ADVERTISEMENT

Evers proposes allowing local governments to raise taxes

February 12, 2021 GMT

MADISON, Wis. (AP) — Gov. Tony Evers wants to allow counties to be able to double their existing sales tax and allow larger municipalities to impose a new half-cent sales tax, if local voters approve.

The proposal announced Friday drew widespread support from local governments that would benefit from the additional money, which they said would lessen their reliance on property taxes. But the idea divided the state’s business community, with the statewide chamber of commerce opposing it but Milwaukee economic development groups backing it.

Evers said state budget plan will include the tax increase option for those local governments, which could generate additional money that he said could be put toward local roads, services, maintenance, public safety and public health.

The Democratic governor’s proposal will be submitted Tuesday to the Republican-controlled Legislature, which would have to approve of it before it could become law. The Republican co-chairs of the Legislature’s budget committee, Rep. Mark Born and Sen. Howard Marklein, both declined to comment.

“From the unexpected costs of the COVID-19 pandemic to the years of neglect and underfunding from the state, communities across Wisconsin have been under immense budgetary pressure, and they’ve been doing more with less for far too long,” Evers said in a statement announcing the plan.

Evers’ proposal would require approval of a referendum in the affected county or municipality before the local sales tax could be increased. Evers said by doing that, those who live in the area and would be affected by higher taxes could decide if they want to impose it on themselves.

Current law allows counties to impose a half-cent sales tax. Evers’ plan would allow them to double that. All but four of the state’s 72 counties currently impose the tax. Under the plan, municipalities with 30,000 or more residents could impose a half-cent sales tax for the first time. That would apply to more than two dozen cities across the state, including Milwaukee, Madison, Green Bay, Kenosha, Racine, Appleton, Eau Claire, Oshkosh, Janesville, La Crosse, Wausau and Beloit.

The state sales tax rate is 5%.

The proposal won support from groups representing local governments. Both the Wisconsin Counties Association and the League of Wisconsin Municipalities said the sales tax option would relieve the reliance on property taxes to fund local services and state-mandated programs.

“Wisconsin counties have very few options for funding local services,” said Wisconsin Counties Association leader Mark D. O’Connell. “This announcement has the potential to provide meaningful and long-term property tax relief to Wisconsinites.”

Business and government leaders in the city of Milwaukee and the county also heralded the proposal.

ADVERTISEMENT

“This could lead to a new way to move Milwaukee forward with a more balanced fiscal structure and make the investments necessary to keep metro Milwaukee a region of choice,” said Tim Sheehy, president of the Metropolitan Milwaukee Association of Commerce.

But Wisconsin Manufacturers and Commerce, the state chamber that typically supports Republicans, came out against it. The idea has generated bipartisan support in the past, but never enough to pass the Legislature.

“Wisconsinites are still reeling from the worst economic downturn in a generation, and the governor’s response is to make it more expensive to purchase everyday items,” said the group’s lobbyist, Scott Manley.

Evers has announced several budget proposals ahead of the release of his plan next week. That includes accepting federal Medicaid expansion to help pay for $150 million in mental health programs; legalizing medical and recreational marijuana; lowering prescription drug costs;creating a $500 caregiver income tax credit as part of a $600 million investment in long-term care; and e xpanding programs to benefit agriculture and rural Wisconsin.