What process must a municipality follow 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. In even numbered years, a levy limit referendum may be held at the spring primary or election or partisan primary or election. In any odd-numbered year, a municipality may call a special referendum on the same dates as when a school board may call for a referendum.  Current statutes limit school board referenda to the next regularly scheduled spring primary or election or partisan primary or general election following the adoption of a resolution, except that a referendum may not be held sooner than 70 days after the filing of the resolution. [s. 121.91 (3), Stats.]

Wording of the Resolution.  The resolution must specify: 1)  the proposed amount of increase in the municipal levy beyond the amount that is allowed (a municipality may use its best estimate of its valuation factor, i.e., its net new construction number, which is its allowable levy increase);  2)  the purpose for which the increase will be used, and 3)  whether the proposed amount of increase is for the next fiscal year only or if it will apply for a certain number of years or on an ongoing basis.

Notices.  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 under ss. 5.64 (2) and 7.08 (1) (a).

Ballot Question.  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 ....% (based on actual data or the political subdivision's best estimate), which results in a levy of $.... Shall the .... (name of political subdivision) be allowed to exceed this limit and increase the levy for the next fiscal year, .... (year), for .... (purpose for which the increase will be used), by a total of ....% (based on actual data or the political subdivision's best estimate), which results in a levy of $....?".

If the increase is for the next fiscal year only, the question shall include the percentage increase in the levy from the previous year's levy and, if the increase is on an ongoing basis, the question shall include the amount of the increase for each fiscal year for which the increase applies.

Note:  If 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. Also, if the intent is for the levy limit increase to be ongoing, DOR recommends the following approach:  The ballot question provides space to list the actual fiscal years to which the tax levy increase would apply.  This is where municipalities and counties may state "ongoing" if it will be ongoing.  See the example below:

"Under state law, the increase in the levy of the Village of Bucky for the tax to be imposed for the next fiscal year, 2021, is limited to 2%, which results in a levy of $150,000.  Shall the Village of Bucky be allowed to exceed this limit and increase the levy for the next fiscal year, 2021, and on an ongoing basis, for the purpose of additional police protection services, by a total of 25%, which results in a levy of $187,500?"

Notifying DOR. 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 under Wis. Stat. sec. 66.0602; and

Whereas, Wis. Stat. sec. 66.0602 limits the increase in 2020 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 (estimated) to be ________ 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%} for the purpose of ____________________ (e.g., accomplishing critical street maintenance projects, maintaining or expanding public safety services, expanded library services, etc.); and

Whereas, the Village of _________________________ actual levy in 2019 (collected in 2020) was $________________________ ; and state law would limit the increase to $_________________ for a total allowable 2020 (collected in 2021) 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 2020 (to be collected in 2021) 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 2021 as well).  The purpose for which the increased levy will be used is _______________  (e.g. accomplishing critical street maintenance projects, maintaining or expanding public safety services, expanded library services, etc.)

The village board directs that the question of increasing the village tax levy for 2020 (to be collected in 2021) 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 2020), the increase to be used for _______________ (e.g., accomplishing critical street maintenance projects, maintaining or expanding public safety services, expanded library services, etc.) shall be submitted to the electors in a referendum at a special referendum election to be held on _______, _____, 2020.

Adopted this __________ day of ________________, 2____.

By the Village Board

_____________________________

Village President

 

Attested by Village Clerk:

_______________