Even With an Update to the State's Shared Revenue System, Many Municipalities Still Facing Budget Shortfalls

Wednesday, July 10th, 2024 -- 9:01 AM

(Lorin Cox, Wisconsin Public Radio) When the Wisconsin Legislature passed an update to the state’s shared revenue system last year, lawmakers heralded it as a way to reduce a state funding gap between rural and urban communities and a lifeline to help communities make ends meet.

According to Lorin Cox with Wisconsin Public Radio, a year later, local leaders from municipalities across the state say the changes helped but fell short of solving their budgetary challenges.

Some are turning to operational referendums to raise the local property tax levy just to maintain the services they currently provide. If they fail, it could mean scaling back social services, road maintenance and public safety offerings, among other cuts.

The village of Oregon, just south of Madison, is in the process of planning a potential referendum for next spring. Village Administrator Martin Shanks told WPR’s “Wisconsin Today” that the new shared revenue law helped make up for what they lost out on over the previous 20 years under the old system, but that’s not enough to keep up with the rising costs of services.

“The pandemic and then the inflationary environment after that really broke the backs for all these communities,” Shanks said. “We just cannot keep up with the expense of just maintaining what we’re currently doing.”

Oregon’s ability to increase the property tax absent a referendum is limited to the value of new construction in the community each year. Shanks said most of their growth is residential.

More residents means more demand for local services. The village might see a 1 to 3 percent increase on its property tax levy, Shanks said, while facing 5 to 10 percent inflation on its costs.

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