Oshkosh legislators to continue pursuit of full Municipal Services Payment program funding

Yahoo

19-06-2025

OSHKOSH – Residents will likely continue subsidizing the cost of city-provided services for state-owned property exempt from property taxes.
The Wisconsin Legislature won't be increasing funding to the Municipal Services Payment program after the Joint Finance Committee removed Gov. Tony Evers' proposal from the state biennial budget June 13.
The decision means the state will continue to significantly underfund the program at 37.62%, just more than half of Evers' recent resolution of 72%.
Dig deeper: Hintz doesn't expect state to boost Municipal Services Payment Program funding despite Evers, Oshkosh proposals
The MSP program reimburses municipalities for police, fire and waste management services to property tax-exempt, state-owned facilities like UW-Oshkosh and the Oshkosh Correctional Institution.
Oshkosh receives just more than $1 million from the MSP, but the city has around $900 million worth of state-owned property, putting it as the third-largest holder of such facilities in Wisconsin behind Madison and Milwaukee.
As a result, taxpayers are left to make up the shortfall.
In his recent biennial budget, Evers proposed adding a further $17 million to the MSP's current budget of $18.6 million, which would see the state funding the program at 72%.
Oshkosh's common council recently passed a resolution asking the state legislature to fully fund the MSP at 100%, prompting a similar motion on the floor at the Joint Finance Committee.
But the issue has seemingly become a partisan one, with the motion being shot down via a 12-4 vote after all 12 Republicans on the GOP-controlled JCF opposed the funding increase.
This follows a recent workshop held last month with the Oshkosh Common Council during which State Rep. Nate Gustafson (R-55) said he couldn't commit to supporting the city's resolution of having the state fully fund the MSP.
State Sen. Rachael Cabral-Guevara (R-19) was not present at the workshop but also would not commit to the resolution in a subsequent email to the Northwestern.
In contrast, State Sen. Kristin Dassler-Alfheim (D-18) and State Rep. Lori Palmeri (D-54) said they would put forward a standalone bill if Evers' proposal failed.
"The citizens of Oshkosh are being taken advantage of,' Dassler-Alfheim told the Northwestern in an interview following the JCF vote. 'It is the state's obligation to pay for their resources that are located here in Oshkosh, so the governor asked for 72% and I would have hoped for a compromise maybe at 50%, but instead we got no increase.'
Emails to Cabral-Guevara and Gustafson asking about the apparent partisan nature of the MSP issue were not immediately returned.
"There is nothing political about protecting the taxpayers of Oshkosh from footing the bill for services provided by municipalities to state facilities," Dassler-Alfheim said.
Read more: State legislators support Oshkosh's resolution for state to fully fund Municipal Services Payment program
Created in 1973, the MSP program is supposed 'to make equitable annual payment to municipalities,' yet the state hasn't fully funded it since 1981.
According to a budget summary from the JFC, the highest percentage of entitlement cost covered over the last two decades was 88.1% in 2005.
MSP funding was reduced for both the 2009-11 and 2011-13 budgets, with the current funding of $18.6 million being set since 2011.
Despite Evers' proposal being removed from the state budget, Oshkosh may still have hopes for seeing increased state funding to the MSP.
The proposal could be drafted and introduced in either the Assembly or the Senate as a standalone bill in the same language used in Oshkosh's resolution.
But that bill would likely have to be referred to the same Joint Finance Committee that removed Evers' line in the budget and voted against the motion for the legislature to fully fund the MSP.
'This is falling on the backs of Oshkosh citizens and that's inappropriate, so I will keep fighting for them,' Dassler-Alfheim told the Northwestern
Oshkosh City Manager Rebecca Grill explained the Joint Finance Committee's decision only further compounds the city's 2026 budget process, which starts with a budget deficit of over $3 million.
Common council member DJ Nichols then made comments suggesting Oshkosh could contemplate legal action.
"All options are on the table," Nichols told the Northwestern. "If the legislative branch can't solve this, maybe it's time to explore if the judicial branch can provide any relief — not just for Oshkosh, but for each of the over 360 municipalities that the JFC has betrayed."
In a post on his official Facebook page, Nichols' fellow common council member Kris Larson took further issue with the situation seemingly becoming a partisan issue.
'MSP is a PERFECT example of something that all of your reps should be pushing for, for YOU, as it directly benefits YOU (and would benefit their communities ... which is literally their job),' Larson wrote. 'YOUR ability to pay the most fair property tax rate should not have anything to do with whether your representatives have an R or a D after their name ... but on this subject, it does.'
The 2025-27 biennial state budget is slated to pass July 1.
Contact Justin Marville at [e-mail] and follow him on X (formerly Twitter) at @justinmarville.
This article originally appeared on Oshkosh Northwestern: Oshkosh legislators to continue pursuit of full MSP program funding