Weekly Fiscal Facts are provided to Wisconsin Newspaper Association members by the Wisconsin Policy Forum, the state’s leading resource for nonpartisan state and local government research and civic education. The Wisconsin Policy Forum logo can be downloaded here.
State policymakers provided the largest funding increase on record in 2025 for a program that reimburses municipalities to provide services to state facilities such as colleges, universities, or prisons.
This increased the state’s reimbursement rate for service costs incurred by municipalities. However, the gap still increased between municipalities’ estimated cost to provide these services and the reimbursements paid to them.
In 2025, state funding for Wisconsin’s Municipal Services Payments (MSP) program saw its first increase in more than two decades. These payments are reimbursements for police, fire, and waste services provided to state facilities, such as college campuses or prisons, that are located within the municipality’s borders. As stipulated under state law, these funds will be distributed to more than 350 municipalities in early 2026.
Under the 2025-27 state budget, funding for the program was increased 37.7%, from $18.6 million to $25.6 million. As a result, municipalities are being reimbursed for about 44.1% of what they were eligible to receive under the program in 2025 – compared to the program’s 37.6% reimbursement rate a year ago.
For many municipalities, this statewide funding increase will lead to larger municipal services payments this year. That, in turn, will reduce pressure on their local budgets and potentially their property taxpayers while helping them maintain service levels amid inflationary pressures.
At the same time, a sizable gap remains in the form of unreimbursed costs, or the gap between the amount of state funding appropriated for the program and the total amount that municipalities were eligible to claim. The latter amounts, also called their program entitlements, are meant to estimate the municipality’s share of the cost to provide these services to state facilities during the prior year.
Under the 2025 program (which again involves payments made in 2026), statewide unreimbursed costs were about $32.4 million, an increase from $30.8 million a year earlier. Without additional increases in state funding for the MSP program in future budgets, this gap is likely to widen further.
A few large municipalities, starting with the city of Madison, receive the bulk of reimbursements under the program. The next largest payment recipients are, in order of the amount received: the cities of Milwaukee, Oshkosh, La Crosse, Stevens Point, Green Bay, Whitewater, Eau Claire, Waukesha, and Menomonie.
The city of Milwaukee is seeing a particularly large increase this year in its payment, due to an unusual one-time event: the discovery of previously constructed state facilities that had been improperly excluded from the payment calculations for the program, but were newly included this year.
This information is provided to Wisconsin Newspaper Association members as a service of the Wisconsin Policy Forum, the state’s leading resource for nonpartisan state and local government research and civic education. Learn more at wispolicyforum.org.
