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Budget crunch: Why cities like Milwaukee are scrambling to keep up with core service costs

TMJ4's Charles Benson talked with Milwaukee Mayor Cavalier Johnson about another big conversation going on around how much money the state should be sharing with municipalities.
Downtown Milwaukee
Posted at 4:43 PM, Aug 29, 2022
and last updated 2022-08-29 19:25:51-04

MILWAUKEE — It's budget season for Milwaukee and local governments across the state and that means hard questions like the ones you are having at home: How much to spend and what to cut.

TMJ4's Charles Benson talked with Milwaukee Mayor Cavalier Johnson about another big conversation going on around how much money the state should be sharing with municipalities.

The property taxes from your house are a key revenue source to help run the city government - but it's not enough.

Shared revenue is also important. It is money collected by the state from income, sales, and corporate taxes and shared with Milwaukee and all local governments - but again, it's not enough.

That's a problem for Milwaukee Mayor Cavalier Johnson as he puts his first city budget together next month.

"The revenues just are not flowing the way that they used to, and then that's having a direct effect on our ability to fund core city services," Johnson said.

Johnson says shared revenue not only dropped but flatlined since 2000. Here's what that state money paid for 22 years ago.

"We used to get enough money to pay for the entirety of the police department budget, which is our largest budget expenditure, the entirety of the fire department budget and have several millions of dollars left over to invest in roads, invest in other priorities for the city," Johnson said. "Now we don't even get enough back in shared revenue to pay for the police department's budget."

Johnson is talking with lawmakers to beef up the shared revenue, especially with the state enjoying an expected $5.4 billion dollar budget surplus.

"Yes, we do," said Johnson when asked if the city needs another source of revenue to tap into.

The mayor says if Milwaukee could get an additional half-cent sales tax on money spent in the city - something state lawmakers would have to allow - it could help with core costs and potentially reduce property taxes.

"Every other large city in America has the ability to generate dollars at the local level outside of the property tax," said Johnson. "We should have that same power here in Milwaukee."

According to theLeague of Wisconsin Municipalities, cities in neighboring states of Iowa, Illinois, and Minnesota have a more diverse revenue source to pay for local services including sales tax options.

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