How It Works: Shared revenue’s dwindling figures strain municipality budgets

ONALASKA (WKBT)- News 8 Now has previously reported that Wisconsin municipalities have a few ways to pay for services, including the property tax levy.

But the state limits how much a town can actually raise those levies.

There are federal and state grants to apply for, but the other main resource for town funds is the state program of shared revenue.

News 8 Now’s Ken Kosirowski explores how it works, and why a decades-long trend is handcuffing town budgets.

Shared revenue has been a Wisconsin state program since 1911.

You pay for it in the work you do–and things you buy.

“The state collects income and sales taxes, and that’s where they get the proceeds that then eventually go back to shared revenue,” said UW Extension educator Karl Green.

It now ranks in the top 10 of the biggest state programs.

But most candidates will tell you–

“We should have an increase in shared revenue for local municipalities,” said 94th Assembly candidate Ryan Huebsch (R).

“Increasing shared revenue,” said incumbent attorney general Josh Kaul (D).

–it’s in a bad way.

“It’s something that’s frankly been shorted for years and years and years,” said incumbent governor Tony Evers (D).

Governor Tony Evers says in the last 12 years, the largest shared revenue increase in the state budget has been 0.03 percent.

“Pretty stagnant.”

Sabrina Steger is the finance director for the city of Onalaska. She confirms the city got just under $600,000 in the last fiscal year. That’s half of what the city got 20 years ago.

And other places are in the same boat: the money the state has sent back has dropped 47 percent between 1996 and 2020.

“How do you in a time of shrinking resources cover all the services, because the service list isn’t going down,” said Green.

“And those aren’t things necessarily that are wants. Those are needs.”

Now, baked into the shared revenue program is an expenditure restraint–municipalities get more shared revenue if they keep their annual budget increase below about three percent. The city of Onalaska has stayed under that mark almost every year, but the reward has been reduced to nearly nothing. $136,000 just five years ago. Next year–

“We’re going to receive $7,000,” said Steger.

City Mayor Kim Smith says the city doesn’t see a lot of yearly growth to raise its property tax level. And if shared revenue payments get smaller,

“That means we’re basically looking for alternative ways we can make changes to how we do business, in order to just support what we have,” said Smith.

Putting city officials between a rock and a hard place.

Said Steger, “Definitely something we’re going to be worried about for a long time if there isn’t any changes from the state.”