Milwaukee sales tax spending; debate grows over pension, pay raises

A new fight is erupting over how Milwaukee is spending its new sales tax money.

MILWAUKEE - A new fight is erupting over how Milwaukee is spending its new sales tax money, as the city now faces a $100 million dollar budget gap.

Milwaukee’s decades-long push for more funding came true in 2023, when state law changed to allow the city to approve Wisconsin’s first-ever city sales tax of 2%. Now, a Republican lawmaker says he’s worried about where he thinks the money is going.

What they're saying:

State Sen. Van Wanggaard (R-Racine) says Milwaukee spent more than 90% of the new Act 12 money on raises and easing the city’s growing pension problem.

Milwaukee City Hall

"That was one of the driving factors in dealing with the shared revenue, by providing additional resources to Milwaukee to get out of their pension problems, and that was tied with Act 12, so we could make them solvent, so they didn’t go to bankruptcy," Wanggaard told Dan O'Donnell on NewsTalk 1130 WISN. "As we looked closer and closer, there were just more and more issues with: what are they doing?"

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Mayor Cavalier Johnson pushed back.

"To say there’s a problem with the way we’re allocating money, like that’s just disingenuous," he said. "That’s just wrong, and obviously he just didn’t read the bill."

Wisconsin Act 12 requires that nearly all of Milwaukee’s sales tax money go toward the pension. Any extra funds can be used to hire more police officers and firefighters.

Milwaukee City Hall

"I don’t think that the senator actually read the bill because there’s a number specified. It’s: we have to get to 1,725 police officers," Johnson said. "What that means is we have to grow the number of police officers. The bill was not to increase the pay necessarily of police officers who are presently on the force."

Dig deeper:

Wanggaard said in the last two years, Milwaukee increased non-police funding an average of 35%, while the police budget rose 11%.

"When you see these numbers and when you see what they did with those resources, my goodness," Wanggaard said in his radio interview. "When you look at this, it just does not make any sense."

Protesters at Milwaukee City Hall

Johnson pointed to pay history to defend recent raises.

"Let’s look at the history. So, if you go back to 2008, that’s the last time elected officials in the city of Milwaukee had a pay bump. 2008," the mayor said. "If you look at 2008 onward until today, general city employees have had a roughly 10% increase in pay, a little less than 10%. The elected officials, as discussed, have had a 15% increase in pay. The Milwaukee Police Association, those officers, have had a roughly 30% increase in pay."

The Milaukee Common Council and Mayor Johnson in 2024, after the sales tax went into effect, approved their first raises since 2008. According to state law, the raises couldn't go into effect until their new terms started in April 2024. It also applied to other elected leaders in the city.

Under the changes, the mayor’s salary increased from $147,000 to $169,000.

"They are going to create the same problem that they tried to dig themselves out of," Wanggaard said in the interview.

What we know:

This week, the city is in arbitration with the police union over stalled contract negotiations. The last contract expired in 2022.

Milwaukee Police Department (MPD)

The Milwaukee Police Association is seeking a 12.75% pay raise over the three-year contract from 2023 to 2025, along with back pay. The city has offered 9%.

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Arbitration will decide.

The Source: The information in this post was collected and produced by FOX6 News.

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