Even with the passage of legislation increasing shared revenue in 2023, more work is needed for municipalities around the state to find ways to keep pace with increasing costs of public services.
The good news, though, is that efforts to build awareness of and support for Act 12, the revenue sharing bill signed into law two years ago, proved that consensus can be built in a hyper-partisan political environment.
That was one of the messages that came out of a panel discussion featuring Milwaukee Mayor Cavalier Johnson, Milwaukee County Executive David Crowley, and Wisconsin League of Municipalities Executive Director Jerry Deschane on June 4 at the Milwaukee Youth Arts Center. The event highlighting local government funding was hosted by Mueller Communications.
“No single city, county or metro area has enough votes in the legislature to get this sort of work done,” said Deschane, noting that both Crowley and Johnson worked with others in the business and civic communities to build support for Act 12 among legislators representing areas far removed from the metro-Milwaukee area.
“They avoided the temptation to say we’re from Milwaukee and we’re different or we’re better. They worked together for everyone’s benefit and got it done,” Deschane added.
Even with the success of Act 12, Milwaukee and Milwaukee County in addition to municipalities statewide still face funding challenges because of inflation and a state law that limits property tax levy to net new construction (which is often well below the rate of inflation).
As it stands, the primary funding sources for municipalities in Wisconsin are property taxes and shared revenue. All three panelists agreed that there needs to be a greater diversification of funding options.
Both Crowley and Johnson pointed to collaborative efforts that both the county and city have implemented in recent years to address funding challenges.
Crowley pointed to consolidating areas of county government where possible in addition to reducing the number of buildings the county owns. He also referenced public/private partnerships as opportunities to save on costs, identifying the county’s cost-sharing agreement with four regional health systems to operate the Mental Health Emergency Center.
Johnson said the city has hired a Director of Innovation (James Bohl) to identify opportunities to reduce costs to save resources while delivering needed services.
“But we really need to focus on diversification,” Johnson said of funding sources beyond property taxes and state revenue.
One alternative could be legalizing the sale of marijuana and related products, Johnson said. He noted that every state surrounding Wisconsin has legalized the sale of marijuana and related products, which has resulted in significant tax revenue.
For example, in 2024 Illinois generated more than $490 million in tax revenue as a result of cannabis sales, according to the state’s Department of Financial and Professional Regulation.
“We’re totally missing the mark on that,” Johnson said, noting that many Wisconsin residents live close enough to state borders to take advantage of relaxed laws on marijuana sales elsewhere. “It’s not like the people of Wisconsin are not spending money on the product, they are. We are just not receiving the benefit of that.”
When it comes to sharing services, Deschane pointed out that schools in the state have service-sharing networks that facilitate communication and cooperation. Known as Cooperative Educational Service Agencies (CESA), Deschane said the League of Municipalities is looking at how a similar model could be implemented for municipalities in the state.
As the Legislature works on the next biennial budget, both Crowley and Johnson said it is imperative that people contact their elected representatives in both the Assembly and the Senate to highlight challenges that municipalities continue to face amid shared revenue formulas and property tax limitations.
Shared revenue originally represented 90% of municipal budgets, now it makes up only 14% of municipal budgets, Deschane said. The rest of the funding comes primarily from property taxes, which is why many communities have turned to public referendums seeking voter approval to exceed tax levies in order to fund basic services such as emergency response services.
Crowley noted that Milwaukee County is mandated by the state to provide a number of services, including public safety (Sheriff’s Department, District Attorney), courts and health and human services. A number of those costs, though, are unique to Milwaukee County.
The county spends $17 million annually on highway patrol services, the only county to do so, a cost expected to balloon to $20 million in 2029, Crowley said. The county only gets $1 million in reimbursement, he added.
In total, the county is spending $212 million annually on public safety services. Those costs increased 64% over the past five years, Crowley said. Projected increases for 2026 are expected to be $170 million, which means the county will be spending more than $380 million on mandated public services.
Another cost facing the county is the need for a new Public Safety Building for which state funding is being sought. Crowley said if shared revenue more equitably covered the county’s mandated services, it could build a new Public Safety Building without any allocated state funding.
Building awareness of public funding challenges and support to find solutions will be imperative in the coming years, all three panelists said. Act 12 was a first step, but more work needs to be done.
“We’re on the right track,” Deschane said. “Victories also help get more victories.”
