Sales Tax Ordinance 

UPDATE: On October 22, 2024, County Executive Farrow withdrew this proposal from consideration by the County Board to seek additional public input on the issue and pursue a change in state law to would allow the County to implement a sales tax at a rate less than current state law permits.
The Wisconsin State Legislature will convene in January of 2025 at which time the County will work closely with Waukesha County’s legislators, and legislative leaders in Madison, to pass a bill to change state law relating to county sales tax collections.
To support such a change, please call your state legislator at: (800) 362-9172

On Thursday, October 3, 2024 the County Executive introduced an ordinance to authorize a 0.5% county sales tax to be added to the existing state sales and use tax of 5%. The ordinance implements a sales tax beginning on July 1, 2025.

The plan is a compromise proposal to address our critical fiscal needs for nearly a decade. The specifics of the proposal are as follows:

1. Up to 20% of sales tax collections (estimated $12 million if sales tax collections reach $60M) would go toward a direct reduction of property tax bills partially offsetting the impact of the sales tax on property owners. With the property tax cut in place the impact of the sales tax on a homeowner drops from about $12.00 per month to roughly $7.25 per month. The tax cut will appear on the December 2025 tax bills. 
2. Up to 20% of the sales tax collection beginning in January of 2027 (estimated to be about $12 million if sales tax collections reach $60M) would go toward local property tax reduction through monthly municipal aid payments. The level of aid will be determined based upon population of the municipality. Local aid levels would be revisited every two years in conjunction with the state budget cycle.
3. The remaining 60% of sales tax dollars (roughly $36 million of an estimated sales tax collection of $60M) will be used to further reduce the County’s reliance on the property tax levy by eliminating our annual budget shortfall for at least the next 8 to 10 years and provide funds to the capital budget further reducing the County’s need to borrow funds.

Since 2006, our revenue has been constrained by state law, and it has not kept pace with the rising costs of providing essential services. Each year, county residents contribute approximately $1.5 billion in sales and income taxes to the state government in Madison. In return, our county receives just $60 million in state aid, ranking us as the second lowest in per capita state aid among Wisconsin counties.

Background on Sales Tax Need: County governments are an extension of the state, tasked with implementing and enforcing state laws and regulations. Ideally, the state should fully fund the cost of these mandated services. Unfortunately, it has consistently fallen short of this obligation. In the upcoming 2025 Waukesha County Budget, approximately 44% or about $51 million of the revenue collected from county property taxpayers will be allocated to cover the state’s funding shortfall.

Waukesha County has a long-standing reputation for fiscal prudence and effective planning, holding the highest attainable bond rating (AAA/Aaa) for decades. Our data-driven decision-making and conservative budgeting have distinguished us as one of the nation’s top-performing counties. Despite our commitment to fiscal responsibility, nearly 20 years of levy limits have left our budget approximately $5 million short each year. This shortfall has necessitated significant cuts to balance the budget and maintain core services. Without a sustainable revenue solution, we will continue to face difficult decisions that will adversely impact our residents.

Timeline:

October 3, 2024                              Sales Tax Ordinance Introduced

October 14, 2024                            Joint Meeting of the Finance and Executive Committees

October 22, 2024                            Meeting of the full Waukesha County Board (Sales Tax Vote)

UPDATE: October 22, 2024, County Executive Withdraws Sales Tax Ordinance

July 1, 2025                                     Sales tax collection was set to begin

Jan to Dec 2026                              First full year of County sales tax collection

Jan 2027                                         Property tax cut in place & municipal aid payments begin

Sales Tax Fast Facts

Sales Tax FAQ

Municipal Aid Estimates

Waukesha County Sheriff Statement of Support 

Waukesha County District Attorney Statement of Support 

Waukesha County Clerk Statement of Support

Waukesha County Clerk of Circuit Court Statement of Support