MILWAUKEE — Now that Governor Tony Evers has signed the shared revenue bill into law, the focus shifts from Madison to Milwaukee.
The Common Council says it will vote in just a few weeks to decide whether to raise the city’s sales tax by 2 percent.
After that, the Milwaukee County Board of Supervisors will have to decide on a .4 percent sales tax increase.
If both the Common Council and the county board approve sales tax hikes, it would go from 5.5 percent to 7.9 percent in Milwaukee. While the massive boost in revenue would be good for the city’s financial situation, an economics expert says it would hit poor families the hardest.
"Because of inflation, because we just got out of a pandemic, people don't have as much money as they used to,” said Milwaukee resident Antonio Oliver.
Oliver says he works two jobs to make ends meet while going to school full-time.
"We need more money in pockets so people can spend it, not taking it out of their pockets,” Oliver said.
He says he can’t afford to pay more for everyday items. So if Oliver had a choice, he would vote against raising the sales tax.
"To use this money to take care of a pension problem, I think that I'm not a fan of that,” he said.
That decision is now in the hands of local elected leaders.
"This is an investment for our future,” said Alderwoman Marina Dimitrijevic.
Alderwoman Marina Dimitrijevic says she’ll vote for the tax increase because she thinks the alternative would be devastating to critical city services.
"I hear about it all the time, garbage collections, street lights, libraries, fire, and police so we're going to have a conversation about what kind of city we want to live in, raise our families in, and who we want to be,” she said.
Let’s go in-depth on how a 7.9 percent sales tax stacks up against other large cities in the Midwest. Chicago is north of 10 percent, Minneapolis is just over 8 percent and the sales tax in Columbus, Ohio is 7.5 percent.
"I think that we're also without many revenue tools that others have been afforded,” Ald. Dimitrijevic said.
UW-Milwaukee economics professor James Peoples says sales tax increases are regressive, meaning people who make less money will have to pay a larger percentage of their income at restaurants and clothing stores if the sales tax increases.
"A sales tax is on the consumption but if you consume a greater percentage of your income on that consumption good, your tax burden is higher,” he said.
Oliver says if the sales tax goes up, he’ll leave the city to buy big-ticket items in the suburbs, and maybe altogether.
"That's something I might have to reconsider, is Milwaukee the place for me,” he said.
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