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Gov. Evers proposes sales tax hike for counties, referendum needed

Posted at 10:00 AM, Feb 12, 2021
and last updated 2021-02-12 18:30:12-05

MILWAUKEE — Gov. Tony Evers has announced his 2021-23 biennial budget proposal and it includes a sales tax hike to give counties more local control over spending.

Gov. Evers proposes allowing counties to impose a 0.5 percent sales tax in addition to the 0.5 percent allowed under current law.

This increase would give counties the money needed for road repairs, public safety and public health spending.

This could be a big deal for the City of Milwaukee. The city has been calling for a higher sales tax for years, and if approved this would be a game-changer.

Counties have had the ability to raise the sales tax by 0.5 percent, and Milwaukee County has done so. Gov. Evers is now proposing another .5 percent for counties, and another .5% for municipalities like Milwaukee - for a total of a 1% increase.

“From the unexpected costs of the COVID-19 pandemic to the years of neglect and underfunding from the state, communities across Wisconsin have been under immense budgetary pressure, and they've been doing more with less for far too long,” said Gov. Evers. “The state should be setting the floor, not the ceiling, for local partners, and Wisconsin taxpayers should have a say in whether they want their communities to have more resources so their local government can keep providing critical services—that's pretty simple stuff. Our proposal puts the question back in the hands of the folks best positioned to make decisions for their community—local leaders and the people who live there.”

Before this happens, the governor's proposal must be approved by referendum by local residents, allowing residents to decide whether they'd like to utilize the potential money.

Wisconsin's current sales tax is 5 percent. under the current law, counties have the ability to impose an increase of 0.5 percent.

As of now, 68 out of 72 counties have enacted the 0.5 percent county sales tax.

Milwaukee Mayor Tom Barrett applauded Evers' proposal saying, “We are very appreciative of the Governor’s efforts and his recognition that we need to hit the reset button in our fiscal relationship. The inclusion of the proposal to increase a sales tax via referenda allows diversification in our revenue stream, at the desire of our citizens. Clearly, placing Milwaukee in control of its own future."

Raising the sales tax is an idea republican lawmakers are unlikely to support, and some associations have already voiced their opposition.

“Wisconsinites are still reeling from the worst economic downturn in a generation, and the governor’s response is to make it more expensive to purchase everyday items,” said Wisconsin Manufacturers & Commerce Executive Vice President of Government Relations Scott Manley. WMC is a business trade association representing more than 3,700 employers.

Lawmakers would have to sign off on the proposal and locals would have to vote yes on a referendum to increase the sales taxes within their community.

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