Support for cities & villages shouldn’t be “Red” or “Blue”

Mayors representing two politically-different communities recently spoke with one voice regarding the need for the state to re-commit to the success of local governments. Brookfield Mayor Steve Ponto and Madison Mayor Satya Rhodes-Conway distributed a joint Op Ed to the media throughout Wisconsin, calling for a reversal of decades of reduced state support for city and village government, and a recognition that cities and villages are critical to the state’s success. It’s a good read; take a look.

The State Needs to Re-Commit to Cities

By Brookfield Mayor Steven Ponto & Madison Mayor Satya Rhodes-Conway

The cities of Brookfield and Madison are different in many ways.  In one the majority votes red, the other blue. One is a suburban enclave, mostly white and upper middle-class. The other is the state’s second largest city and has a more diverse mix of people and incomes.

As the mayors of these two communities, we may disagree on many issues, but we both firmly agree on this: The Wisconsin Legislature needs to re-commit to helping cities flourish. Thriving municipalities are crucial to Wisconsin’s long-term economic success. To compete nationally and globally Wisconsin needs high quality communities that can attract and retain talent and enterprise and spur job creation. 

The state should increase its investment in cities because if cities are not doing well, neither is the state. We suggest three policy changes for accomplishing this: reversing cuts in state aid to cities, easing property tax levy limits, and allowing municipalities to create new revenue streams, such as a local sales tax, provided voters approve in a referendum.

Wisconsin’s cities and villages are home to:

  • 72% of the state’s population
  • 90% of the state’s commercial value
  • 87% of the state’s manufacturing value 

Most of the small businesses created in Wisconsin get their start in cities and villages.

Yet, the state government continues to disinvest in cities. In the last two decades, under both political parties, the state’s financial commitment to cities has been on a steady downward trend. At the same time, the state tightly restricts the ability of municipalities to raise their own revenues to fund the services people and businesses expect.

The largest state aid program for municipalities, called shared revenue, has been cut incrementally by $94 million since 2003, a 12.3% reduction. In 2003, Madison received $9.2 million and Brookfield just over $1 million in shared revenue from the state.  In 2021, Madison will receive $6.1 million and Brookfield just over $570,000. Meanwhile, the cost of providing services has, like everything else, increased substantially since 2003. 

Unless these policies are changed, municipalities in Wisconsin will be unable to provide the same level and quality of local services that they have. Lower quality services will eventually lead people and businesses to locate in other states with more prosperous and attractive cities.  

We call on the Legislature to use the state’s 2021-2023 budget to renew its partnership with municipalities by increasing its financial commitment to communities. We also urge the Legislature to ease the nation’s strictest property tax limits. Let municipal elected leaders have more control over local budgets and finances by providing flexibility on levy limits – perhaps by allowing communities experiencing little growth to increase their levy by at least the rate of inflation.

The Legislature should also expand local revenue options for municipalities to consider. The state can best help cities prosper, protect residents, and relieve over dependency on property taxes by giving communities other revenue options to pay for critical services like police, fire, streets, libraries, and parks. One obvious choice is to give communities the option of going to the voters with a referendum seeking permission to impose a local sales tax. While some communities like Brookfield would likely not pursue this option, other communities would.   

We may not agree on much, but we both love our communities and we both know we need the state to begin partnering with its local governments. This can best be done by reinvesting in communities, easing the strict limits on property tax collections, and providing more local revenue options. A great state needs successful cities. The state Legislature must do more to help municipalities succeed. 



ARPA is NOT the same as Shared Revenue

If you’re a local leader, you are undoubtedly hearing all of these “voices” in your head:

“Don’t spend ARPA dollars on ongoing expenses. It’s not a replacement for property taxes, shared revenues or transportation aids. Think “one-time” money. Take your time. Gather ideas from a range of sources. Pay particular attention to the quieter parts of your community, those areas or residents who may have critical needs, but are unlikely to show up at the municipal podium. Keep good records.”

Cities, villages, towns, counties and the state itself are wrestling with how they can–and how they should–spend the unbudgeted $5.711 billion coming their way as a result of the American Rescue Plan Act (ARPA). The U.S. Treasury Department is scheduled to announce the rules for the program soon, and the dollars will begin arriving shortly thereafter. You have until the end of 2024 to spend your allocation. Perhaps the best thing to do with 2021 is to spend it doing careful planning.

While you’re planning for this short term shot of resources, take the time to speak up for your long-term needs. The state Legislature is putting together the state’s two-year budget, including deciding whether to increase long-neglected shared revenues. This billion-dollar budget item is a significant part of the state budget, but over the last 30 years it has lost ground, a lot of ground, to inflation, education, prisons and Medicaid. Since the 1970s, those four have taken ever-larger shares of the state general fund while police, fire, ems and other local services have received less. Make this the year that local services get their due.

The League is calling on its members to talk to lawmakers about shared revenue. Make a phone call, pass a resolution, give lawmakers a tour of your favorite local potholes. Spread the word: local government matters; it’s time for an increase in shared revenue.

Legislators have a job very similar to your own. They have more needs than resources, so they do their best to make the dollars go as far as they can. Your job is to help them understand where police, EMS and snow plow drivers fit into that priority scheme.

So, when it comes to finances, you have to have your eyes on the present and on the future. How you will allocate the valuable, one-time ARPA resources matters a lot right now. How the Legislature will treat shared revenues matters a lot next year and every year thereafter.  And your job is to balance both.