From the the Publisher Publisher From
Is a half percent all that bad? End of special sales tax in Brown County gives cause to reflect on the loss of potential local government revenue by Sean Fitzgerald, New North B2B publisher
When the Brown County Professional Football Stadium District stops collecting the half-percent sales tax it’s gathered for the past 15 years at the end of next month, it will put a halt to annual revenues of more than $23 million.
And while most of the approximately $300 million in total collected through the special tax since 2001 helped finance improvements and continuing maintenance to Lambeau Field in Green Bay, it’s also helped support improvements to the Resch Center and other community endeavors. An excess balance collected beyond the financial obligations for which the special sales tax district was initially created will be redistributed to towns, villages and cities later this year. More than 90 percent of Wisconsin counties have some sort of a special sales tax above the state-imposed 5 percent applied to most non-grocery products and services sold throughout Wisconsin. Those seven that don’t – and remain at a flat 5 percent sales tax – are all concentrated in northeast Wisconsin, including Calumet, Kewaunee, Manitowoc, Menominee, Outagamie, Sheboygan and Winnebago counties. Brown County will join that list Oct. 1. Few sane taxpayers willingly want to be taxed any more than they already are paying. But the sentiment of a half-percent sales tax being relatively nascent evokes the question of whether such a tax makes sense to support local government services in an environment where other new revenue sources are elusive to help offset increasing expenditure mandates and unavoidable annual payroll and benefits growth to maintain the level of local government service. It’s a question elected county officials are asked about regularly. But county supervisors’ positions on the issue aren’t likely to change much in the short term, even after witnessing what occurred in the laboratory of Brown County during the past decade and a half. Outagamie County Executive Tom Nelson said the topic hasn’t come up with his county board during the four years he’s been in office, and he doesn’t expect it will as the county’s existing revenue stream is in sound shape to support its recent budgets, in which taxes and spending have remained relatively flat, he explained. Winnebago County Executive Mark Harris said he did attempt to introduce the idea of sales tax into two of the 10 previous executive budgets he delivered to his county board since taking office in 2005, but the idea was quickly dismissed by supervisors in both instances. In each occasion Harris specified revenues generated from the proposed 4 | August | NNB2B 4 | August 2015 2015 | NNB2B
half-percent sales tax would be appropriated directly toward property tax relief, but he noted that aspect of the proposal was largely ignored. Like Nelson to the north, he indicated there’s no interest in adopting a separate sales tax in Winnebago County at this time. Further south in Fond du Lac County – one the most recent counties in Wisconsin to adopt a half-percent sales tax when it did so in 2009 – the experiment has offered a positive experience in boosting economic development resources with almost no ongoing complaints from county residents, according to Allen Buechel, who’s served in the role of county executive there since 1993. At the time the half-percent county sales tax was adopted by the county board, Mercury Marine faced difficult decisions involving possibly uprooting much of its local workforce. Revenues generated from the sales tax helped provide a no-interest, partially forgivable loan to Mercury Marine to enhance its equipment and facilities in Fond du Lac if it maintained and added to its local workforce. As Fond du Lac County’s largest employer, the initiative to save Mercury Marine jobs was a much easier sell to residents. In the first year of Fond du Lac County’s half-percent sales tax, the half penny provided $6.2 million in total revenues. Last year, the half-percent sales tax provided nearly $7.3 million in additional revenues – of which an estimated 25 percent was paid by others not from the county, Buechel said. By the way, the same estimate in Brown County is that nearly half of its $23 million county-sales tax revenue is supported by visitors. Altogether, proceeds from Fond du Lac County’s half-percent sales tax have been put into the Fond du Lac County Revolving Loan Fund to help businesses create more than 1,500 jobs in the county and retain thousands more, according to Buechel. Beyond the $50 million loan originally provided to Mercury Marine, it also provided a $6 million loan to Alliance Laundry in Ripon and dozens of smaller loans to other growing employers across the county. He noted the economic impact of the development assistance provided through the loans registers in at about a half billion dollars annually. “I personally feel the county sales tax was the better way to go,” Buechel told B2B this past month, comparing the options of increasing property tax to provide the same assistance to local companies or even losing them altogether. Fond du Lac County’s sales tax is set to expire by 2021, but Buechel wasn’t so sure county residents will want to forego the revenue it generates, or that it would be in their best interest to do so. After six years already of paying an additional 20 cents on a $40 dinner bill or another $100 on a $20,000 new vehicle, he said residents haven’t complained much in recent years about the sliver of a cost to boost economic development. Perhaps the rest of northeast Wisconsin wouldn’t find that same half percent to be so bad, either? n www.newnorthb2b.com www.newnorthb2b.com