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On January 1, 2024, a new sales tax increase went into effect in the City of Milwaukee and Milwaukee County. Like most anything these days, it has a lot of people riled up.

HOW MUCH IS IT?

The City of Milwaukee sales tax increase is a brand new 2% sales tax. The County sales tax increase is a 0.4% increase to the existing 0.5% County sales tax—bringing the total to 0.9%.

So, when you factor in the preexisting statewide 5% sales tax, the sales tax in the City of Milwaukee is now 7.9% (up from 5.5%). Outside of the City—but still in the County—the sales tax is 5.9% (up from 5.5%).

HOW MUCH MORE WILL I BE PAYING FOR STUFF?

Well, a little bit more for cheap stuff, and a little bit more than that for expensive stuff.

For example, if you bought a $40 item in the City of Milwaukee last year, it would have cost you $42.20 with tax. Now, a $40 item will cost you $43.16 with tax. Similarly, a $2,000 item would have cost you $2,110 last year with tax, but will now cost you $2,158 with tax.

THAT’S OUTRAGEOUS! I’M SHOPPING OUTSIDE THE CITY FROM NOW ON!

Okay. And hell, don’t stop there. According to Washington County Executive Josh Schoemann, saving $60 on a $2,500 bedroom set from Ashley Furniture is more than enough reason to leave Milwaukee and move to, we dunno, West Bend?

HOW DOES MILWAUKEE’S SALES TAX COMPARE WITH OTHER CITIES?

According to Wisconsin Public Radio, “even with the increase, Milwaukee’s sales tax is still not as high as other larger cities across the Midwest, including in Chicago, which has a 10.25 percent sales tax, or Minneapolis, where the sales tax is at 9.03 percent.”

WHO ARE THE AD WIZARDS WHO CAME UP WITH THIS ONE?

Milwaukee’s sales tax increase is the result of a bipartisan shared revenue overhaul. It was approved by the state Legislature, signed by Governor Evers, and approved by both the Milwaukee Common Council and the Milwaukee County Board of Supervisors last year.

WHY, GOD, WHY?

Because Milwaukee needs more money. Why does it need more money? Because even though Milwaukee sends more and more tax revenue to the state each year, the amount it gets back—via the state’s “shared revenue” program—has long remained stagnant, or even decreased. This “effectively [delivers] a nine-figure cut to city government, year after year,” explains Recombobulatian Area journalist (and Milwaukee Record contributor) Dan Shafer.

Here’s Dan in a July 2023 piece, “Milwaukee’s new 2% sales tax is how the city lives to fight another day”:

The City of Milwaukee has been in a bind. A looming fiscal cliff has threatened the future of public services in the city in a very real way, and while that cliff was pushed back a budget cycle or two by federal funding through the American Rescue Plan Act, the lack of revenue options to meet rising costs has created an financial imbalance that’s been setting off alarm bells in city government, where potential outcomes range from devastating cuts (at best) to full-on bankruptcy (at worst). It’s a very difficult situation.

The state legislature, controlled by Republicans for more than 12 years, has kept the level of shared revenue returning to the city stagnant—effectively delivering a nine-figure cut to city government, year after year—and now, the city’s annual pension contributions are set to rise significantly, making that difficult budget situation even more challenging balancing act. Robin Vos and Republican leadership in the state legislature have also blocked efforts in budget cycle after budget cycle to give Milwaukee an option to raise its sales tax. This bind the city is in is largely one that was created by the state.

But the city exists downstream from the state, so despite the issue of shared revenue coming into focus at the Capitol in Madison this spring, the city had to prepare for another round of state inaction or gridlock, given the uncertainty ahead. A recent exercise by the Milwaukee Common Council examined what it would mean to see a 25% cut to the city’s budget—a frighteningly realistic outcome in a scenario with no new revenue. Among the possibilities included the elimination of nearly 900 city jobs, closing 10 of 13 library branches, closing Milwaukee Police District 6 and shutting down the new Traffic Safety Unit, and closing more than half of all fire stations.

That would just be the start of it. Without a new revenue solution, the city would be staring at across-the-board cuts. This would impact every aspect of public services in Milwaukee. Things like trash pickup or snow removal or street repair would all get demonstrably and immediately worse.

WHAT, EXACTLY, WILL THE NEW SALES TAX REVENUE BE SPENT ON?

“Most revenue from a City of Milwaukee sales tax must be spent on city employee pensions and most of the remainder on police and fire positions,” says Wisconsin Watch.

OKAY, SO HOW MUCH IS THE INCREASE EXPECTED TO GENERATE FOR MILWAUKEE IN 2024?

Roughly $184 million.

AND HAS THAT $184 MILLION ALREADY BEEN APPLIED TO THE 2024 CITY BUDGET?

Yes. And it’s had an immediate, positive effect. For the first time in more than a decade, the city budget included no significant cuts. Here’s Dan again, in a November 2023 piece, “Back from the brink? Milwaukee just had its best budget season in decades”:

To wit, every fall, for the past 15 or so years, the Wisconsin Policy Forum, a statewide, nonpartisan, independent policy research organization, has produced a “Budget Brief” analyzing the proposed budget from the mayor or county executive. It has always been pretty bleak. The city’s share of state shared revenue was flat as costs and expenses rose, essentially amounting in significant budget cuts. County services were slashed as deferred maintenance backlogs grew. It was always about how to plug this hole, how to soften this blow, how to manage within the extremely rigid confines the state imposed on the city.

But this year? Not so much.

“I and the Forum are not really much into hyperbole,” said Rob Henken, the organization’s president, in an interview with us. “But, you know, ‘mindblowing’ is a word that comes to mind here. Just such a complete about face.”

He continued: “I did not think I would live to see the day when we would produce a City of Milwaukee budget brief and a Milwaukee County budget brief that was not essentially just describing the nature and the breadth and the depth of these far reaching financial problems, and the devastating service cuts that were on the horizon. And instead this year, in our reports on both the City and the County, the whole discussion is about how strategically, these two governments are investing their new resources in ways that both will make up for years of underinvestment.”

OKAY, FINE. I GUESS WE’LL JUST HAVE TO LIVE WITH IT. OUT OF CURIOSITY, DID MILWAUKEE MAYOR CAVALIER JOHNSON HAVE ANYTHING TO SAY ABOUT THAT TWEET FROM THE WASHINGTON COUNTY GUY?

Yes.

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Co-Founder and Editor

Matt Wild weighs between 140 and 145 pounds. He lives on Milwaukee's east side.