Evers proposes plan to increase local government aid by over $500 million

Gov. Tony Evers announced his official plan Tuesday to boost state aid to local governments by over $500 million, a week before he is slated to reveal his full two-year budget proposal.

Evers’ proposal addresses longtime calls from local officials to increase the money available to local governments via a budget provision that would dedicate 20% of the state’s sales tax revenue to local governments — an idea first proposed by Republican leaders — and by allowing Milwaukee County and other local governments the option of imposing a higher sales tax. 

“The state must fulfill our obligation to ensure our local partners can meet basic and unique community needs alike, and this historic investment will ensure that we do,” Evers said in a statement. “I look forward to working with the Legislature to find common ground in the weeks and months ahead to fund our communities now and with growth into the future.”

The proposal to change Wisconsin’s shared revenue formula would provide an additional $576 million to local governments in 2024, according to a release. The additional money would be split between public safety and general fund aid. 

Under Evers’ plan, 43.4% of the total funds — around $250 million — would be allocated for public safety aid, which includes costs to support law enforcement, fire, and emergency medical services and courts and district attorneys’ offices. No government would receive less than $10,000 for the public safety aid distribution, according to a release.

The other 56.6% of the aid — or $326 million — would be distributed as general aid to local governments. Of this, municipalities would receive 70% — or $228.3 million, while counties would receive 30% — or $97.8 million.

Tying shared revenue to a percentage of the state’s sales tax would likely allow local governments to see a yearly increase in the amount they receive from the state since sales tax revenue tends to grow each year. The proposal includes the stipulation that no local government may receive less than 95% of their prior year’s allocation.

Details on the distribution to each local government in the state will become available next week at the time of the governor’s budget address, according to the press release. 

Evers’ budget proposal also addresses calls from Milwaukee and Milwaukee County, which are Wisconsin’s largest state aid receivers, to allow them to collect additional revenue. The county would be able to impose an additional 1% sales tax on top of the 0.5% local sales tax it already has. 

The tax would need to be approved by a local referendum to take effect. If adopted, 50% of the revenue from the new tax would be distributed to the city of Milwaukee.

The Democratic governor’s plan would also allow Wisconsin’s other counties and municipalities with populations over 30,000 to potentially adopt an additional 0.5% sales tax. Counties are already allowed to levy a 0.5% sales tax, so this would mean a total 1% sales tax for counties that adopt the additional tax. 

The sales tax option is meant to allow counties and municipalities to diversify local revenue sources and better empower local governments to fund police and fire protection, EMS, transit, roads, and other important services, according to the release. 

Evers will announce his full budget proposal on Feb. 15. After Evers’ announcement, the Joint Finance Committee will spend a few months rewriting the budget before the Legislature votes on the spending plan and sends it to Evers to be signed.