971 N.W.2d 491
Wis.2022Background
- Brown County enacted a temporary 0.5% county sales and use tax in 2017 (72 months) and budgeted projected proceeds into its 2018 budget. Revenue was designated to “reduce the property tax levy” by funding nine specific capital projects totaling about $147 million.
- The ordinance barred use of proceeds for operating expenses (except certain lease payments), included a mill-rate freeze tied to the 2018 mill rate, and contained sunset provisions if the mill rate exceeded 2018 or if general obligation debt was issued.
- Brown County incorporated estimated sales-tax receipts (~$22,458,333) into its 2018 budget rather than issuing debt for the projects; the County said, absent the sales tax, it would have borrowed and increased debt service (excluded from levy limits).
- Brown County Taxpayers Association (BCTA) sued, arguing Wis. Stat. § 77.70 requires a dollar-for-dollar reduction of the property tax levy (not merely avoiding an increase or funding new projects). The circuit court granted summary judgment to the County; the court of appeals certified the question to the Wisconsin Supreme Court.
- The Supreme Court (majority) held § 77.70 does not require a dollar-for-dollar offset; counties may use sales-tax proceeds to fund any project that could otherwise be funded by property taxes (money is fungible). The ordinance therefore lawfully “directly reduce[d] the property tax levy” by preventing debt issuance and corresponding higher debt levies.
- A dissent argued the statute’s plain text requires an actual, immediate reduction of the levy (not avoidance of a prospective levy increase), criticized reliance on speculative evidence that debt would have been issued, and emphasized post-2005 levy-limit constraints and required political steps for bonding.
Issues
| Issue | Plaintiff's Argument (BCTA) | Defendant's Argument (Brown County) | Held |
|---|---|---|---|
| Whether § 77.70 requires a dollar-for-dollar reduction of the property tax levy | § 77.70 requires an actual, dollar-for-dollar offset of the levy by sales-tax proceeds | § 77.70 permits use of proceeds to fund any projects that could be paid for with property taxes; the statute states purpose, not mechanism | Held: § 77.70 does not require dollar-for-dollar offsets; counties may use proceeds to fund projects that would otherwise be funded by property-tax revenue, thereby directly reducing the levy in purpose and effect |
| Whether levy limits (§ 66.0602) prevent counties from using sales-tax proceeds to fund new projects (i.e., projects could not lawfully have been funded by property taxes) | Levy limits restrict raising the levy to pay for new projects, so projects funded by sales tax are not projects that "could be paid by property tax" | Debt-service exception to levy limits means projects could lawfully have been funded by borrowing (debt service excluded from levy limit); sales tax avoids issuing that debt | Held: The debt-service exception applies; because the County could have issued debt (and debt levies are excluded from levy limits), funding projects with sales-tax proceeds can directly reduce property-tax burden relative to a debt-funded alternative |
| Persuasive weight of the 1998 Attorney General opinion that allowed budgeting proceeds as offsets to budget items | AG opinion is incorrect or outdated after 2005 levy-limit enactment and cannot justify indirect reductions | AG opinion correctly reasoned money fungibility means proceeds can offset budget items that otherwise would be paid from the property-tax levy | Held: The AG opinion’s analysis is persuasive on the fungibility point and consistent with the statute; the Court adopts the AG’s reasoning (as persuasive analysis, not as binding deference) |
Key Cases Cited
- State ex rel. Kalal v. Circuit Court for Dane County, 271 Wis. 2d 633 (2004) (framework for statutory interpretation: plain meaning, context, avoid absurd results)
- MacLeish v. Boardman & Clark LLP, 386 Wis. 2d 50 (2019) (standard for independent review of summary judgment)
- Jefferson v. Dane County, 394 Wis. 2d 602 (2020) (statutory interpretation reviewed de novo)
- Town of Vernon v. Waukesha County, 102 Wis. 2d 686 (1981) (treating a well-reasoned attorney general opinion as persuasive authority)
- Sturges v. Crowninshield, 17 U.S. (4 Wheat.) 122 (1819) (cited in dissent cautioning against excusing plain statutory words with extrinsic circumstances)