Milwaukee's 2% sales tax brought $200 million into city coffers in first year
The City of Milwaukee surpassed expectations in the first year of its local sales tax, bringing in more than $200 million in revenue in 2024.
The city had anticipated — and budgeted — revenues from the 2% sales tax at about $184 million. The state had previously put that estimate at $193.6 million.
In all, Milwaukee Comptroller Bill Christianson said the 2024 sales tax revenue was $16.6 million over budget.
The difference between expected and actual revenue can be explained by two factors, he said.
First, the city made a conservative estimate because it didn't have its own historical sales-tax data to draw from. Second, the local economy was strong, driven by major events like the Harley-Davidson Homecoming Festival and the Republican National Convention and the absence of a broader economic slowdown.
The sales tax went into effect Jan. 1, 2024, as part of a local government funding law passed by the state Legislature and signed by Gov. Tony Evers the previous year.
The landmark law, known as Act 12, boosted revenue to local governments, including by allowing Milwaukee to enact a local sales tax and Milwaukee County to boost its existing sales tax.
The law helped the city avoid deep service cuts, but it also came with significantly increased costs for public safety and the city's annual pension payments in addition to a series of non-fiscal policies aimed at the city.
The city may use the sales tax dollars only for specific areas: pension costs; maintaining police, fire protection and emergency medical services at April 1, 2023, levels; and growing police and fire staffing over a decade to levels mandated in the new law.
The city must increase its police and fire personnel until it has at least 1,725 officers, including 175 detectives, and a daily staffing level of at least 218 members in the fire department. It must reach those benchmarks by the end of the 10th year after a sales tax goes into effect.
The city had 1,587 police officers in late 2024.
The increased funding does not mean the city is flush with cash.
Milwaukee Mayor Cavalier Johnson warned ahead of 2025 budget deliberations that departments would face difficult decisions.
Alison Dirr can be reached at adirr@jrn.com.
This article originally appeared on Milwaukee Journal Sentinel: Milwaukee's 2% sales tax brought in $200 million in 2024
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