July 25, 2017
Over the last year, MKE United has engaged in wide-ranging civic engagement efforts designed to create a shared and inclusive vision for Downtown Milwaukee and its adjacent neighborhoods. That process identified the City’s revenue framework as one of the key challenges limiting the City’s progress. As a result, the Greater Milwaukee Committee commissioned the Public Policy Forum to develop a report assessing the funding structures of peer cities around the country to inform a community discussion around various approaches.
The resulting report –“On the Money? The City of Milwaukee’s Uncommon Revenue Structure and How it Compares to Peer Cities” – demonstrates the need to consider a revised revenue structure that will reduce the burden on local property taxpayers and enable us to make the investments in our neighborhoods that will attract and retain inclusive and diverse businesses and jobs that benefit all Milwaukeeans.
City Funding Model Outdated
Milwaukee stands alone among its peers in its unusual funding approach:
- Historically, state aid has been the City’s largest revenue source placing a significant burden on the State and the City’s budget;
- Wisconsin is the only Midwestern state that property tax is the primary form of local municipal taxation;
- Every other peer city has multiple local sources of revenue, with the vast majority including a combination of general and selective sales taxes; and
- Other cities utilize funding mechanisms that reduce the local tax burden on property owners and secure revenue from the thousands of commuters and visitors that use City infrastructure and services every day.
Without significant change, Milwaukee will find it extraordinarily difficult to maintain existing services and impossible to invest in new, innovative approaches to expand economic development throughout the City.
Investing in Our City’s Future
MKE United is developing an ambitious vision for the future of our City that we are extremely excited about. But, we will not be able to make that vision a reality if we can’t develop a more effective and fair revenue structure for the City. This detailed report provides various approaches and roadmaps for all stakeholders – the City, State and broader community – to work together to develop a new and better solution.
We should take note of successful peer cities. As the report demonstrates, a more balanced approach to local taxation would lessen the burden on local property owners, provide greater flexibility in funding, generate revenue growth linked to the City’s economic growth, and lessen reliance on state funding.
We hope this report and subsequent media coverage will help kick-start a vibrant discussion regarding how to best fund vital City services. An effective funding structure will be able to not only leverage the City’s economic growth, but fuel that growth going forward, ensuring that prosperity extends throughout our City.
Greater Milwaukee Committee