Referendum requirement spurring debate in Milwaukee sales tax proposal

In the proposal to share revenue to help the city of Milwaukee and the county resolve their budget crisis, the question has arisen as to whether elected officials or voters should be able to approve the new Milwaukee sales taxes.

Milwaukee could increase its sales tax by 2% to fund its operations, thanks to a bill that was introduced this week. Milwaukee County could, however, enact a 0.375% increase. The bill would require that the increases in sales tax be approved by a binding referendum.

Negotiations between Milwaukee officials, and both parties in the state government, led to this proposal. Nevertheless, there are still disagreements on a number of points.

Milwaukee Mayor Cavalier Johnston, at a hearing on Thursday of the Wisconsin Assembly Committee on Local Government in Madison, Wisconsin, stated that he wanted the bill changed to allow the 2% sales tax for the city of Milwaukee to be implemented by a vote from the Milwaukee Common Council rather than through a referendum of voters. Johnson expressed 'grave concern' that a referendum in Milwaukee could pass, given the fact that voters in Racine and Hales Corners rejected similar referendums relating to funding for public safety.

Johnson stated that a local referendum would create significant uncertainty and no one wanted to go back to the hard work they had done to reach this point.

Milwaukee County Executive David Crowley and the Metropolitan Milwaukee Association of Commerce have both said that they also want to replace the referendum requirement with votes of local legislative bodies.

Assembly Speaker Robin Vos who was involved in the negotiation of the current proposal for shared revenues, defended the referendum requirement on Friday. He spoke about the bill at a Milwaukee Press Club Newsmaker luncheon on Saturday.

Vos stated that people wanted the easiest possible way to increase taxes. Vos said: 'I disagree with that and I believe that's part of the issue. I believe it should be quite a cumbersome procedure.

Tony Evers also requested that the referendum requirement to be removed.

Vos stated that the Milwaukee County and Milwaukee City funding proposals would have cost more than he had originally intended. He said that the trade-off was the requirement for local referendums to allow voters to decide on the issue.

Vos stated that he still believes it should be a vote. Vos said that among the many things Gov. Evers' staff has told us that he wants us to change this.

Officials from the city have been pushing for this new funding source to avoid major cuts in operations and employment. Milwaukee's Budget Department predicts that by 2024, the gap between revenue and costs will reach $156.7 million. Johnson said on Thursday that Milwaukee is on the 'path of catastrophic budget cuts' because it relies solely on property taxes for funding.

Johnson stated that 'by the time 2025 comes around, the city is going to be insolvent, and this will lead to massive cuts'.

Local officials have been voicing their opposition to the referendum question since last week, when the proposal for a state-shared revenue was announced. The proposal would also prohibit the city from using tax dollars to operate or maintain its streetcar system. The city also could not approve any new tax-incremental financing to expand the streetcar system.

Milwaukee relies on TIF funds to pay for its local share of the construction costs in the first two phases of the streetcar.

Johnson said on Thursday that he is'strongly opposed' to the limitations on local control imposed by the bill.

Johnson stated that he wanted local officials to decide on local issues, such as transportation expenditures, the locations of police deployment and the civilian oversight structure for the police department.

Johnson said, 'My preference is that the city of Milwaukee, via the Common Council and me as Mayor, can make these decisions at the local level.