It’s not a “Milwaukee bailout.”
The Republican-controlled Legislature and Democratic Gov. Tony Evers agreed to a historic shared revenue plan that allows the City of Milwaukee and Milwaukee County’s elected representatives to vote on sales tax increases to deal with their massive pension liabilities.
No, the sales tax provision is not a “Milwaukee bailout,” as some conservatives have dubbed the plan.
The dictionary definition of a bailout: “an act of giving financial assistance to a failing business or economy to save it from collapse.”
But Republican legislative leaders aren’t giving Milwaukee extra financial help beyond the shared revenue increases they are also giving to every governmental entity in Wisconsin. The other communities aren’t getting bailouts, either…
They are giving Milwaukee’s elected representatives the ability to raise a tax on their own constituents. (At the same time, they cut a tax for businesses in the state, the personal property tax.)
It’s not a bailout when governmental officials raise property or gas taxes, either. It might be a choice that few like, but it’s not a bailout.
When legislators raise taxes, people don’t call it a bailout.
It’s not a bailout when voters approve massive school referendums, is it?
A bailout would be the state of Wisconsin cutting a massive check to eliminate the pension liability outright, but that’s not what is happening here. The pain of a sales tax will be borne by Milwaukee residents, not those in, say, Superior. IF Milwaukee politicians approve it.
As an aside, in Detroit, which went bankrupt, the State of Michigan did cut a big check. Michigan literally bailed out Detroit. The Wisconsin plan doesn’t do that.
You can criticize the sales tax provision, but be aware that there are really three options here.
1. Bankruptcy (we outline the costs of that in an upcoming story, which could include slashing retired cops’ pensions, service cuts, loss of bond rating, and loss of investment.)
2. Massive cuts in services (such as 500 Milwaukee police officers).
3. The sales tax. This option spreads the pain. All citizens are going to pay a bigger price at the grocery store too, even the slackers, not just the hard-working cops or city workers.
It’s a choice of three lesser evils. The Legislature is picking the least evil. Yes, Milwaukee got itself into this position. But these are the options we have.
We like the fact the Legislature baked guardrails into the plan so the city can’t blow the new sales tax money on new DEI positions or a street car while cutting cops. The Legislature ended defunding of police and is forcing Milwaukee toward better fiscal decisions. See our list of 13 conservative wins in the shared revenue deal, which also expanded school choice.
The full Legislature still needs to approve the deal. If it’s approved, the Milwaukee Common Council and County Board would need to approve a sales tax with a 2/3rds vote.
Language matters. Argue why #1 or #2 would be better than #3 if you want – it’s a free country – but don’t call it a bailout.
