Wisconsin Legislature Approves Bipartisan Plan to Avert Milwaukee Bankruptcy and Boost State Aid

Created: JANUARY 22, 2025

In a significant bipartisan effort, the Wisconsin Legislature has passed a plan to rescue Milwaukee from impending bankruptcy while simultaneously increasing state aid to all communities. This landmark agreement, reached by Republican lawmakers and Democratic Governor Tony Evers after extensive negotiations, marks a rare instance of collaboration between the two parties.

The plan is part of a broader deal that includes a substantial increase in K-12 education funding, encompassing both public and private voucher schools. This agreement represents a major achievement for Governor Evers, now in his second term, and the Republican-controlled legislature, who have often struggled to find common ground.

Milwaukee officials had issued dire warnings about the city's financial situation, projecting bankruptcy by 2025 if no action was taken. The city has been grappling with an underfunded pension system and insufficient resources to maintain vital services such as police, fire, and emergency medical response. The bipartisan support for the plan underscores the urgency of the situation.

Governor Evers, speaking before the vote, emphasized the importance of the deal for both Milwaukee and the state's children, highlighting the increased funding for education and mental health services. He praised the spirit of compromise that allowed both sides to reach an agreement.

Despite the bipartisan nature of the deal, it has faced criticism from both Republicans and Democrats. Some conservatives view the plan as a bailout for Milwaukee, while some Democrats argue it doesn't go far enough to address the city's needs. There are also concerns about the inclusion of provisions unrelated to state aid, such as restrictions on local advisory referendums and limitations on the authority of local health officials.

Milwaukee City Hall

A key aspect of the agreement centers around the authority to raise local sales taxes to fund pension obligations and emergency services. The final version of the bill grants this power to the Milwaukee County Board and the Milwaukee Common Council, addressing a major point of contention with some Republicans who favored requiring voter approval for tax increases.

The plan not only addresses Milwaukee's financial crisis but also provides much-needed funding for all local governments across Wisconsin. This shared revenue, derived from a portion of the state's sales tax, represents a significant investment in local communities and will help address years of stagnant or declining funding. The increase is particularly significant given that shared revenue has remained largely unchanged for nearly three decades and even experienced cuts in previous years.

While both Evers and Republicans have celebrated the deal as a transformative victory, they acknowledge that it includes elements they oppose. For instance, Governor Evers has long been against expanding the state's private school voucher program, a component included in the overall agreement. This has drawn criticism from some Democrats who view it as detrimental to public education. Conversely, proponents of voucher schools argue that the increased funding will prevent closures and allow these schools to expand their services.

The passage of this bipartisan plan represents a major step forward for Wisconsin, addressing the urgent financial needs of Milwaukee while also providing critical support to local governments statewide. While the deal is not without its critics, it demonstrates the potential for compromise and collaboration to address complex challenges.

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