Did the warm Winter freeze finances in some Wisconsin counties?

You may recall that many Northern Wisconsin counties were reporting a significant drop in tourism during the Winter of 2024, because of a lack of snow and record warmth. This resulted in Governor Evers encouraging affected businesses to apply for disaster assistance through a program that usually is applied to droughts.

That declaration came in February, and I wanted to check and see if the lack of business was showing up in sales tax figures for these parts of the state. There is usually a two-month lag between the months when sales tax is originally paid (usually at the point of sale) and when those funds are distributed down to counties that the transactions are charged to.

So with April’s county sales tax distributions in place, is there an area that is suffering in collections? Let’s also add in March’s distributions, which reflect transactions in January, and compare it to those same two months in 2023, and here are the 9 counties with the biggest losses in sales tax revenue.

Most of these counties are rural and several are in the 715, but not all of them. I’m especially surprised by the double-digit drops in Dane and Brown Counties, and am not sure what’s going on with that, although my instinct is that it's just an odd item that isn’t a sign of anything long-term.

I also looked to see if there was a corresponding drop-off of sales taxes at the state level for January or February, to see if these double-digit drops were just the worst of a bad two months. But instead, the state had year-over-year increases in sales taxes, albeit tepid ones and below the 12-month inflation rate (1.95% for January, 0.56% for Feb), so some of that could be the drop in Winter tourism.

In contrast, there were big increases in state sales taxes the first 2 months of 2023 vs the same time period in 2022, so counties should be pulling in more sales taxes in 2024 than in 2022.

But combined county distributions for March and April were no different in 2024 than they were in 2022, and if you take out the 49% increase in Milwaukee County (due to their new sales taxes taking effect), they’re actually down more than 10% over that time. Given that the higher sales taxes haven’t trickled down to the county level, some of this might just be a lag in collections and/or distributions, and there should be a sizable increase in May that starts to make up for this. Especially since state sales taxes went up by 5.7% in March 2024 vs March 2023 (likely helped by an earlier Easter in 2024).

So the warm Winter of 2024 has had some effect, and lowered county sales taxes in several parts of Wisconsin. But with strong numbers at the state level for March, I’m going to wait to see what gets sent back to counties in the next couple of months before I think there is a significant fiscal concern. Counties are also slated to get a bit more in sales taxes starting in July, due to a provision in the Brewers stadium bill that reduces the share of money that the state keeps in exchange for collecting and sending out the local sales taxes for the counties.

In all, we can hope the setbacks of the Winter are short-term, and that we see a strong Summer for both everyday consumers and tourists which prevents any of that damage from being permanent declines with job losses, and a lack of resources for the counties to fix their roads and improve other infrastructure and services.