Q: What is the problem the legislation is seeking to solve?
A: There is a great need to provide property tax relief to Milwaukee County taxpayers. Milwaukee County and its municipalities rely heavily on property taxes to fund necessary services and operations. In fact, Wisconsin municipalities have the 7th highest reliance on property taxes in the country.
There is also a critical need to increase funding for Milwaukee County and its municipalities. As a result, we are asking the Wisconsin State Legislature to pass legislation that would allow us to hold a binding referendum, in which we can ask Milwaukee County voters to decide if Milwaukee County should increase its sales tax by 1 percent.
Q: What is the legislation proposing?
A: If authorized by Milwaukee County voters through a binding referendum, an additional 1 percent sales tax would be enacted in Milwaukee County. It would generate around $160 million annually, capturing revenue from visitors and non-County residents and bringing property tax relief to residents. A minimum of 25 percent of the revenue generated would be set aside for property tax relief, and the remaining revenue would be split between Milwaukee County and its 19 municipalities to meet critical needs.
Q: Why is state legislation required?
A: Milwaukee County cannot implement a sales tax increase without securing approval from the State Legislature.
Q: How much does Milwaukee County send to the State of Wisconsin compared to how much is returned to Milwaukee?
A: Milwaukee County taxpayers sent $569 million more to the state in 2018 than they did in 2009. In contrast, the state returned $144 million less to Milwaukee County and its 19 municipalities in 2017 than it did in 2009.
Q: Why raise the sales tax instead of using other sources of revenue?
A: No other potential source of additional new revenue provides the ability
to generate the needed revenue while providing property tax relief.
Q: What is Milwaukee County's current sales tax structure?
A: Milwaukee County has a combined 5.6 percent sales tax that breaks down as follows:
- 5.0 percent: State of Wisconsin
- 0.1 percent: Miller Park Stadium District
- 0.5 percent: Milwaukee County
Q: How does Milwaukee County's sales tax rate compare?
A: Milwaukee County's sales tax is one of the lowest in the country.
Wisconsin municipalities have the seventh-highest reliance on property taxes. According to the Wisconsin Policy Forum, "No other Midwestern state relies so heavily on the property tax and so little on other taxes to pay for municipal services."
In contrast to a heavy reliance on property tax revenue, Wisconsin municipalities rank 43rd for their reliance on municipal sales taxes.
Source: Wisconsin Policy Forum. “Dollars and Sense: Is it time for a new municipal financing framework in Wisconsin.” February 2019 (See Figure 1 on page 4.)
Q: How much revenue would be generated by a one percent sales tax increase?
A: A one percent sales tax increase is projected to raise about $160 million annually.
Q: How much of the new revenue would go to property tax relief?
A: The legislation calls for a minimum of 25 percent of the $160 million, or $40 million, to go to property tax relief.
Q: Why not just tighten our belts and cut budgets further?
A: Over the past decade, Milwaukee County has demonstrated its fiscal responsibility and utilized every tool available to make substantial changes to address the County’s budget crisis. Despite these major cuts and efficiencies, there is a critical need to increase funding for Milwaukee County and its municipalities. Without a new source of revenue, the County will not be able to maintain its facilities, preserve community assets and provide the services residents have come to expect.
Q: Where did this idea come from?
A: Milwaukee County Board Chairman Theodore Lipscomb, Sr. and County Executive Chris Abele launched the Fair Deal Workgroup in 2018 to explore new revenue options to address the structural deficit. In conjunction with state and local community and business leaders, the Fair Deal Workgroup proposed recommendations that included allowing local control to generate new revenue and reduce the current reliance on property taxes through a binding referendum process.
More information about the Fair Deal Workgroup can be found here.
Q: Isn't a sales tax regressive?
A: This is a common thought, however, in Wisconsin, sales tax exemptions make our sales tax less regressive. Wisconsin exempts a long list of services and products from the sales tax, such as groceries, medicines, medical equipment, services (like an oil change or a haircut), and many other items, which make the tax less regressive. For a complete list of all Wisconsin sales tax exemptions, click here.
Q: Does the business community support this idea?
A: Yes. There is support for this proposal from both the Greater Milwaukee Committee (GMC) and the Metropolitan Milwaukee Association of Commerce (MMAC).
The leadership of these business organizations recognizes that this proposal gives Milwaukee the certainty to plan for and execute a sound fiscal future that will make the greater Milwaukee area an even better place to invest capital, create jobs and attract and retain talent. Providing the ability for cities and the county invest in their future – reducing property tax, reducing debt and addressing critical infrastructure improvements – is good business practice.
Q: How does someone who supports this idea get involved?