You are the owner of this article.
Palenick: Referendum unlikely to be solution to Racine's fiscal needs
Racine

Palenick: Referendum unlikely to be solution to Racine's fiscal needs

{{featured_button_text}}

MILWAUKEE — Appealing directly to Racine taxpayers for more money is an unlikely solution to budget struggles, the city’s administrator says.

City Administrator Jim Palenick joined a panel of municipal leaders on Monday afternoon in Milwaukee to discuss the financial stresses cities face. The event was part of a luncheon series hosted by the Wisconsin Policy Forum. Monday’s event, held at the Italian Community Center, brought together Milwaukee Mayor Tom Barrett, South Milwaukee Mayor Erik Brooks, Beloit City Manager Lori Luther and Racine’s Palenick. The panel discussion built off analyses by the Wisconsin Policy Forum about the fiscal health of Milwaukee and Racine.

The forum’s report on Racine was the subject of an April article by The Journal Times. The article detailed how a combination of state policies, past local practices and future demands warrant monitoring of Racine’s fiscal future — despite the finances being “well managed,” according to the forum’s report.

How does Racine's financial future look? New report digs deep

On Monday, Palenick discussed how some of those economic realities affect the city. Racine is landlocked, Palenick noted, because of its past practice of providing water and sewer service to outside communities without requiring annexation into the city. As a result, Racine struggles to generate the net new construction that the state requires in order to grow its tax levy.

“We sort of have this perfect storm of things working against us to try to simply keep up with just providing simple, regular services to our citizens,” Palenick told the audience.

He said the city’s main opportunity to grow is through “in-fill” redevelopment projects, a priority he identified in a Journal Times report earlier this month.

Palenick marks 1st-year anniversary; sees 'bright' future for city

Rob Henken, the president of the Wisconsin Policy Forum and moderator of Monday’s discussion, said the idea behind the state law was to protect taxpayers from growing bills that were a result of improvements in property values.

“(Instead) try to link the growth in property taxes as a whole for municipal governments to that new construction, to have that new construction yield incremental growth in property taxes every year,” he said.

Referendum

Brooks, of South Milwaukee, talked about how his community recently supported a referendum that allowed the city to increase its tax levy so that it could maintain its paramedic services. That solution is not likely viable for Racine, Palenick said.

The city’s tax rate exceeds its suburban neighbors’ rates, according to the forum’s analysis. In 2016, the report shows, Racine’s tax rate was $16.74, while Mount Pleasant’s was $7.23, Caledonia’s was $6.86 and Sturtevant’s was $5.35. Under those circumstances, Palenick said, a successful referendum for additional revenue would be “virtually impossible.”

The city has not yet discussed a direct appeal to its taxpayers of that nature, Palenick said, but the potential remains should circumstances arise in which services could be jeopardized.

“We haven’t gotten there, but that’s a discussion that could happen in the future,” he said.

Sales tax

Panel speakers, including Milwaukee’s mayor, said more diverse options for raising revenue would relieve some of the pressures local governments face to provide services to their residents. Barrett suggested communities could benefit from the option to charge a local sales tax.

Palenick agreed, especially because of Foxconn Technology Group’s incoming development in Mount Pleasant. A sales tax would give the community the opportunity to raise funds through people besides its own residents who are also adding to the economy, he said.

“If we’re going to capture the benefit of all that new spending that likely is going to come to our community, particularly during the Foxconn construction, while it’s going on, the very best way to do that is a sales tax — with the least burden on the existing population,” he said. “In that regard, I think the timing could be very good.”

“If we’re going to capture the benefit of all that new spending that likely is going to come to our community, particularly during the Foxconn construction, while it’s going on, the very best way to do that is a sales tax — with the least burden on the existing population. In that regard, I think the timing could be very good.” Jim Palenick, Racine city administrator

“If we’re going to capture the benefit of all that new spending that likely is going to come to our community, particularly during the Foxconn construction, while it’s going on, the very best way to do that is a sales tax — with the least burden on the existing population. In that regard, I think the timing could be very good.”

Jim Palenick, Racine city administrator

Quote
0
2
0
1
1

Get local news delivered to your inbox!

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Reporter

Sari Lesk covers the City of Racine, Gateway and UW-Parkside. She is new to the community and moonlights as an amateur baker.

Related to this story

Get up-to-the-minute news sent straight to your device.

Topics

News Alert

Breaking News