In June of 2013, the state legislature enacted a statute generally prohibiting municipal residency requirements, with a few exceptions. In July of 2013, the City of Milwaukee Common Council voted to enforce the City’s residency requirements, despite the new state law, because the Wisconsin Constitution gives cities and villages home rule over local affairs and residency is primarily a matter of local concern. Shortly thereafter, the Milwaukee Police Association, sued the City, claiming the state law preempted the City residency requirement. The circuit court held that the state law trumped the City residency requirement.
The City appealed. Although the new statute (§ 66.0502) stated it was a matter of statewide concern, saying so and actually being so are two different things. The appeals court analyzed the effect of the new law on municipalities, and analyzed the Constitutional grant of home rule over local affairs, and held that the statute violated both the uniformity and the statewide concern provisions of Article art. XI, § 3.(1), of the state Constitution. You can read the full text of the appellate decision here.
It is quite possible the police union, et al, will appeal to the Supreme Court, so this decision may not be the final word. Also, town officials should keep in mind that home rule is only granted to cities and villages by the Constitution, not to towns. So the decision does not change the residency prohibitions for towns.