By Brittany Carloni

Wisconsin Watch

Wisconsin municipalities and school districts, which rely on taxpayer dollars to fund their services, are running into rising frustration from the residents who pay those costs.

The frustration comes as more local governments are turning to wheel taxes to fund transportation-related services as costs of construction materials rise and local leaders say the Legislature over the years has constrained ways municipalities can raise additional revenues. Nearly half of Wisconsin residents are paying a wheel tax in 2025, according to the Wisconsin Policy Forum. 

The number of Wisconsin school districts turning to taxpayers to support referendums has also grown in recent years with the state seeing more than 200 ballot questions in 2024, 148 of which were operating referendums. Ninety-four districts sought referendums in elections this year, the most in an odd-numbered election year since 2007, the Policy Forum noted earlier this year. 

But Wisconsin taxpayers’ support for funding revenue needs of local governments and school districts appears to be waning as residents grapple with their own rising costs from energy bills to health care payments.

The Marquette University Law School Poll conducted in October showed 56% of voters found lowering property taxes to be more important than funding public education, a number that has gradually grown in the last two years. Between 2015 and 2022 more voters supported funding public schools over lowering property taxes. Additionally, 57% of Wisconsin voters in October said they would be more likely to vote against a school referendum when, just four months earlier, 52% of voters said they would support one. 

The public discontent with government taxes and fees aligns with a longtime Republican strategy to reduce the size and reach of government. Similar frustration with the role of government in the wake of the Great Recession swept Republicans into power in Wisconsin in 2010, and they’ve kept control of the Legislature since then.

Heading into the next cycle, Republican lawmakers are promoting bills that seek to limit when taxpayers can be asked for more funding.

One bill from Sen. Rob Hutton, R-Brookfield, would require referendums for local governments that want to establish a wheel tax and mandate the municipalities and counties with existing wheel taxes to go to referendum to keep their fees in place. Hutton, who is up for reelection in 2026, holds perhaps the most vulnerable of three Republican Senate seats that Democrats are targeting in elections next year. 

A resident brought the idea for the wheel tax bill to Hutton’s office as New Berlin and Elm Grove considered implementing their own vehicle registration fees earlier this year, his chief of staff said in an email to Wisconsin Watch. The New Berlin Common Council officially rejected the option to pursue a wheel tax in July. 

“Some may argue that these are not make or break amounts of money, and that certainly may be the case,” Hutton said during an October hearing on the Assembly companion to his bill. “But every cost adds up to many citizens in these communities, especially those families who are living paycheck to paycheck.”

Hutton’s bill is scheduled for a public hearing Wednesday, just a week after the Eau Claire City Council voted to raise the city’s wheel tax from $24 to $50. Eau Claire residents will pay $80 between city and county fees with the new increase, which is currently higher than Milwaukee where city residents pay $60 in wheel taxes split between the city and county. 

The vehicle registration fee increase will give the city of Eau Claire an additional $1.2 million, which the city’s finance director told councilors was necessary for a balanced budget without making other cuts. 

“If we didn’t have the wheel tax available, we would have to make very significant cuts,” Stephanie Hirsch, Eau Claire’s city manager, told Wisconsin Watch. “We can’t really touch our public safety departments because of state laws that require us to maintain spending and service maintenance of effort laws, so it would be coming from those public works functions or the other nonmandated services that we provide like operating a very popular outdoor pool or maintaining parks.” 

But Eau Claire residents opposed to the proposal said it was wrong to approve a wheel tax increase as costs are rising for food, health care, energy and more. 

“Another fee increase, especially on something as basic as the ability to drive to work, drive to school or appointments, should be completely off the table right now,” said Elizabeth Willier, who told the council she organized resident petitions against doubling the wheel tax through conservative group Americans for Prosperity Wisconsin.

Growing tax frustration

Citizen anger against government taxes isn’t new. But it seems that taxpayers in Wisconsin have especially become more engaged in government in the years since the coronavirus pandemic, said Paul Rozeski, the director of government and member relations with Wisconsin Property Taxpayers, Inc. 

More people want answers about where their money is going, he said. 

“We have a lot of small business members, and for them, it’s death by 1,000 paper cuts,” Rozeski said. “Clearly, more and more taxpayers are feeling the same way.” 

That public sentiment on referendums increased as 71% of Wisconsin’s school districts learned in October they will receive less general aid for the 2025-26 school year than they did the prior year. State general education aid funding was kept flat in the biennial budget earlier this year.

It could lead districts to make budget cuts, raise property taxes or even turn to voters with referendums to make up those funding gaps. 

“I think that’s not going to slow down,” Sen. Jeff Smith, D-Brunswick, said last month of school district referendums. “I think we’re going to see even more, sadly.” 

Under current law Wisconsin school districts will receive a $325 per pupil increase each year in how much revenues they can raise from a combination of state aid and property taxes for the next 400 years due to Democratic Gov. Tony Evers’ creative veto in 2023.

It’s not clear yet how many school districts might seek referendums in 2026. State law gives districts up to 70 days before an election to adopt a resolution for a referendum, a spokesperson said.

Solutions at the Capitol?

Republican legislative proposals at the Capitol have sought more transparency from school districts that seek additional dollars from taxpayers or more participation from local governments that seek revenues through wheel taxes. Additionally, the Assembly Committee on Education signed off on a series of bills looking to encourage school district consolidation across the state.

Public hearings were held earlier this session on companion bills that would prohibit recurring operating referendums and limit ballot questions from applying to more than four years. Hutton and Rep. Amanda Nedweski, R-Pleasant Prairie, also brought forward a proposal to bar school districts from pursuing referendums if they are not in compliance with Department of Public Instruction financial reporting requirements. 

Nedweski during a public hearing in October cited Milwaukee Public Schools as a reason for the bill. Voters passed a $252 million MPS referendum in 2024, but the district had failed to file 2023 state financial reports on time, which led DPI to withhold state funding

The likelihood of the Republican proposals receiving Evers’ signature is slim. While Hutton’s Senate bill on wheel tax referendums will receive a public hearing, it’s not clear what appetite other lawmakers will have for the proposal. 

The Assembly Committee on Local Government held a public hearing on the Assembly version of Hutton’s bill in late October, but chair Rep. Todd Novak, R-Dodgeville, told Hutton and Rep. Dave Maxey, R-New Berlin, that he opposed the proposal.

“If they don’t like a wheel tax, they can replace the board,” Novak said. 

Hirsch in Eau Claire understands that the increased wheel tax may be a hardship for residents with the combination of city and county fees. But requiring a referendum would take away options the city needs, she said. 

“What we really wish would happen is that the state government would give us more local control and more tools,” Hirsch said. “For example, what we wish for most is a local option sales tax. We really don’t like putting all of the weight on property taxes, and we don’t want to charge people the wheel tax. We wish there were other tools in the tool kit.”

— Wisconsin Watch is a nonprofit, nonpartisan newsroom.