Vos Costs Milwaukee Billions of Dollars
The Assembly Speaker’s decision to deny local control to the state’s largest, most diverse city is going to be costly. And when will Milwaukee start standing up for itself?
The Recombobulation Area is a weekly opinion column by veteran Milwaukee journalist Dan Shafer. Learn more about it here.
It’s not often that a few select words at a legislative roundtable held over Zoom can have billions of dollars of impact and dramatically alter the trajectory of a major American city, but that’s exactly what happened last week in Wisconsin.
As everyone who follows politics in Wisconsin expected, Assembly Speaker Robin Vos put the kibosh on Governor Tony Evers’ proposal to allow voters a say in their local sales tax. And though the outcome was a predictable one, the issue is not one that’s going away any time soon, and warrants greater discussion. This decision will have profound ramifications for local government throughout the state, nowhere more so than in Milwaukee.
Let’s zoom out for a moment.
Nearly two years ago, a coalition of elected officials, business and community leaders formed to launch a new effort called Move Forward MKE. It was headlined by a pitch to the state government to allow Milwaukee to raise its sales tax, giving the city and county greater control over its finances and future.
Milwaukee has rather high property taxes, but one of the lowest sales taxes of any major city in America — the 6th lowest rate of the 115th largest U.S. cities. This pitch became an opportunity to balance that equation -- raising the sales tax and lowering property taxes, funding essential services, and paying the cost of capital projects, deferred maintenance and infrastructure needs that have soared into the billions.
A one-cent increase in the sales tax would bring an estimated $160 million to Milwaukee every year.
This would be a big, big deal. As the Wisconsin Policy Forum has exhaustively detailed in several studies over multiple years, the needs in the state’s largest, most diverse city and county are extensive — particularly when it comes to basic infrastructure, which was nearing crisis levels even before the pandemic.
Not only would that annual nine-figure influx of cash make a huge difference for this community — on everything from health to racial equity to public safety to emergency services to snow removal to housing to parks to transit to roads to water and on down the list of local government essentials — it would create a new revenue stream that’s less beholden to the whims of what happens down the road at the Capitol in Madison. As we’ve seen in crisis over this past year, that’s not always a place that can be relied upon.
So why can’t Milwaukee just vote on this? It’s a simple enough proposal, why isn’t it done already?
We can’t. With the way the law works in Wisconsin, local governments need permission from the state government to even start that conversation and make such a change at the ballot box.
Having a Democratic governor in office for the first time in nearly a decade cracked open the door for this to be a possibility, but the effort quickly fizzled upon encountering opposition from the Republicans running the State Legislature.
So much for local control.
This is part of a long, ongoing, often-overlooked problem in Wisconsin. The state has not been kind to local governments for much of the past 25 years. State shared revenue provided to municipal and county governments decreased by a whopping 47% between 1996 and 2020, after adjusting for inflation, according to the Wisconsin Budget Project. This has hit Milwaukee especially hard, and is now costing the city $100 million per year.
This now means that Milwaukee has a real overreliance on property taxes -- 96% of local revenue now comes from property taxes, a number no other peer city across the nation is remotely close to. Wisconsin also places strict limits on property taxes.
What this all amounts to is that Milwaukee is being squeezed from all sides. And now its future is in real peril.
Here’s how County Executive David Crowley laid out the situation in his State of the County address on Feb. 24.
“As of the most recent data available, Milwaukee County’s growth has resulted in Milwaukee County taxpayers sending an additional $569 million to the state in 2018 than almost a decade ago, while at the same time the state returned $144 million less in state aids to Milwaukee County and its municipalities in 2017 than it did nearly a decade prior.
A local option sales tax would provide our residents a voice, and an ability to vote for a tool that allows us to capture the benefits of our own economic performance to invest in local priorities, while providing property tax relief.
Milwaukee County has undertaken significant efforts to improve the efficiency of our operations and pursued ambitious cost-savings efforts that generated a savings of nearly $289 million over the last 10 years.
Despite these efforts, the growing cost of state mandates will continue to drive up our costs by another $320 million by 2038. Continued expenditure reductions are not sustainable. We can’t cut our way out of this. In just six years, Milwaukee County will be forced to utilize all local tax dollars for state mandates, eliminating local funding for senior services, public safety, emergency services, disability services, bus routes and roads, along with cultural amenities including parks.”
Six years. In just six years, Milwaukee County faces a cliff. That is really not a long time from now. This situation is extremely serious and increasingly urgent.
But just days after Crowley delivered that speech, the most clear, simple solution to the problem was hastily taken off the table.
“There is no chance this is going to happen,” said Vos at a Wisconsin Counties Association roundtable discussion. “It is dead on arrival, never going to happen.”
Robin Vos’ decision on this issue is going to cost Milwaukee billions of dollars. The needs Milwaukee faces are not going away, and a sales tax increase that could have generated an estimated $1.6 billion over the next decade is not just being denied, he says it’s “never going to happen.”
It’s the height of fiscal irresponsibility, and it comes at a time when the Assembly Speaker could not appear more hypocritical on the issue of local control.
Throughout the pandemic, Vos and his party have preached local control over and over and over. Vos sued to remove the governor and health department’s abilities to respond to the pandemic on a statewide level, shifting responsibility to local health departments (later working to also undermine those efforts, but that’s a different story).
“As a Republican, I believe in local control,” Vos said in May after the State Supreme Court decided in his favor.
This belief is clearly selective. When it comes to Milwaukee, the Republicans running Madison almost never believe in local control. Why is the state’s largest, most diverse population so often treated differently than other parts of the state? What could it possibly be?
Blatant hypocrisy hasn’t stopped them before, though. And harsh financial realities, too, haven't stopped them from clinging to a damaging, ideologically rigid anti-tax policy.
Republicans will inevitably call for Milwaukee to make cuts, but as Crowley alluded to, there is really nowhere left for Milwaukee County to cut. And in the city of Milwaukee, the budget is tightening, too. And as we’re seeing over and over again amid this era of cascading crises, making cuts to basic functions of government is no way to govern. You can’t do more with less. You do less with less.
Perhaps the influx of funding for state and local government from President Joe Biden’s relief bill will make a real difference — an estimated $5.5 billion is headed to Wisconsin — but perhaps it will simply offset losses experienced during the pandemic. It will certainly make a real difference for communities across the state.
But just as is the case with state money from budget to budget, this funding does not come with the added benefit of local control.
So ultimately, what Vos’ decision on this locally-controlled sales tax will mean for Milwaukee is that things are not going to improve substantially any time soon.
There was an inevitability to what Vos had to say on the issue. No one expected this to go a different direction. But Senate Minority Leader Janet Bewley did her fellow Democrats no favors in that roundtable, flubbing a response and saying voters would be “not smart” to reject a sales tax increase. It was the latest reminder that Milwaukee is scarcely represented among Democratic legislative leadership -- Bewley is from Mason, Assembly Minority Leader Gordon Hintz is from Oshkosh, and of the 10 Democratic leadership positions in the Legislature, Kalan Haywood (the Minority Caucus Sergeant At Arms) is the only one from Milwaukee.
So maybe there needs to be more people going to bat for Milwaukee in the Legislature. Certainly, Milwaukee needs to be doing a better job going to bat for itself, period. A majority of officials at the city and county level in Milwaukee came out to back Evers’ proposal to give voters a say on the sales tax, but they could have done more to build support and make this truly connect with the community.
The business community and the Metropolitan Milwaukee Association of Commerce (MMAC), too, could be doing a whole lot more to advocate for the city it purports to represent. It backs the proposal, yes, but the contrast between the advocacy on this issue and the last major Milwaukee-based public funding debate with Bucks arena couldn’t be more stark. Why isn’t the MMAC doing more to stand up for Milwaukee on this issue at this critical moment? It is bafflingly frustrating.
Because if Milwaukee is not going to stand up for itself, it’s never going to get what it needs. Vos is the main offender here — as he so often is these days — but you’d be hard-pressed to say that any leaders from Milwaukee have truly put forth their best effort to make this happen.
So now, Milwaukee is left without answers. There is a billion-dollar hole where the solution should lie. The needs of the hundreds of thousands of people in this city and county will go unaddressed.
And what this saga shows more than anything is an all-too-frequent result: Wisconsin is standing in Milwaukee’s way.
Dan Shafer is a journalist from Milwaukee who writes and publishes The Recombobulation Area. He previously worked at Seattle Magazine, Seattle Business Magazine, the Milwaukee Business Journal, Milwaukee Magazine, and BizTimes Milwaukee. He’s also written for The Daily Beast, WisPolitics, and Milwaukee Record. He’s on Twitter at @DanRShafer.
Follow Dan Shafer on Twitter at @DanRShafer