Many Wisconsin cities and villages have experienced flooding caused by historic rain fall that occurred in areas across the state in August and September, 2018.  Some communities have asked whether unanticipated spending by a municipality to deal with a natural disaster or other emergency is exempt from levy limits and/or the Expenditure Restraint Program budget test.  The short answer is “yes.” Expenditures related to emergencies declared by the Governor under Wis. Stat. sec. 323.10 are addressed in the expenditure restraint and levy limit laws. On August 29, 2018, Governor Walker issued an executive order declaring a state of emergency due to flooding statewide. 

Greg Johnson, Senior Municipal Advisor, Ehlers, provides additional details:

Line 5 on the expenditure restraint worksheet allows a subtraction for unreimbursed expenses related to an emergency declared under sec. 323.10.  The expenditure restraint worksheet compares "budget year to budget year."  If these unreimbursed expenditures are part of the 2019 budget it can be deducted and not count towards expenditure restraint. The 2019 expenditure restraint worksheet will compare the 2018 budget to the 2019 budget to determine if the municipality receives an expenditure restraint payment in 2020.

In terms of the levy limit law, there is an adjustment for unreimbursed expenses related to an emergency declared under sec. 323.10.  This was adjustment "G" on the 2017  levy limit worksheet.  On the 2018 levy limit worksheet (for the 2019 budget), this will allow an adjustment to be claimed to increase the allowable levy for unreimbursed expenses for an emergency declared by the governor included in the budget.  This adjustment is not base building.  It will be subtracted out on line #2 the following year.  The amount of the deduction will be pre-filled by the DOR and should be the same amount as the adjustment claimed the previous year.  

In summary, if unreimbursed expenditures are incurred related to an emergency declared  by the governor, the existing expenditure restraint worksheet and levy limit worksheets have provisions in place for these costs.