Alternatives to shared revenue provide "golden opportunity" for regional growth

For more information:

Anneliese M. Dickman

Senior Researcher

Public Policy Forum

414-276-8240

For immediate release

Alternatives to shared revenue provide “golden opportunity” for regional growth

MILWAUKEE, Wisconsin – November 19, 2004 – The decline and likely demise of shared revenue between Wisconsin and local governments provide an opportunity for municipalities and counties to strengthen their regions by working together to find new revenue sources, according to a Milwaukee-based Public Policy Forum study released today.

“There is a golden opportunity in the 2005-2007 biennial budget for the state to make forward-looking policy changes that will encourage regional cooperation and strengthen regional economies,” says Anneliese M. Dickman, the Forum’s senior researcher. “The openness of local governments to new, creative solutions means it’s also time for them to redefine regional cooperation.”

“Shared revenue, as municipalities and counties have known it, appears over,” says the report, “State Shared Revenue and the Future of Regional Cooperation.” Before the end of the program causes crises, Wisconsin policymakers should explore alternatives, such as:

Property tax-base sharing, which allows local governments to share their tax bases by pooling revenue attributable to growth in property values, base property values, or both.

Income tax-base sharing, which allows local governments to establish local income taxes and share the revenue.

Sales tax-base sharing, which allows local governments to establish local sales taxes and share the revenue.

Regional service models, which provide services to citizens in a special tax district.

The Forum report looks at property tax-base sharing models in eastern Racine County, Minneapolis-St. Paul, and Charlottesville, Virginia; at an income tax-base sharing model in Philadelphia; at a sales tax-base sharing program in Sacramento; and regional service models in Denver (Scientific and Cultural Facilities District) and southeastern Wisconsin (Southeast Wisconsin Professional Baseball Park District). In addition, a proposal by the Wisconsin Alliance of Cities that would share regionally a portion of the annual growth in state corporate and personal income taxes is examined.

Dickman says that state incentives for developing inter-jurisdictional agreements will spark regional discussions, but she says such discussions shouldn’t be limited to small, service-specific partnerships. “Broad coalitions of both municipal and county governments have a better chance of securing new revenue sources and allowing growth to benefit the entire region,” she says.

Wisconsin’s shared revenue program has undergone changes in the past two budgets. As a result, in 2004 local governments have experienced a $90 million reduction in shared revenue. On average, shared revenue accounts for 19% of a local government’s total revenue.

The full report is available on the Forum’s Web site at www.publicpolicyforum.org.

The Public Policy Forum is facilitating creation of a shared vision action plan for regional cooperation in southeastern Wisconsin based on research and analysis. During the next three years, the Forum will encourage the region to think and act in ways that promote its long-term economic and social health, including . . .

Developing a Southeastern Wisconsin Leadership Network;
Establishing priorities for regional action;
Making the case to citizens that regional cooperation is vital to our future;
Benchmarking progress toward the shared vision.

The Public Policy Forum – which was established in 1913 as a local government watchdog – is a nonpartisan, nonprofit organization dedicated to enhancing the effectiveness of government and the development of southeastern Wisconsin through objective research of regional public policy issues.

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