A quiet trend may be emerging after the midterm election on Tuesday: Wisconsin municipalities, hampered by years of slow revenue growth, are passing referendums in record numbers to raise cash for road projects and pay for services.
At least 18 cities, towns and counties throughout the state sought voters’ approval or recommendations on Tuesday for proposals to raise taxes to pay not only for infrastructure but also police and fire costs and other expenses. In at least eight of these referendums, municipalities specifically asked voters if they’d be willing to shoulder a tax increase or borrow more for road projects.
The election furnished evidence that municipal referendums may be becoming more common. Such proposals were relatively rare for years following 2006, when state lawmakers set limits on local governments’ ability to raise tax levies, said Curt Witynski, deputy executive director of the League of Wisconsin Municipalities.
They’ve since become far more common. In a report written by Witynski and released in January, the league found local governments had, from 2006 to November 2017, passed 31 referendums giving permission for increases in local tax levies.
“My sense is that communities are exploring the option more internally,” Witynski said.
Local governments may be turning increasingly to referendums to raise revenue after weathering years of policies limiting how much they can bring in through property taxes. Gov. Scott Walker’s budget in 2011 tied increases in any given year to the rate of new construction in the previous year. As a result, local governments who have not seen recent development have found themselves dealing with stagnant revenue collections even as inflation and construction costs have risen, Witynski said.
Without changes to those rules, municipalities may continue to lean on referendums. It’s uncertain if a divided state government led by Gov.-elect Tony Evers, a Democrat, and a Republican-controlled Legislature would agree to loosen the restrictions, Witynski said.
“I don’t think we’ll go the other direction,” he said. “I think it will steadily increase unless there are changes made to levy limits. There could be simple changes where there were inflationary increases. If at least your levy could go up that amount we might see fewer referendums.”
With 146 miles of roads to maintain, the village of Richfield found itself unable to pay for a increasing list of needed repairs, and decided to go to referendum this fall, said Jim Healy, village administrator.
The village’s road budget of about $750,000 paid for only about a mile or two of road construction a year, Healy said. And Richfield’s engineering department found about a third of the roads in the village — some 45 miles — were in need of repair. New construction in the village has generally allowed local officials to raise the local levy by only 1 percent or 2 percent a year — enough to bring in about $30,000 worth of new revenue.
On Tuesday, though, voters signed off on a referendum proposal calling for the village’s road budget to be doubled to $1.5 million over the next nine years. The measure passed narrowly; only 52 percent of those who voted were in favor of it — a victory in “one of the more conservative communities in the most conservative county in the state,” Healy said.
Even with such successes, municipal referendums still didn’t pass at nearly same rate on Tuesday as did school funding measures. Of the 18 municipal requests on the ballot, voters approved five of the eight proposals concerning levy increases for roads. Local governments also turned to voters for permission for specific construction projects, such as a $4 million fire station in the town of Delavan and a project to convert two De Pere public pools into aquatic centers.
La Crosse County voters, meanwhile, also considered a smorgasbord of referendum questions seeking advice on how to overcome a $101 million shortfall in the county’s road budget. Voters there agreed that the county needs to spend $5 million more a year on road work, and expressed support for a new resort tax to raise money for that purpose. Before any such proposal could take effect, it would need the Legislature’s approval.
Meanwhile, La Crosse County voters rejected an advisory proposal seeking support for a new wheel tax and higher property taxes, also to pay for roads. Elsewhere, in St. Frances, a similar advisory referendum failed narrowly, by a 2 percentage point margin.
Healy said local officials consider a referendum one of the few ways they have of dealing with crumbling roads. Other places in Washington County also had referendum proposals on the ballot on Tuesday but did not enjoy the same success as Richfield.
A proposal in Trenton failed by 10 points and West Bend rejected sections of a four-part advisory referendum seeking support for a wheel tax and property-tax increase, both of which would be used to raise money solely for roads.
Local officials around the state no doubt watched these referendum results closely, Healy said, and may be considering putting similar proposals of their own before voters.
“I think it would irresponsible of us not to,” Healy said. “Being fiscally conservative doesn’t mean kicking the can down the road.” Follow @natebeck9