The system of “Shared Revenue” in this state has been around for a long time. It was started in 1911, when a Ford Model T Town Car cost $1,200 with bells and whistles like three oil lamps, a horn and tools for repairs. Back then, shared revenue was a way of returning back a portion of state income tax to local governments to offset property tax exemptions. Each village, town or city received money from the state based on how much residents of each location paid into the state.
Initially, folks weren’t crazy about the new system but they averaged a return of about 90% of every dollar they sent to the state. The more your municipality paid into the system the more of a share you got back. But then they flipped the script. In the mid 1970’s, the formula was adjusted to reflect the need of an area and not their revenue contribution. It was difficult layer of provisions that made the formula to compute shared revenue complex. Although, it was still workable for communities, the devil really did prove to be in the details.
Over the years the formula kept changing to the point legislators seemed to be making up their own rules. Eventually there were cuts in shared revenue that were nearly 4% during 2008 and the couple of years that followed. By the time we get to then Governor Scott Walker, shared revenue was feeling more like our pockets were being picked. Nine percent reductions were included in Walker’s first budget.
Today, Milwaukee County and City officials report receiving less than 50% on every dollar they send to the state. It is crippling budgets and hamstringing critical services. To further add injury to insult, the state also places unfunded mandates on our local governments. These mandates required local governments to provide services but came with no additional funding. During the three legislative sessions between 2011 – 2016, the Republican controlled legislature enacted 128 provisions that were unfunded mandates or re7strictions on the decision-making power of local governments. Some of the restrictions they put in place included limits on a local government’s ability to raise revenue from property taxes. They imposed levy caps and then left us holding an empty bag. This form of government comes at a cost.
When people tighten their belts, or in this case their budgets, they are looking for discretionary programs and services to cut. Like when schools make the decision to forgo band, art or sports programs in their budgets to save money. We do the same thing but instead it’s roads, public transportation, or treatment programs that get neglected or cut all together.
This past budget, Republicans on the Joint Committee on Finance voted to cut a total of $14 million in shared revenue to Milwaukee County in 2020 and 2021. So as local governments work to respond to the continued loss in funding, this is feeling more like a money grab. It used to be a shared commitment to make sure each of our communities had what they needed to operate.
Now it just feels like they’re picking our pockets. In the meantime, a 2019 Ford/Lincoln Town Car, with bells and whistles is around $50,000. Yet it feels like we aren’t doing as well as we were in 1911.