State lawmakers passed a sweeping, bipartisan agreement to send more money to local governments last year, but many Wisconsin municipalities are still facing budget challenges.
The shared revenue deal allowed Milwaukee County to raise its sales tax, which was expected to generate millions in revenue. But receipts have been lower than projected. Joe Lamers, director of the county’s office of strategy, budget and performance, said the county has collected close to $10 million less than anticipated this year.
Eau Claire County Executive Kathryn Schauf says her county currently has a budget shortfall of about $5.2 million.
Counties are mostly funded through state aid and property taxes, neither of which have kept pace with inflation. Most counties also have a sales tax, which Schauf said has value as a source of revenue. “It’s also very volatile… and so it’s also a revenue source that we don’t really have a lot of control over,” she said.
Jason Stein, president of the Wisconsin Policy Forum, said the property tax rate for municipalities has been tied to the rate of net new construction since 2011.
“The statewide average for net new construction for municipalities in Wisconsin has never risen above 1.7 percent since the Great Recession,” Stein said, including recent years when inflation has been as high as 8 percent.