MADISON (WKOW) -- Gov. Tony Evers announced Friday his 2021-2023 budget proposal will include giving counties the ability to pursue an additional 0.5 percent sales tax.
Under state law, counties can already have a 0.5 percent sales tax, as long as its passed and approved by a referendum by people living in that county.
The plan would also allow municipalities with populations in excess of 30,000 to impose a 0.5 percent sales tax if approved by voters through a referendum.
To date, 68 out of 72 counties have enacted the 0.5 percent county sales tax. A small handful of cities, including Wisconsin Dells and Lake Delton, have the ability to impose a resort area sales tax.
According to a press release from the governor's office, Wisconsin has the second-lowest population-weighted combined state and local sales tax rate and has the lowest sales tax among its Midwestern neighbors, with Indiana at 7 percent, Minnesota at 6.875 percent, Illinois at 6.25 percent, and Iowa and Michigan at 6 percent.
Jerry Deschane, Director of the League of Wisconsin Municipalities, said the idea has bipartisan support and called on lawmakers to approve that part of the budget because, ultimately, voters would decide whether they'd end up paying the tax.
"What is our pitch? Our pitch is let voters decide," Deschane said. "Let voters decide if they want a higher property tax or if they want to balance it out with a sales tax. Right now, that option's not even on the table."
The state's largest business lobby, Wisconsin Manufacturers & Commerce, said in a statement Friday they opposed the measure. The group cited the state's above-average rankings for both property taxes and personal income tax as a reason for lawmakers to reject the sales tax proposal.
“Hard-working Wisconsin families and small businesses have had to make tough decisions about their own budgets this past year,” said WMC's VP of Governement Relations, Scott Manley. “Instead of having similar discussions about how to make government more efficient, this plan just takes more money from taxpayers at a time when they can least afford it.”
Janesville City Manager Mark Freitag said in an email the city had been pushing for lawmakers to allow the city to put the 0.5% sales tax up for a referendum.
Freitag shared an estimate calculated by the city that estimated a municipal sales tax there would have generated an additional $9.6 million last year.
Ariana Vruwink, a spokeswoman for Dane County Executive Joe Parisi, said the county did not exepct Republican lawmakers would keep the proposal in the upcoming budget.
Vruwink added that even if enough GOP lawmakers backed the measure, Parisi had no interest in raising the county's sales tax, which currently funds the sheriff and highway departments.
Deschane said it was misleading to use property tax rates as a reason to oppose municipal sales taxes because Wisconsin communities wouldn't be so dependent on property tax revenue if they were allowed to generate income elsewhere.
"Franky, we rely on property taxes to do too much," Deschane said. "In a lot of cases, we would all be better off if a part of that load was carried by a small sales tax."
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