Wheel tax increase among other discussion areas for Eau Claire's 2026 preliminary budget

EAU CLAIRE — While discussion is expected to continue on the budget approval for the City of Eau Claire, the release of the preliminary budget gives a prediction of what is on the table for 2026.

In total, the 2026 budget sits at roughly $198 million. When compared to 2025’s adopted budget, the overall budget total increased by $8.4 million, or roughly 4.5%.

Eau Claire City Manager Stephanie Hirsch said one reason for the increase has been their work to set up a new health insurance provider for city staff. Several other areas and impacts from overall rising costs are also contributing to the increase.

“We’re working on settling our police and fire transit contracts,” Hirsch said. “With that, we see some increases with those payments for staff that reflect the significant inflation that has occurred over recent years.”

Although the city now looks to vote on a balanced budget for 2026, Hirsch said Eau Claire and many other communities have faced their own set of challenges. Municipalities are very limited by how they can generate revenue to pay for expenditures. Sales taxes are a major revenue source for communities like Eau Claire, she said, but the amount returned from the state has been decreasing over time.

“We did have a significant gap that we had to close with our budget this year. And in recent years, we had a referendum that allowed us to close our gap, and we did see a small increase in shared revenue or state aid in one of the years,” she said.

Many communities have to turn to other funding sources. Discussion in Eau Claire has been to increase the local vehicle registration fee, or wheel tax.

Hirsch said, “This year, we talked about different cut scenarios with the council in order to close the budget gap. They suggested that we increase the local vehicle registration fee to address that gap this year, but that we continue to focus on trying to work with other communities to lobby the state to allow municipalities to use other mechanisms to fund local government.”

Wisconsin law allows towns, villages, cities or counties to collect an annual wheel tax in addition to annual registration fees. The proposed change would increase Eau Claire’s wheel tax from $24 to $50.

The registration fee is intended to shift the burden off of property taxes to the whole public, as property taxes make up an estimated 59.81% of revenue for Eau Claire’s general fund. Hirsch said they are also currently trying to find ways to shift the cost burden off of their residents with this impact as those funds have fueled the work on city roads and parks.

“Those are used by the whole region, but it’s really just our residents that are paying for those maintenance activities,” she said. “So we’re trying to figure out if there’s any other tools we can use to try to capture some support from visitors to Eau Claire or commuters through Eau Claire that would give some relief to our property owners, and in this case the people who have their cars garaged in Eau Claire.”

In addition to those plans addressing funding challenges, the City of Eau Claire’s goals for 2026 highlight key areas the city will pursue in the future. Hirsch said she believes they can accomplish their initiative to improve constituent services at their walk-in municipalities and website.

“Our goal is to try to make it so that our administrative staff are able to allow constituents to carry out the transactions that they need to regardless of what office they’re sitting in,” she said. “So if you want to buy a pool pass, you could go to the transfer center. Or if you want to pay for your pet license or return a library book, you could go to the transfer center. We want to make it so that it’s really seamless for constituents to take care of business and ask questions of the city in different ways.”

Further discussion on the topic of trash services in Eau Claire is also a goal in 2026. Hirsch said although the city did not come to a conclusion regarding the changing of services due to the complexity of the decision, there was interest from council members to continue the work. The budget includes a one-time funding for a “trash consultant” to help improve the trash collection system.

“On our preliminary findings, which was just a small study, the council said, ‘Yes, we do want to look at this in more depth’,” Hirsch said. “And so in next year’s budget, we’re going to study the possibility of the city taking over trash service delivery. The city would probably still contract out with the trash haulers, but then we would potentially be in charge of collecting.

“But this kind of decision making is very complicated… It’s not something that you can make decisions too easily about or too quickly about.”

A public discussion is scheduled for Nov. 10, followed by deliberation and a vote from the city council on Nov. 11.

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