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Milwaukee's looming financial crisis: Is now a good time to talk about more help from the state?

TMJ4'S Charles Benson talks with the President of the Wisconsin Policy Forum about its new report that gets the conversation started.
Posted at 5:57 PM, Feb 21, 2022
and last updated 2022-02-21 18:57:08-05

MILWAUKEE — Rob Henken, president of the Wisconsin Policy Forum, likes to dive deep into issues many of us never think about, but often hear about in the news - like shared revenue.

What is shared revenue?

"Well, first of all, shared is the operative word here. This comes from a policy decision, a huge policy decision made more than a century ago, said Henken.

That decision was to start a state income tax. The money would be collected by the state and a portion would be shared with all municipalities.

Milwaukee being the biggest city, gets the biggest chunk of money, about $230 million dollars a year for its budget needs.

Is Milwaukee getting its fair share?

"It is complicated, you can look at $230 million and no matter how you slice it, that's a lot of money, said Henken.

On the other hand, that $225 million to $230 million is the same exact amount as it was 20 years ago, so it has been stagnant for more than two decades.

Meaning, as Milwaukee and other municipalities costs have gone up - shared revenue has not kept up.

Costs for essential services like fire and police is one. The other major source of taxation for local governments is property taxes, but even that revenue stream has been limited.

Enter the state's current $3.8 billion dollar surplus. Henken's group just did a report on the state's budgets surplus and what it means for state-local relations.

Benson: So what is the argument that lawmakers should be looking at when it comes to the budget surplus and how to help in shared revenue?

Henken: I think Charles that an argument can be made that this revenue structure needs to be reexamined and potentially tweaked.

Henken knows that is easier said than done.

He's not suggesting a surplus spending binge with money that could go away down the road, but he knows now would be a good time to talk about ideas that could help big and small cities.

"There can also be ways to link more money to other things that maybe local governments should be doing to cut costs, like looking more at service sharing and consolidation," said Henken.

Finding a solution to Milwaukee's money problems will be a key priority for the city's next mayor.

But Henken says it's not just a Milwaukee issue.

"You really have a crisis situation in many communities for vital services that again aren't blue or red services, but services on which all citizens in the state of Wisconsin rely on," he said.

Services that will likely require more green.

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