1. 2017 Urban Policy Forum Revenue Sources for Wisconsin Municipalities
Curt Witynski
Assistant Director
League of Wisconsin Municipalities

2. Current Revenue Options for Wisconsin Municipalities
Wisconsin Municipalities have a narrow revenue base compared to local governments in other states.

3. Revenue Options Wisconsin Municipalities Don’t have
Local Income Tax
Local Sales Tax (except for premier resort areas)
Local Gas Tax
Local Telecommunication Taxes

4. Revenue Options Available to Wisconsin Municipalities
Wisconsin municipalities pay for public services and capital assets through a combination of property taxes, fees for services (i.e., utility charges), state aids, and borrowing.

5. Abbreviated List of Municipal Revenue Sources
Property taxes
Utility charges
Fees for public services GREEN – Limited by State Law
State aids and grants Yellow – Threatened by State
Water Utility PILOT
Special assessments
Impact fees
Interest income
Room tax
Borrowing
Payment in lieu of taxes (PILOT) from tax exempts
Local vehicle registration fee (wheel tax)
Forfeitures

7. Source: Informational Paper 16, Municipal and County Finance, Wisconsin Legislative Fiscal Bureau, January 2017.

8. Property Tax
Property tax largest source of revenue for cities and villages. Of the $4.8 billion in city-village revenue in 2014, 57% came from property taxes, averaging 29% of total for cities and 38% of total for villages.
Levy limits in place since Limits became severely restrictive in 2011, allowing levies to increase annually by net new construction only. Statewide net new construction number in 2015 was 1.43%, the highest it’s been since 2011.

9. Property Tax
Since levy limits went into effect in 2006, only 35 cities, villages, counties and towns have passed referendums allowing the community to exceed its allowable levy. (21 towns, 13 cities and villages, and 1 county.)
Residential sector pays 68% of levy.
Uniformity clause disallows differential treatment between classes.

10. Property Tax
Wisconsin’s property tax burden currently stands at 3.6% of personal income, the lowest since It was 4.2% of income in Source: Wisconsin Taxpayers Alliance

11. State Aids as a Municipal Source of Revenue
Wisconsin provides more dollars to municipalities through programs like shared revenue, general transportation aids, ERP, PMS, recycling grants, than most other states do for their local governments.

12. State Aids as a Municipal Source of Revenue
Shared revenue funding cut three times in the last 14 years. Funding level today is $197 million less than it was in A 21% reduction.
Shared revenue distribution formula shut off since
ERP Funding stagnant for 15 years.
PMS funding less today than six years ago. Payments cover less than 38% of costs.

13. State Aids as a Municipal Source of Revenue
General Transportation Aids funding for cities and villages was cut by $20 million in None of that cut has been restored.
Urban Transit Operating Assistance was cut by 10% in Some of that cut was restored in the next budget.
Recycling grant program cut in half in 2012.

14. Local Option Taxes Used by Municipalities
Room tax
282 local governments impose
70% of revenue must be used for tourism promotion and development
Prior to 1994 no limits on tax rate or use of revenue

15. Local Option Taxes Used by Municipalities
Local Vehicle Registration Fee (Wheel Tax)
21 local governments currently impose
18 adopted within last two years
Fees range from $10 - $30
Legislation pending to require referendum

16. Local Option Taxes Used by Municipalities
Premier Resort Area Sales Tax
Only available if 40% of equalized value of taxable property is used by tourism related retailers.
Lake Delton, Wisconsin Dells, Eagle River, Stockholm, Bayfield (Sister Bay and Ephraim allowed, but haven’t enacted)

17. User Fees and Special Charges
Municipalities have broad authority to levy special charges for current services, but service must actually be provided and fees may not exceed cost of service or administration of program.
In 2013 Legislature added service fees to levy limits for 5 services – snow plowing, stormwater, garbage collection, fire protection, and street sweeping.

18. Less Common Fees
Snow Plow Fee –Eau Claire and other communities have considered in the past
Street Light Fees – Rice Lake has a street light fee. River Falls has considered in the past.
Urban Forestry Fee – Madison

19. Less Common Utilities
Stormwater Utilities – over 85 communities have created
Transportation Utilities – At least one community has used – Village of Weston

20. Trends: Revenues Increase Little
With state aids flat or falling and strict levy limits in place, municipal revenues rose only a total of 2.1% during Meanwhile, state general fund revenues increased four times faster (8.0%) during same time period.