Small Municipalities Shared Revenues
The small municipalities shared revenue (SMSR) payment provides unrestricted aid to municipalities with low population and low equalized value. The payment supplemented regular shared revenue payments. Counties do not qualify for this payment.
Background
The SMSR payment (originally called the small community improvement payment) was enacted as part of the 1991-1993 biennial budget. Funding for SMSR payments was $10 million in 1994, $14 million in 1995, $10 million from 1996 to 1999, and $11 million for 2000 and 2001. Under a provision of 2001 Wisconsin Act 16 (the biennial budget), funding was increased to $11,100,000 for 2002 and $11,221,100 for 2003. 2001 Wisconsin Act 109 eliminated the payment for years after 2003.
Eligibility
A municipality qualifies for a SMSR payment if it meets all of the following conditions:
- Its population in the year before payment is 5,000 or less.
- Its municipal-purpose property tax rate for taxes payable in the year before payment is 1 mill ($1 per $1,000 of equalized value) or more. This calculation excluded tax incremental financing (TIF) district levies and values. For 2003 payments only, municipality could also qualify if its equalized value was no more than $10 million and its 2001/02 municipal-purpose tax rate was 0.85 mills.
- Its equalized value (defined as the total value of taxable property minus the value of manufacturing realty but plus the value of exempt computers) in the year before payment did not exceed $40 million. This limit did not apply to municipalities with a land area of 54 square miles or more.
The population and equalized value data used to determine eligibility were also used when calculating payments. However, for municipality with a land area of 54 square miles or more and an equalized value of more than $40 million was used when calculating payments.
Payments
The SMSR payment is determined in four steps:
- Base Entitlement: The base entitlement was the greater of $10 per capita or the following amount:
Base
Entitlement= ($55 -
((Equalized value
( $40,000,000X $ 55))
))X Population This entitlement directed more aid to municipalities with high populations and low equalized values. Municipalities with an equalized value for payment purposes of $32,727,273 or more qualified for a base entitlement of $10 per capita.
- Minimum entitlement: The minimum entitlement was the greater of $0 or the following amount:
Minimum
Entitlement= $18,000 - (Equalized value
( $1,000,000X $ 720)
)The minimum entitlement directed more funds to municipalities with low equalized values. The minimum entitlement was $0 for municipalities with an equalized value for payment purposes of $25,000,000 or more.
- Maximum entitlement: The maximum entitlement was the greater of $10,000 or the following amount:
Maximum
Entitlement= $45,000 - (Equalized value
( $1,000,000X $1,750)
)The maximum entitlement restricted payments from becoming unduly large. Municipalities with an equalized value for payment purposes of $20,000,000 or more qualified for a maximum entitlement of $10,000.
- Actual entitlements: The above three entitlements were compared. The base weas used except as follows: (a) if the base was less than the minimum entitlement, the minimum entitlement was used, or (b) if the base was greater than the maximum entitlement, the maximum entitlement was used.
When determine actual payments, entitlements were prorated to fully allocate the available funds. For payments in 2003, entitlements were prorated at 145.64%.
Payments for 2003 were distributed to 773 municipalities: 541 towns ($6,851,066), 221 villages ($4,236,151), and 11 cities ($169,883). The distribution by entitlement type is as follows:
|
TABLE 1 PAYMENTS FOR 2003 |
||||
|---|---|---|---|---|
| Type of Entitlement | Number of Municipalities | Percent of Qualifying Municipalities |
Total Payments |
Percent of Payments |
| Base | 421 | 54.1% | $5,445,344 | 48.5% |
| Minimum | 81 | 10.4 | 1,431,202 | 12.8 |
| Maximum | 276 | 35.5 | 4,344,554 | 38.7 |
| Total | 778 | 100.0 | 11,221,100 | 100.0 |
Payments date: Municipalities were notified of their payment for the coming year on or before September 15. Payments were made at the same time as regular shared revenues: 15% on the fourth Monday in July and the remaining 85% on the third Monday in November:
The 15 municipalities with the largest SMSR payments for 2003 are shown in Table 2.
| TABLE 2 15 MUNICIPALITIES WITH THE LARGEST SMSR PAYMENT IN 2003 |
||||
|---|---|---|---|---|
| Municipality (County) | Type of Entitlement | SMSR Payment | SMSR Payment per Capita |
2003 Payment per Capita |
| V. Norwalk (Monroe) | Maximum | $37,356 | $57.83 | 646 |
| V. Fairchild (Eau Claire) | Base | 32,945 | 60.67 | 543 |
| V. Viola (Richland and Vernon) | Maximum | 31,408 | 44.36 | 708 |
| V. New Auburn (Barron and Chippewa) | Base | 30,368 | 52.45 | 579 |
| V. Mattoon (Shawano) | Base | 30,321 | 65.49 | 463 |
| V. Prairie Farm (Barron) | Base | 30,143 | 58.99 | 511 |
| V. Linden (Iowa) | Maximum | 29,691 | 47.66 | 623 |
| V. Merrilan (Jackson) | Maximum | 29,683 | 50.91 | 583 |
| V. Taylor (Jackson) | Base | 26,658 | 57.48 | 516 |
| V. Ontario (Vernon) | Base | 28,769 | 60.31 | 477 |
| V. Camp Douglas (Juneau) | Maximum | 28,350 | 49.82 | 569 |
| V. Withee (Clark) | Base | 27,686 | 55.26 | 501 |
| V. Wilton (Monroe) | Base | 27,616 | 52.71 | 524 |
| V. Avoca (Iowa) | Maximum | 26,919 | 43.21 | 623 |
| V. Melrose (Jackson) | Base | 26,685 | 51.22 | 521 |
The 15 municipalities with the largest SMSR payments per capita in 2003 are shown in Table 3.
| TABLE 3 15 MUNICIPALITIES WITH THE LARGEST SMSR PAYMENT PER CAPITA IN 2003 |
||||
|---|---|---|---|---|
| Municipality (County) | Type of Entitlement | SMSR Payment per Capita |
SMSR Payment | 2003 Projected Population |
| V. Ingram (Rusk) | Minimum | $319.99 | $24,959 | 78 |
| V. Mason (Bayfield) | Minimum | 299.99 | 23,999 | 80 |
| V. Big Falls (Waupaca) | Minimum | 280.51 | 23,563 | 84 |
| V. Melvina (Monroe) | Minimum | 277.28 | 24,678 | 89 |
| V. Couderay (Sawyer) | Minimum | 260.08 | 23,927 | 92 |
| V. Woodman (Grant) | Minimum | 254.77 | 24,203 | 95 |
| V. Glen Flora (Rusk) | Minimum | 242.74 | 23,060 | 95 |
| T. Wilson (Rusk) | Miunimum | 240.05 | 20,164 | 84 |
| V. Tony (Rusk) | Minimum | 224.31 | 23,103 | 103 |
| V. Conrath (Rusk) | Minimum | 223.04 | 23,865 | 107 |
| V. Lublin (Taylor) | Minimum | 219.07 | 22,783 | 104 |
| T. Butler (Clark) | Minimum | 205.80 | 17,493 | 85 |
| T. White Oak Springs (Lafayette) | Minimum | 196.67 | 19,470 | 99 |
| V. Bell Center (Crawford) | Minimum | 196.37 | 22,582 | 115 |
| T. Anderson (Iron) | Minimum | 190.67 | 11,820 | 62 |
A breakdown of SMSR payments by town, village and city since 1996 is shown in Table 4. The table shows that the number of localities receiving a SMSR payment declined over time. The main reason for the decline was the increasing number of municipalities whose equalized value exceeded the $40 million limit for SMSR eligibility.
| TABLE 4 SMALL MUNICIPALITY SHARED REVENUE PAYMENT, 1996 – 2003 |
||||||||
|---|---|---|---|---|---|---|---|---|
| Towns | Villages | Cities | State Total | |||||
| Year | Recipients | Payment | Recipients | Payment | Recipients | Payment | Recipients | Payment |
| 1996 1997 1998 1999 2000 2001 2002 2003 |
792 761 727 703 650 621 573 543 |
$6,628,314 6,591,480 6,491,601 6,444,586 6,914,072 6,825,556 6,826,846 6,789,502 |
263 257 254 249 245 239 225 224 |
$3,086,195 3,117,782 3,221,630 3,294,813 3,830,011 3,915,849 4,094,032 4,263,264 |
35 34 32 26 21 20 13 11 |
$285,492 290,737 286,768 260,600 255,916 258,596 192,121 168,334 |
1,090 1,052 1,013 978 916 880 811 778 |
$10,000,001 9,999,999 9,999,999 9,999,999 10,999,999 11,000,000 11,109,999 11,221,100 |
Division of Research and Policy
P. O. Box 8933
Mail Stop 6-73
Madison, WI 53708-8933
Phone: (608) 266-2700
Fax: (608) 261-6240
Last updated May 6, 2005