Milwaukee’s City Council has approved a sales tax hike of two cents per dollar next year as part of a bipartisan plan to avoid bankruptcy, the Wisconsin State Journal reports. The 12–3 vote on Tuesday was more than the two-thirds majority needed.
City leaders in favor of the higher sales tax cited looming deep cuts to core services such as police and fire protection. The tax hike’s opponents objected to strings attached to additional state funding, such as curbed spending on diversity, equity, and inclusion efforts.
Milwaukee has become increasingly reliant on federal pandemic aid to fund its essential services — which cost $150 million more per year to maintain — and is struggling with an underfunded pension system.
The bill recently signed by Democratic Gov. Tony Evers and passed by the GOP-controlled Legislature boosts state aid to local governments by $275 million and ties future aid payments to the state sales tax.
The state sales tax is 5%. If Milwaukee County approves the higher sales tax rate, sales taxes in the city of Milwaukee would be 7.9% — and bring in nearly $200 million more in revenue next year.
