Milwaukee sales tax; $200M brought in for city
Milwaukee sales tax brings in $200M for city
A new sales tax in Milwaukee brought in just over $200 million for the city in 2024, more than projected.
MILWAUKEE - A new Milwaukee sales tax brought in just over $200 million for the city in 2024, in its first year in effect.
That amount is larger than what was projected.
Sales tax increase
What we know:
As of January 2024, the sales tax in the city is 7.9%. City comptroller Bill Christianson's data shows the city received its highest sales tax distribution last August.
"We had estimated originally $184 million. It’s now our third largest source of revenue," Christianson said. "I think a lot of events this summer, including the RNC, definitely had a positive impact on sales tax receipts."
Milwaukee leaders say the new tax is helping the city avoid devastating cuts due to pension obligations.
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"I think that’s one of the benefits of the city sales tax is that it's not just city residents that bare burden of that, it's spread amongst those who get our amenities and services," Christianson said.
Act 12
Dig deeper:
Despite the increase, state law has strict stipulations for how it can be dispersed.
According to the Act 12 law, the city has to use most of the money – 90%-- to support its pension program, and what's left will go towards beefing up public safety, like police and fire services.
A city spokesperson said more than 75% of the cost of pensions is related to public safety employees.
Local business response
What they're saying:
It is leaving some residents feeling left out on more than expected.
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Lilo Allen is co-founder of the Bronzeville Collective MKE. She said her costs have gone up, so she's had to bump prices.
"I don’t think inherently there is any benefit to small business owners. And I mean a good portion of that money is going to pay pensions," she said. "It seems tiny, right, a few cents, but it could make or break somebody’s pocket, so folks are being very fiscally conservative."
As an incentive, she's selling these tote bags to circumvent the issue.
"We created a Bronzeville Collective tote bags, and so the bag itself is 12, but anytime you come into the space and shop with us, you get a percentage off that is equal to the amount sales tax increase, so it's like 5 to 10%."
The Source: The comptroller and a small business owner in Bronzeville, as well as prior coverage, contributed to this report.