Does Wisconsin need a new approach for funding local government?
A new study by the Wisconsin Policy Forum details that local governments in our state are overly reliant on the property tax for providing police, fire, streets and other government services to our residents and visitors.
The report, “Dollars and Sense,” points out that of all Midwestern states, Wisconsin more than any other depends on the property tax to fund these services.
This needs to change.
Our dependence on property taxes causes them to be higher, because there are no other options in meeting the needs for service. High property taxes are a threat to homeowners, especially seniors and those who live on a fixed income. The dependence on property taxes also means that as a share, our residents pay more, while visitors and commuters pay less.
In Wisconsin, local governments are limited in how we pay for services. These options are primarily the property tax and state shared revenue. Limits on property taxes and stagnant shared revenues are preventing our local governments from effectively providing services, as costs and demands continue to increase.
This is a problem that gets bigger each year. It doesn’t have to be this way.
Local spending is not the problem. According to the U.S. Census, municipal spending in Wisconsin is two-thirds of the national average, with $2,205 per capita of spending in Wisconsin versus the national average of $3,443.
In La Crosse, we continue to do our part on spending. In 2012, spending on general government was more than $100 per person. In 2016, this number was reduced to less than $80. We have managed significant decreases in our debt service and property tax rate, too.
The $12.04 rate is the lowest it has been since 2007.
Other states allow local governments to use sales, income and other local option taxes and fees to fund the services they provide. Providing more options in paying for local government better matches the users of services with those who pay for them and helps to lower the tax burden on property owners.
The League of Wisconsin Municipalities — of which La Crosse is a proud member — would like to start a conversation about balanced, fiscally disciplined and sustainable local government services.
Cities like La Crosse need broader, more stable funding. We also need flexibility in funding our services and options that are more responsive to the economy and share the cost among residents, visitors and commuters.
Let’s begin a dialogue here in Wisconsin about more balanced funding for local government.