Taxation FAQ 8

What process must a municipality follow in order to obtain permission from the electorate to exceed the state-imposed property tax levy limit?

The state law imposing a property tax levy limit on municipalities, Wis. Stat. sec. 66.0602, provides that the levy limit may be exceeded if the governing body approves a resolution to that effect and the resolution is approved by voters at a referendum. The process is set out in sec. 66.0602(4). 

Timing of Referendum. With regard to the 2014 levy, collected in 2015, a municipality may hold a referendum to exceed the levy limits only at the partisan primary in August or the general election. The only practical option, however, is to conduct the referendum at the November general election since DOR staff has concluded that a community must know what it's allowable levy increase is (i.e., the percentage increase in equalized value because of net new construction) before it can conduct a levy limit referendum. Communities won't learn the net new construction number until August 1 at the earliest.

The resolution must specify the proposed amount of increase in the municipal levy beyond the amount that is allowed, and must specify whether the proposed amount of increase is for the next fiscal year only or if it will apply on an ongoing basis.

The law requires that the municipal clerk publish type A, B, C, D, and E notices of the referendum under s. 10.01 (2). Section 5.01 (1) applies in the event of failure to comply with these notice requirements.

The referendum must be held in accordance with Chapters 5 to 12 of the Wisconsin Statutes. The municipality must provide the election officials with all necessary election supplies. The form of the ballot must correspond substantially with the standard form for referendum ballots prescribed by the Governmental Accountability Board under ss. 5.64 (2) and 7.08 (1) (a).

The question placed on the ballot must read as follows: "Under state law, the increase in the levy of the .... (name of political subdivision) for the tax to be imposed for the next fiscal year, . . .  (year), is limited to . . . . percent, which results in a levy of $ . . . Shall the . . . (name of municipaliity) be allowed to exceed this limit and increase the levy for the next fiscal year, . . . (year), by a total of . . .  percent, which results in a levy of $ . . . ?"

Within 14 days after the referendum, the municipal clerk must certify the referendum results to the department of revenue. The levy increase limit otherwise applicable to the municipality is increased in the next fiscal year by the percentage approved by a majority of those voting on the question. If the resolution specifies that the increase is for one year only, the amount of the increase shall be subtracted from the base used to calculate the limit for the 2nd succeeding fiscal year.

A sample resolution for exceeding a municipality's levy limit is set forth below:

 


 

Sample Resolution For Exceeding the State Imposed Levy Limit

Whereas, the State of Wisconsin has imposed limits on town, village, city and county property tax levies for 2014 under Wis. Stat. sec. 66.0602; and

Whereas, Wis. Stat. sec. 66.0602 limits the increase in 2014 to the local property tax levy to no more than the greater of (a) 0% of last year's actual levy or (b) a percentage equal to the percentage change in equalized value due to new construction less improvements removed; which for the Village of ____________ is ________ percent; and

Whereas, the Board of Trustees of the Village of ___________________, _________________County believes it is in the village's best interest to exceed the state levy limit as described above by a greater percentage than _____________ {Note: here insert the option that applies to your village (a) 0% or (b) percentage of new construction less improvements removed, if greater than 0%}; and

Whereas, the Village of _________________________ actual levy in 2013 (collected in 2014) was $________________________ ; and state law would limit the increase to $_________________ for a total allowable 2014 (collected in 2015) village tax levy of $_______________________.}

Now, Therefore the Board of Trustees of the Village of ______________________, ______________________County does hereby resolve and order as follows:

The village board hereby supports an increase in the village tax levy for 2014 (to be collected in 2015) to exceed the state levy limit. {Note: If the governing body intends that the levy increase applies on an ongoing basis, it should insert the following sentence here:  The village board intends that the levy increase be applied on an ongoing basis by including it in the base used to calculate the limit for 2015 as well).

The village board directs that the question of increasing the village tax levy for 2014 (to be collected in 2015) by ____________ percent, which would increase the village levy by $__________________ (insert dollar amount of proposed increase) over the past year's levy, for a village tax levy of $_________________(insert total dollar amount of proposed village tax levy for 2014), shall be submitted to the electors in a referendum at a special referendum election to be held on _______, _____, 2014.

Adopted this __________ day of ________________, 2____.

By the Village Board

_____________________________

Village President

 

Attested by Village Clerk:

________________________________