The massive Act 12 that ushered many new laws into being has also increased shared-revenue funding for Wisconsin’s counties, cities, villages and towns.
The shared-revenue portion of Act 12 – initially crafted by the Republican-controlled legislature and signed by the Democratic governor in June – returns 20% of the state’s sales-tax revenue to local governments, or one penny of the five-cent sales tax charged per dollar spent.
The additional funding was expected to boost aid to every local government by at least 10%, with a “particular funding boost to small towns and rural communities,” according to the Wisconsin Policy Forum. “The vast majority of municipalities and counties will see sizable shared-revenue increases through a formula that favors less populous communities.”
According to the estimates from the Legislative Fiscal Bureau, that is certainly the case for the County of Door and Door County municipalities, where percentage increases are greater across the board, and exceed 1,000% for municipalities such as the Village of Egg Harbor and the County of Door (see the sidebar chart).
Shared revenue is a state-run program that delivers funding to local governments to use however they decide. The two primary revenue forms are the sales tax and income tax, according to the Legislative Fiscal Bureau, and the idea behind the program was the state’s agreement to share a portion of its revenue with municipalities and counties in an annual appropriation decided by legislators.
But legislators haven’t changed that amount since 2013, according to the Wisconsin Department of Revenue (DOR), forcing communities to rely more heavily on property taxes. The county and municipal aid program’s total annual distributions have been set at $753 million since 2012 – down from 2003, when total aid payments were $949.2 million.
Beginning in 2024, total aid payments will be $979,462,170, which breaks down to $172,646,522 for all counties (a 40.8% increase) and $806,815,648 for all municipalities (a 28% increase), according to the Legislative Fiscal Bureau.
The new aid is based on a formula that’s different for counties; for municipalities with fewer than 5,000 people; for municipalities between 5,000 and 30,000 in population; and for municipalities with more than 30,000 in population. All Door County municipalities are below the 5,000-population category, with the exception of the City of Sturgeon Bay (which had 9,654 residents in the 2020 U.S. Census).
The increased aid takes effect in 2024. In 2025-26, and each year thereafter, payments would be equal to the amount received in the prior year, adjusted by the rate of growth in the state sales tax.
Shared revenue is distributed in July and November each year. Estimates of what that annual aid will be, according to the DOR, are sent to counties and municipalities annually by Sept. 15.