A better way to fund municipal roads

Partnership is the key to economic success. Wisconsin’s villages and cities invite the Wisconsin Legislature to become partners in the state’s prosperity. Instead of debating whether and how the state can or should limit local government authority, the League of Wisconsin Municipalities is proposing a partnership focusing on the future.

The League represents Wisconsin’s cities and villages. Collectively, those almost 600 places called “Strum, “Eagle River,” “Green Bay,” “Milwaukee,” et al, are where most Wisconsinites live, work and play. Cities and villages are home to 70-percent of Wisconsin’s population, 87-percent of all manufacturing jobs and 89-percent of all commercial and professional jobs. Not to mention nearly all of the libraries, parks and schools that complete the picture in our minds of “community.”

Cities and villages provide fire protection for your homes and offices and provide you with safe, clean drinking water and other essential utilities. Cities and villages plow, police, pave and maintain the roads so that your drives to school, to work, and to recreation are safe. It’s a big job. Local roads (including county and town roads) account for nine out of ten road miles, and even the state and federal highways are maintained by local governments.

But Wisconsin’s system of paying for those local roads, police officers, fire protection, utilities and parks was designed around competition, rather than cooperation. Under the current property tax system, local governments can only grow when they acquire land through annexation or when local property owners develop that land. The shared revenue program, which is the state’s way of paying back to local governments the income and sales taxes raised locally, is out of date and disconnected from economic reality in many communities. It offers no incentive for sharing among governments. There’s a better solution.

The League of Wisconsin Municipalities is proposing replacing the shared revenue program with REDI. REDI stands for the Regional Economic Development Incentive. It is a new shared tax formula that rewards regions–including all of the towns, counties, cities and villages within a region–for overall job and sales growth.  Wisconsin would be divided up into economic regions. Each region would receive the same amount of income and sales tax revenue it had received in the past under the shared revenue program. But any additional dollars would be divided into thirds, with two-thirds distributed on a per-capita basis, and the remaining third distributed based in part on the percentage growth in new private sector jobs.

Imagine that; local governments rewarded for working together and helping the private sector create jobs!

REDI is the centerpiece of a local government legislative agenda that we call the Partnership for Prosperity. It’s available here. We congratulate Gov. Walker and all the newly-elected and re-elected state legislators, and offer the help and cooperation of the 4,000 local elected officials as you work to grow Wisconsin. Let’s get REDI for 2015.

Jerry Deschane is executive director of the League of Wisconsin Municipalities, a voluntary, nonprofit and nonpartisan association of Wisconsin cities and villages working to advance municipal government.

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