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Your Business Advocate: Plan Put Forward to Increase Local Government Revenue

For years, county and municipal government budgets have been under strain for a variety of reasons. For some, their troubles have been a result of poor budgeting. For many others, the double hit of state-imposed levy limits and decreases in shared revenue have resulted in reduced services and staffing.

Legislative Republicans this week introduced Assembly Bill 245 which makes numerous changes to county and municipal funding. In general, this proposal would increase funding to municipalities by $176 million and $50 million for counties. Any new funding would have to be spent on “core services”, defined as police, fire protection, emergency medical services, emergency response, communications, public works, and transportation.

Most of the new funding would come from dedicating 20% of the current sales tax revenue to a local government “trust fund”.

AB 245 generally favors smaller municipalities as they had been disfavored under the current formula from the larger cities.

The bill also provides the City and County of Milwaukee additional powers. Pending approval via a referendum, the city would be able to impose an additional 2% sales tax and the county a .375% sales tax to help address pension obligations.

The Assembly Local Government Committee is holding a public hearing on the bill today. AB 245 will likely not be included in the budget, as Speaker Vos has indicated his preference that Democrats help pass the bill since major pieces affect only Milwaukee.

While several senators have signed onto the bill, Majority Leader Devin LeMahieu has yet to give his support.

Governor Evers introduced a similar plan in his budget, but with far fewer requirements for local governments. Just this morning, Evers released a statement indicating he would veto the bill in its entirety. He feels that the state can provide even more dollars than what is proposed.

Area Representatives Nate Gustafson (R), Dave Murphy (R) and Ron Tusler (R), along with Senator Rachael Cabral-Guevara (R) have co-sponsored the bill as of Wednesday.