You can find more detailed information on the budget, including presentations to the Council that outlines some of the constraints, at this site: Budget | City of Eau Claire, Wisconsin For additional background on the budget and cuts considered, you can review the Council’s deliberations in these two work sessions:

• September 9th FY26 Work Session: Discussion begins around minute 20: City Council Meeting - Tuesday

• October 28th FY26 Work Session - Discussion begins around minute 47: City Council Meeting - Tuesday

The State’s funding model for local government significantly limits ways to generate revenue to pay for expenditures. Wisconsin finance and tax laws significantly limit how we can pay for services, as follows:

State Sales Tax Aid: The State taxes sales and then distributes some of this funding to municipalities based on a “shared revenue” formula. However, this formula is outdated, and amounts distributed do not follow any discernable pattern. Among larger cities, Eau Claire has one of the lowest per capita shared revenue, at about $100/resident. If, for example, Eau Claire had the same per capita shared revenue as Superior has, it would result in an additional about $15 million aid from the state. 

Ability to Diversity Revenue: State policy makers have closed off avenues used in other states to pay for local services, such as local sales tax, regional taxing authorities, a municipal room tax, user fees, marijuana licensing fee, locally-operated liquor stores, local income tax, and more.

Inflation and Taxes: Municipalities are able to increase taxes by how much new development (or Net New Construction) has occurred in the prior year. There is, though, no adjustment for inflation. In periods of high inflation, like we’ve seen recently, this creates a significant structural deficit. Since 2021, if there had been a CPI adjustment to our levy limits, we would have had an additional $9 million in revenue.

For example, the chart below shows what we have been able to spend on parks for the past 30 years. The grey line is what the cost is with no adjustments for a growing population or inflation. The blue line is an adjustment for a growing population on a per capita basis, and our budget has been able to keep up with that growth due to the NNC levy adjustment. The red, however, is how much the budget would have to increase to keep up with inflation. We are not able to make those adjustments. As a result, we spend half of what we spent in 1994 per capita on parks, even though we have much more parkland. 

Due to the State’s funding model for local government, the City has made significant reductions in service delivery and spending (on an inflation-adjusted basis) over the past 30 years. Two ways that the City has proposed to balance the budget this year are through implementation of paid parking and an increase to our Local Vehicle Registration Fee. We weighed making these increases against implementing cut scenarios.

Because of decades of implementation of efficiencies, additional cuts will be directly to services and to funding for partners. The City provides some funding to the Senior Center and Downtown Eau Claire Incorporated (DECI), for example. Cuts to City Departments will generally be to core services, such as street plowing/maintenance, or Transit. Or, they will be cuts to non-mandated services, such as operation of the Library, pool, parks, or ice rink.

We are concerned that making cuts will impact the quality of life in Eau Claire and our ability to continue to attract residents. Growth (or Net New Construction) is a key element that determines our future revenue, based on State formulas, so not growing results a vicious cycle of cuts. We have been investigating shared services, however, other government partners are also struggling, so there is not always a benefit of absorbing their work, as it comes with an additional gap between need and resources.

Any car that is principally garaged in the City of Eau Claire will pay the $50 fee, if passed. The fee gets paid when a car owner renews their license plates each year. Eau Claire currently has 48,550 vehicles garaged here, and we anticipate this number will grow modestly each year. (Information is available here: Wisconsin DMV Official Government Site - Lists of vehicle information)

Wisconsin State Statute 341.35 establishes the authority of a municipality to enact an ordinance imposing an annual flat municipal registration fee on vehicles registered under s. 341.25(1)(c). The resolution adopted by City Council, Section 3.40.020 “Adoption of a Local Vehicle Registration Fee” in the City of Eau Claire Code of Ordinances enacting a Local Vehicle Registration Fee (LVRF) to be used for the City’s transportation needs such as surface improvements which will extend the life of the City street system, safety measures such as signage and pavement marking, accelerating projects that may otherwise been pushed out later in the budget cycle.

Residents have reached out to us with concerns about the cost of living, and we very much share residents’ concerns. Some steps we are taking to try to prevent Eau Claire residents from bearing so much of the burden include:

• Looking for ways to provide residents who have paid the LVRF ways to pay less for City services, such as parking. This may allow us to capture some revenue from visitors to the community to help pay for infrastructure that gets used by guests or commuters.
• Laying the groundwork for development of a long-range plan for where to make adjustments, which the Council and a newly formed Community Task Force will consider early in 2026.
• Lobbying the State for more ways to generate revenue, so that we are not so reliant on property taxes and fees like LVRF. Wisconsin is unusual how it structures it tax policy.

The passage of the wheel tax in 2023 allowed for the City to continue road projects at the same pace as it had been prior, while also giving the able to add high-priority projects and address safety concerns. The funding goes directly into Transportation Capital, which is housed within the City’s CIP (Capital Improvement Plan) Budget every year. Collection of funds started in October of 2023, which started to allocate for 2024 Project.  

In November of 2025 an updated fee was approved. The increase over the initial 2023 amount will be in effect until December 31, 2028. 

The 2024 Budgeted amount was set at $1 million, which funded the following road projects:

In 2025, the LVRF remained at $24-dollars a year with a budgeted amount set at $915,500, which funded these projects:

Additionally, $100,000 was budgeted within the 2025 Highway Safety Improvement Program, which partners with the Wisconsin DOT on the Highway Safety Improvement projects.

For the 2026 Capital Improvement budget LVRF is set to fund $1,000,000 LVRF Road Program. Items being considered for 2026:

Fourteenth Street – Folsom St to Truax Blvd

Uranus Ave – Piedmont Rd to Eddy Lane

Pavement Marking for Hastings Way

Additionally, $25,000 is budgeted within the 2026 Highway Safety Improvement Program, which partners with the Wisconsin DOT on Highway Safety Improvement projects.

An increase from $24 to $50 will allow for continued transportation services at the current levels, without any reduction. The increased amount will allow for funding of public transportation, which allows for continued construction projects, and maintenance that will allow the City to maintain the Streets without letting city roads deteriorate to a level that could increase costs of construction or lead to shorter life of roadways because of deferred maintenance.