$160M QUESTION: Lawmakers discuss Milwaukee County tax proposal that’s likely to go nowhere

Milwaukee officials pitched state lawmakers on Thursday on a plan seeking a 1% increase in the county sales tax to prevent projected budget cuts, even though the attempt is unlikely to move ahead in this year’s waning legislative session.

The state Assembly’s Committee on Ways and Means held a public hearing on a bill that would give officials the authority to hold a voter referendum on a plan that would bring the local sales tax to 6.5 cents for every $1 and raise $160 million in additional annual revenue for Milwaukee County and its municipalities. The proposal has been pushed for months by Milwaukee area leaders as a way to prevent likely reductions in services and pay for long-deferred infrastructure work.

But with a Legislative session that’s winding down — the state Assembly recently ended its work for the year — the push for a new revenue source is likely to go nowhere.

The committee chairman, John Macco, R-Ledgeview, said a discussion of the sales tax proposal was worth having nonetheless.

“Although we might not have quick relief for you at this point, I appreciate the conversation,” Macco told Milwaukee Mayor Tom Barrett, who testified before the committee.

Milwaukee area municipalities have long decried a state funding formula that doesn’t return as much tax revenue to Milwaukee County and its cities as the state collects.

Billed as the “fair deal” initiative, Assembly Bill 521 would allow the county to raise its sales tax if voters OK that plan in a referendum. The county and municipalities would split the bulk of the revenue generated, putting 7% of the total toward public-health infrastructure — such as lead pipe replacement — and 25% toward offsetting property taxes, which local officials now rely on almost exclusively to fund their budgets.

But the bill has failed to gain traction since it was introduced in October. Local officials initially hoped to get the referendum question on the April 7 ballot, but such a step now appears unlikely. Republicans who control the Legislature have been skeptical about signing on to a bill that could result in a tax increase.

Rep. Kevin Petersen, R-Waupaca, said the plan would increase a regressive tax that falls disproportionately on low-income county residents.

“This is a straight-out tax on the people who already can’t afford it,” he said.

Milwaukee County Executive Chris Abele said failing to drum up another revenue source will force local lawmakers to make budget reductions that will fall most on vulnerable residents. Abele, who is not seeking re-election in April, said whoever replaces him will have to deal with reductions that could impair the city’s progress and stunt economic growth.

The county is struggling with a backlog of deferred construction projects. The nonpartisan Wisconsin Policy Forum has called the situation “seemingly insurmountable” and said the county must also plan for a replacement of its safety building, a project whose price could exceed $250 million.

“Everybody should be clear that inaction comes with a very, very significant cost,” Abele said.