Levy Limits Explanation and Strategies

Under the 2017-2019 state budget a municipality is allowed to increase its levy over the amount it levied in the prior year by the percentage increase in equalized value from net new construction. If no new construction occurred in your community, then your allowable levy increase is zero percent. 

Budgeting and Levy Limits (PDF) 

PowerPoint presentation to accompany the Budgeting and Levy Limits article by Todd Taves, CIPMA Ehlers Senior Municipal Advisor/Principal, in the July, 2019 issue of The Municipality. 

Emergency declarations: levy limits & expenditure restraint (PDF)

By Greg Johnson, Ehlers Senior Municipal Advisor/Vice President 
Published in the December, 2018 issue of The Municipality

Net New Construction 

The Wisconsin Department of Revenue's Equalization Bureau issues the Net New Construction Report. This report provides municipalities and counties with net new construction numbers for levy limits and the Expenditure Restraint Program (ERP). 

Report includes
  • Amount of net new construction - this amount is new construction reduced by any demolition or destruction of buildings, and may include corrections to the prior year
  • Levy limit percent - is a percentage calculated by dividing the current year net new construction by the prior year Equalized Value of a municipality or county
Go to the DOR website here to access the report.  

Levy Limit Worksheet

Levy Limits Worksheet for 2018 available on DOR’s website hereThe due date for electronically filing the levy limit worksheet is December 17, 2018.

Other Key Levy Limit Provisions

Expanding Levy Limits to Include Certain Fee Revenue

The levy limit law requires a municipality to reduce its allowable levy by the estimated amount of fee revenue it collects for providing garbage collection, fire protection, snow plowing, street sweeping, or storm water management if those services were funded in 2013 by the property tax levy. Similarly, a municipality must reduce its allowable levy by any payment in lieu of taxes it receives that is designated to pay for any of the 5 services listed above if the service was funded in 2013 by the levy.

A municipality need not reduce its allowable levy by the amount of fee revenue or PILOTs it receives if the voters approve in a referendum a resolution stating that the community’s levy limit does not need to be reduced when the community converts to paying for the service by a fee.

Carry Forward Allowed Up to a Limit

If a municipality’s allowable levy in the prior year was greater than its actual levy in that year, the governing body may vote to increase its allowable levy in the next succeeding year by the difference between these 2 amounts, as determined by the Department of Revenue , up to a maximum of 1.5% of the actual levy in the prior year. The carry forward resolution may be passed by a majority vote of the governing body if the increase is .5% or less of the prior year’s actual levy. If the increase is between .5% and 1.5% of the prior year’s actual levy the governing body must pass the carry forward resolution by an extraordinary vote. For municipal governing bodies that have less than 5 members, passage must be by a 2-thirds majority vote. If the governing body consists of at least 5 members, then the carry forward resolution must be passed by a 3-fourths majority vote.

Negative Adjustment for Reduced Debt Service on Debt Issued Prior to July 1, 2005

Under the levy limit law, whenever a municipality’s levy for the payment of any GO debt service on debt issued before July 1, 2005 is reduced from the previous year, the municipality must reduce its allowable levy by the same amount.

Key Exceptions from Levy Limits

This is not a complete list. See Wis. Stats. sec. 66.0602(3) for all of the exceptions.

Debt Service Levy Exempt

As in the past, the levy limit does not apply to a municipality’s debt service on general obligation debt authorized on or anytime after July 1, 2005. For general obligation debt authorized before July 1, 2005, if the amount of debt service in the preceding year is less than the amount of debt service needed in the current year, the levy limit is increased by the difference between the 2 amounts. Also, for the first time If a municipality’s levy for the payment of any GO debt service on debt issued before July 1, 2005 is reduced from the previous year, the municipality must reduce its levy limit by the same amount. The negative adjustment requirement described above does not apply to any municipality that does not carry forward unused levy capacity.

Also, amounts levied to cover any revenue shortfall for debt service on a revenue or lease revenue bond are exempt from levy limits.

Increment from a Closed TIF District

When a TIF district terminates, 50% of the increment of the former district may be added to the community’s allowable levy.

Referendum Option

Levies can be increased above the allowable limits if the amount is approved by referendum. The governing body must adopt a resolution specifying the proposed amount of increase in the levy beyond the amount that is allowed and stating whether the proposed increase is for the next levy only or if it will apply on an ongoing basis. The resolution must also specify the purpose of the levy increase.  The resolution must then be submitted to the electors for a vote.

Timing of Referendum

With regard to the 2018 levy, collected in 2019, a municipality may hold a referendum to exceed the levy limits only after it learns what its allowable levy increase is from Department of Revenue. Department of Revenue 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. So, practically speaking, the earliest a municipality can schedule a referendum relating to the 2018 levy is the general election in November.

Sample Resolution

A sample resolution for exceeding the levy limit is posted under Legal FAQs.


If the Department of Revenue determines that a municipality’s levy exceeds the allowable limit, it must reduce that municipality’s shared revenue payment in the following year by an amount equal to the excess levy. However, levies that exceed the allowable levy by less than $500 are not subject to the penalty. Also, Department of Revenue is authorized to waive the penalties if it determines that a penalized excess was caused by a clerical error by Department of Revenue or a municipal clerk in preparing or delivering the tax roll.