New Shared Revenue for Wisconsin Municipalities a Drop in the Pond for Many

Tuesday, October 10th, 2023 -- 10:00 AM

(By Margaret Faust, Wisconsin Public Radio) In the city of Delavan, there are two ambulances. Or, as City Alder Matt Bieser characterizes it, one and a half.

According to Margaret Faust with Wisconsin Public Radio, only one ambulance in the small city in southeastern Wisconsin meets the requirements to transport someone to the hospital.

If another call comes in while that ambulance is driving a person to Milwaukee, for example, Delavan has to call the Emergency Medical Services staff from a neighboring city which is also operating with limited resources.

"So far it's worked, but it's not optimal. And with aging infrastructure and the costs of things going up more and more, it's gonna get worse," Bieser said. A new approach to shared revenue will help municipalities across the state pay for law enforcement, fire protection and emergency medical services.

Officially known as Act 12, the plan was intended to increase state funding for local communities throughout Wisconsin by at least 20 percent, using money generated by the state's sales tax.

Jerry Deschane, executive director of the League of Wisconsin Municipalities, said municipalities big and small had been telling him for years that the outdated model was not working. "(It) was just unsustainable. They were slowly but surely choking to death," Deschane said.

A municipality's general aid from the state is based on a formula created 30 years ago. That formula has not changed. The new model allocates more of what is called supplemental aid. The size of a municipality's increase was based on a formula heavily weighted by population size.

Deschane said it was not the perfect solution because every municipality's needs are different, but he gives credit to the Legislature. "They were doing the very best they could to be as equitable as they could, knowing full well that it was impossible to come up with a formula that would please everyone," Deschane said.

The shared revenue deal has pulled Milwaukee and Milwaukee County back from potentially devastating financial cliffs. But officials in smaller municipalities say the additional funds they are seeing are far from transformational.

Oshkosh received $2 million more in shared revenue than in previous years, about 5 percent of the city's annual budget. Russ Van Gompel, the city's finance director, said most of that money will go to public safety.

He expects it will only cover normal operating costs and he anticipates a small increase in property tax to meet the fiscal needs of the city. Eau Claire's supplemental aid increased by $1.2 million, which is less than 1 percent of the city's annual budget.

Property taxes, fees and fines are the city's main sources of income. Stephaine Hirsh, Eau Claire's city manager, doesn't want to increase taxes for residents who she says are under fiscal stress. She doesn't know what to do.

"There isn't a way for us to continue to grow as a municipality and to provide those services that our residents expect and hope for. It's really a dilemma," Hirsch said. Eau Claire's 2024 proposed budget is putting all of its increased shared revenue towards the police and fire departments.

Hirsch predicts the extra funds will only cover the cost of inflation in those departments, not add new services or expand existing ones.

Feel free to contact us with questions and/or comments.