Residents may face higher property taxes after largest state reimbursement gap ever is reported

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Published: Sep. 29, 2020 at 3:21 PM CDT
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MADISON, Wis. (WMTV) - Cities across the state are facing the largest gap on record in state reimbursements for costs that serve state facilities and some residents may face higher property taxes this year in exchange for the benefit of housing state properties.

The Wisconsin Policy Forum reported Tuesday that estimated municipal costs for services like police, fire protection and waste removal have risen sharply in the past decade, while state leaders have decreased funding for the program that provides reimbursement for such services.

The Municipal Services Payments program is meant to prevent local taxpayers, who fund most services costs in their city, from having to subsidize them for the state through property taxes.

The forum also reported that about $18.6 million was given in 2019 from state funding to reimburse city services related to state-owned facilities, which is a little less than 35% of what communities are eligible to receive. This is the smallest share on record and resulted in a total funding gap of over $35 million in 2019.

Madison is receiving the most funding from the program, with nearly $8.4 million in 2019. Three hundred and sixty one cities received a payment of some amount last year, and some received a “sizable sum”. The report noted that those with college campuses or state prisons were especially included.

Other cities in the top 10 list for funding include Milwaukee, Oshkosh and La Crosse. Three of the top four payment recipients on a per capita basis are actually small cities, including Mauston, Camp Douglas and La Pointe.

The Department of Administration administers the MSP program and uses a formula to calculate what each city should get in “entitlements”, or reimbursements.

The forum also noted that even before the pandemic, state legislators and past governors have made the reimbursement program a “lower priority relative to other budgeting needs.”

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