every community in the state would receive at least a 10% increase in state funding.

"It is really refreshing to know we have the same goal in mind," Vos said. "And, while we might not always take the same path, I think we're hopefully arriving at the same place."

The Assembly GOP plan would let Milwaukee adopt a 2% city sales tax. Milwaukee is currently the only U.S. city of its size that is not allowed to have a municipal sales tax.

Counties are currently allowed to charge a 0.5% sales tax. The proposal would allow Milwaukee County to increase its sales tax to 0.875%. 

Both the city and county could only use its sales tax money to pay off existing pension debt. New workers would be funneled into the state pension system.

Beyond that, the state would impose a series of policy requirements for Milwaukee:

• The city would have to hire additional police officers
• School resource officers would have to return to Milwaukee Public Schools
• Milwaukee would be banned from using tax revenue on a streetcar route extension
• Milwaukee's Fire and Police Commission would be barred from setting police department policy

Crowley said local officials were still negotiating to limit the state-imposed conditions.

"Anything in this bill that doesn't specifically relate to Milwaukee County and the city of Milwaukee," Crowley said. "We're gonna continue to fight to remove those types of things."

Who gets the sales tax say?

In order to have the new local sales taxes, both the city and county would need to pass referenda. Vos indicated those would come in the form of votes by the general public.

He said he wasn't concerned voters would reject the idea of being taxed more strictly for the purposes of paying off pension debt.

"Having spent this much time with the county executive and the mayor, I have no doubt that their salesman ability is going to come to full fruition," Vos said. "And that the voters are gonna see the wise decision that they're gonna make."

Tim Sheehy, president of the Metropolitan Milwaukee Association of Commerce, echoed concerns about whether voters would pass city and county sales tax hikes. Sheehy said he would prefer if local elected officials cast those votes.

"I'm hopeful, as this bill works its way through the process, that the referendum is by the county board and Common Council," Sheehy said. "And not a general referendum question."

'So many strings that are attached'

The proposal includes an additional $300 million in incentives for local governments that come up with new ways to merge services. Beyond that, there's another $227 million available for local government programs tied to police, fire, EMS, emergency dispatch, transportation and public works.

Waukesha County Executive Paul Farrow criticized the plan; he said his government had already been combining services where practical. Farrow added he was also frustrated with limitations on how cities and counties could use their share of the $227 million fund.

"There are so many strings that are attached," he said. "The 911 [response] money that they're talking about, we can't use for personnel costs. Dispatch/911 is all about personnel."

Crowley, who's been extensively involved in the talks, acknowledged he'd prefer fewer state-imposed rules for how to use the money. 

"I think anyone would want to have that type of flexibility," Crowley said. "And, again, when we think about this bill, we still have a long road ahead of us."

Rep. Mark Born (R-Beaver Dam), a co-chair of the budget-writing Joint Finance Committee, said some of the requirements were necessary to ensure consistency in what types of essential services received support.

"I think there are times where local control is absolutely the best, as a former local official," Born said at a separate press event in Madison. "And there's times where statewide standards are needed, and that's always the balance we're looking at."

When asked about concerns the plan meddled too much with local decision-making, Vos said the disagreements were expected in a complex negotiation.

"One of the things that I've found is that, in any deal, you are gonna find things in it that you think are fantastic," Vos said. "And you are gonna find things in there that, perhaps, if it was your writing, you wouldn't put them in there."

For the plan to become policy, Senate Republicans, who've been reserved in their response so far, and Governor Tony Evers will have to agree with enough of those things.