Waukesha County Executive warns of ‘deep service cuts’ after withdrawing sales tax plan

A proposal to implement a 0.5 percent sales tax in Waukesha County is off the table, a move that could lead to “deep service cuts” starting next year. 

Wisconsin has a statewide sales tax of 5 percent. Most counties across the state have their own 0.5 percent sales tax on top of the state sales tax. But Waukesha County, the third largest county in the state, does not. It is one of only two counties without a local sales tax.

Waukesha County Executive Paul Farrow introduced a measure to implement the 0.5 percent sales tax in October. It would have generated an estimated $60 million a year for the county. 

But speaking to the Waukesha County Board of Supervisors last week, Farrow said the sales tax measure is now officially “dead.” He withdrew the plan after it was met with backlash from some in the community.

“Without a significant change in how the state funds local government, or a change in how our local government funds itself, our future balanced budgets will come at the cost of deep service cuts starting in 2026,” Farrow said during the meeting. 

In an interview with WPR, Farrow said he’s now moving his efforts to talking to state lawmakers to ask for more state aid for the county.

“We’re looking forward to having the conversations with the legislature, and hope they’re willing to understand their responsibilities,” Farrow said. 

The move to look at the sales tax comes after a bipartisan law to send more money to local governments passed in 2023. But Farrow said that deal wasn’t good enough.

“The counties, which are truly an arm of the state and an implementer of the state, didn’t receive what they need to continue to serve the people the way we should,” Farrow said. 

Rob Henken, the immediate past president of Wisconsin Policy Forum, said county governments in Wisconsin are “arms of state government.” 

“There are certain mandated services that counties must provide on behalf of the state,” Henken said. 

Henken said that includes health and human services and public safety duties. Counties are also “primarily responsible for the day to day administration of the circuit court system,” according to a 2022 Wisconsin Counties Association document. 

In Waukesha County, around 44 percent of all property tax dollars collected from residents go towards programs and services that are mandated by the state, according to Farrow.

Counties are mainly funded through state aid and property taxes. The state also limits how much a county can increase its property tax levy.

Henken said rising costs and inflation also factor into services counties provide for the state.

“Counties now need to pay more for corrections officers, for sheriff’s deputies, for social workers, just because of the tight labor market and the impacts of inflation,” Henken said.

That’s one of the reasons 70 of the state’s 72 counties have a sales tax, according to Henken.

“And it [sales tax] not only helps some of their budget challenges, but also can help diversify revenue streams,” Henken said.

Waukesha County cut two positions in the Waukesha County Sherriff’s Department in the 2025 budget. Farrow envisioned similar cuts in the coming years without more help from the state.

In a statement he provided to WPR, State Sen. Chris Kapenga, R-Delafield, said he was was glad the sales tax proposal is off the table.

“Waukesha County leaders will need to make some decisions on trimming spending,” Kapenga wrote. “They may not like it, but it’s what the average citizen has had to do for the last couple of years.”

Waukesha County isn’t alone in asking for more help from the state. Milwaukee could be facing a “persistence of significant budget gaps” in next few years, leading Mayor Cavalier Johnson to continue talks with state lawmakers.

Racine County was the most recent county to implement a sales tax. Racine County Executive Thomas Roanhouse said the county would have been forced to cut several positions without the extra revenue.

Winnebago County is the other county that doesn’t have a sales tax currently. In a statement he provided to WPR in October, Winnebago County Executive Jon Doemel said there was no “active pursuit” to implement the sales tax in 2025.