Wisconsin is sitting on a $4 billion surplus, some counties would like a bigger piece of
that pie through the state's shared revenue. Back in 2023, a much heralded bipartisan shared
revenue plan for local governments was passed, allowing Milwaukee to raise its sales tax to
shore up services, while at the same time boosting state revenue coming to locals across the state.
But now the richest county in the state, Waukesha County, is looking at a $5 million budget shortfall
in 2025, and is beseeching the state to give more. Market University Professor of Political
Science, Philip Rocco, is an expert in all of this, and he joins us now. Thanks very much for being
here. Good to be with you. So I thought that this 2023 shared revenue plan was a great deal for
local governments. What happened? It was a big deal, right? It was the single largest increase
in shared revenue that local governments had received since 2000s. But the reality is that
compared to what cities, towns, villages, and counties had lost since the early 2000s,
because the formula wasn't updated for inflation, and because there were several big cuts to shared
revenue, it's really a fraction of what local governments and county governments had lost
in inflation adjusted terms since the early 2000s. And at the same time,
inflation has sort of proceeded to pace. That raises the cost of services for local governments.
And so while it was by no means a small thing, there are still challenges that local governments
around the state are facing. Is it striking that a county like Waukesha County regarded as the
wealthiest in Wisconsin would be in this position? No, I don't think it's particularly surprising.
In part because the shared revenue formula is not necessarily designed to advantage counties
like Waukesha receives one of the largest or lowest shares in per capita aid among counties
in the state. At the same time, the pressures that are on counties and municipalities around
the state are really pretty constant regardless of their wealth. So for example, there are inflation
pressures which raise the cost of doing things like sidewalk repair and street repair. But at
the same time, the property tax levy limit that the state sets has not been adjusted
to sort of take account of those inflationary pressures. And that really puts counties and
municipalities in a squeezed position. Is it your expectation that the state would do
something around those levy limits? I think that's possible. I think that that is if you
talk to local officials both in counties and municipalities, that's one of their key agenda
items. And so I would expect to see movement on that before I would expect to see movement on
sort of increasing formula funding under Act 12. So other counties raise their state sales tax
to fund needs and Waukesha wanted to. What happened with that? I think that was one of the things
that helps explain the shortfall and maybe why Waukesha is in this position, which is like a lot
of other counties, there was a push to increase sales tax by 0.5%. But there was unlike in Milwaukee
where the business community was in favor of that measure, both for the county and the city.
In Waukesha County, the business community, the Chamber of Commerce really opposed that. And so
the legislation was pulled sort of at the last minute to reevaluate it. Why are counties in
particular so strapped? Counties are important because they really pull double duty in
Wisconsin government. They're both local governments in their own right that offer things
on a discretionary basis to their residents. But at the same time, they are service providers
and agencies of the state. And so they have a lot of responsibilities that they can't easily get
out of. And a lot of their budget is sort of spoken for by the state. And so that, especially
in conditions where there's sort of inflationary pressure, that can put an additional vice
grip, I think, on county finances. And so when you look at what counties are asking for in the 2025
to 27 budget, what they're asking for is not additional shared revenue of the sort that they
got into Act 12. But the sorts of special revenue programs or aid programs that help them to support
the services that they provide on behalf of the state. What are some examples of those services
that they provide on behalf of the state that are different? So there's all sorts of mental
health services that counties are the sort of main provider of. If you think about the state
court system, that really operates through counties, jails as well, our county functions,
but mandated in a way by the state. And there's really a host of additional kind of mandatory
programs that counties administer. All right, Professor Philip Rocco,
thanks very much. We'll be looking at that next state budget to see what it holds. Thank you.
Thank you. For more on this and other issues facing Wisconsin, visit our website at pbswisconsin.org
and then click on the news tab. On Wednesday, join us live at 7 p.m. on PBS Wisconsin and
Wisconsin Public Radio for Governor Tony Evers, state of the state address at the Capitol along
with the Republican response. That's our program for tonight. I'm Frederica Freiberg. Have a good weekend.