This article is the second in a series investigating how Door County and its municipalities are using or planning to use their state supplemental county and municipal aid in 2024, 2025 and beyond.
Door County municipalities are finalizing 2025 budgets and determining how to spend their increased shared revenue in the form of supplemental aid from the state. The intent of the policy change behind the increases is to tie local government funding to Wisconsin sales tax and make sure communities, especially small ones, can remain solvent.
In Door County, municipalities are putting the majority of the supplemental aid received in 2024 toward road improvements and maintenance, according to officials.
The shared revenue policy portion of Wisconsin Act 12 increased state aid to local governments by an average of 20 percent. The multi-part bill was signed into law by Gov. Tony Evers in June 2023. Municipalities received the final portion of their new supplemental aid this November.
The new weighted distribution formula for shared revenue splits municipalities into four categories. Those with less than 5,000 people will receive the largest percent increase – 64.8 percent – of municipal aid under the formula. That’s good news for the 18 Door County municipalities with populations less than 5,000.
The City of Sturgeon Bay, with a population of 9,861, falls under the distribution formula for populations of 5,000 to 30,000, and stands to receive about a 48 percent increase in their supplemental aid.
None of the communities in Door County fall under the other two categories used in the formula, for municipalities with populations between 30,000 and 110,000, and populations over 110,000.
Act 12 requires the supplemental aid to be directed towards law enforcement, fire protection, emergency medical services, emergency response communications, public works, courts, or transportation, but local governments can decide what the needs are in their own communities. It cannot be spent on administrative services.
Rural emergency service organizations and advocates, like Rep. Tony Kurtz (R-Wonewoc) who represents Assembly District 50 and is one of the authors of Act 12, have been calling on the state legislature to provide more funding for increasingly strained EMS departments.
According to Danielle Zimmerman, a member of Kurtz’s staff, the general intent of the legislation is to get more funding to local governments, particularly smaller municipalities. Bolstering public safety budgets is part of that, she said.
“Funding for public safety has been and continues to be a statewide issue. Urban and rural alike,” Zimmerman said.
Whether the intent to financially bolster rural EMS will be reflected in local government decisions on how to spend the money in the future remains to be seen.
Levy limits and inflationary gaps
Small town governments across Wisconsin use revenue from property taxes to cover many expenses. Levy limit increases, based on property taxes, are tied to new construction.
Net new construction refers to any building or improvement on property, minus demolition. For example, if net new construction is one percent of a municipality’s total property value, then the city or town or village can increase the property tax levy by one percent.
A 2011 law governing levy limit increases allows a local government to raise property taxes up to 2 percent, even if new construction rates are lower. Levy limit increases do not cover property values going up over time, however.
Around the same time levy limits were changing, smaller Wisconsin municipalities were receiving less state aid, according to a 2018 report from the Wisconsin Policy Forum. Low-growth municipalities were more negatively impacted by these limits.
Even though communities have been able to maintain spending on essential services like public safety, “a lack of new development (and consequently, new revenues) may be making it difficult for low-growth municipalities to spend more on programs and services that could attract new development. This, in turn, might contribute to a loop: levies continue to stagnate, communities become less attractive, and they continue to experience less development,” according to the report.
According to Rep. Kurtz’s office, the percentage of overall revenue that state aid accounts for in small communities’ budgets has declined. Unequal distribution formulas that favored larger communities are partially to blame, Zimmerman said.
“The shared revenue formula was frozen in 2004 and many communities have seen major changes since then, which created large gaps in funding,” she said.
Before Act 12, shared revenue policy had not been updated to reflect population growth, inflation or other economic factors. Local governments received the same amount of state sales tax, or shared revenue, no matter if costs increased or demographic changes led to a higher demand for services and greater strain on infrastructure.
For places like Door County, with record-breaking increases in tourism over the last few years, infrastructure and services are even more strained during peak times.
Since supplemental aid is now tied to state sales tax amounts, there will be an inflationary increase in aid to local governments over time, according to Joe Ruth, government affairs director for the Wisconsin Towns Association.
“This will fill inflationary gaps in some of towns’ costs long term as that pot of money grows,” he explained.
Where the money is going, for now
Due to the way most local budgets are structured, supplemental aid is not “dollar for dollar accounted for,” according to Beth Hanson, clerk for the Town of Union, and it is a part of a municipality’s overall revenue.
According to Hanson and other Door County municipal clerks, the supplemental aid will go in the general fund and then be spent primarily on road maintenance.
“Roads are not cheap,” Hanson said. “Every little bit helps.”
In the Town of Forestville, Chairman Kevin Guillette explained that the town does not fund services like law enforcement and emergency services directly, so the board is putting the supplemental aid into road improvements in 2024 and 2025.
“We don’t have any major improvements scheduled for 2025,” he said, “but it will enable us to continue to maintain our town roads.”
“This supplemental aid was a huge win for small communities and our county,” he added.
“It must be a slow news day if you’re contacting Jacksonport,” Chairman Tom Wilson quipped, but the town of 880 people is one of the small communities targeted by Act 12’s shared revenue increase.
Jacksonport has prioritized infrastructure and public safety, according to Wilson, who has served on the board for 14 years.
“We are always squeezing the budget. Our firefighters and first responders deserve a reward,” he said. “We have very effective services in Jacksonport.”
He said the town has been supporting public safety at the cost of roads, taking money from road maintenance when more emergent needs arise. The shared revenue increase will provide Jacksonport “a little breathing room,” he added.
The Town of Jacksonport received about $9000 in municipal aid annually before the increase. Supplemental aid in 2024 added an additional $44,888 to the town’s coffers.
Jacksonport maintains an all-volunteer fire department, with 41 members. The town is projected to spend $147,680 for the fire department budget in 2025, and the budget for public works and highways is $481,578.
Where does this leave emergency services?
Collective efforts of emergency service organizations and legislators like Rep Kurtz had some effect on how supplemental aid can support rural emergency service providers, said Alan DeYoung, CEO and executive director of the Wisconsin EMS Association, in an update to members.
DeYoung called the $275 million increase “a great start in providing more municipal based funding to help public safety.” Though the funds can be allocated for at least a dozen things other than emergency services, Act 12 includes a Maintenance of Effort condition that supports public safety.
The condition requires emergency services to be maintained at a level equivalent to the previous year, and makes sure some of the increase gets used on emergency services or that funding for emergency services does not get reallocated, according to DeYoung.
As far as the extent of supplemental aid’s impact on public safety, it is too soon to tell, Zimmerman said.
“We need to see how the first couple years go, see how the local units of government spend the money then we’ll be able to get a better picture of if it’s doing what we intended or if changes need to be considered,” she wrote in an email. Looking forward, at least one town might be using the supplemental aid to directly support public safety. Although numbers have not been finalized yet, Door County’s plans to upgrade the public safety communications system may lead to communities paying for some of the costs. According to Forestville Chairman Guillette, “Our township may need to use future supplemental shared revenue dollars to support …the upgrade cost.”