BROWN COUNTY, WI (WTAQ)- The Wisconsin Institute for Law and Liberty has filed a lawsuit against Brown County, over a new sales tax that they say violates state law.
“It is not being imposed to directly reduce the property tax levy” said Rick Esenberg, President of WILL.
The lawsuit is on behalf of the Brown County Taxpayers Association and Brown County resident Frank Bennett, both listed as Plaintiffs.
Brown County and Secretary of the Wisconsin Department of Revenue is listed as a Defendant.
Back in May, the Brown County Board of Supervisors approved an ordinance for a 0.5% sales tax to fund $147 million dollars in spending on County infrastructure and construction projects to take effect on January 1st, 2018.
Esenberg said the law was created for a reason.
“State Law does not permit that to be done because the legislature wanted to protect both the property tax payers of the county, against the notion that counties would use the sales tax as a way to generate pots of money and spend more.
Based on numbers from the County budget, the tax will raise over $22 million and spend nearly $18 million in 2018 alone.
Wisconsin law states that a tax like that can only be used to reduce the existing property tax levy by the County.
Brown County’s Sales Tax is not being used to reduce property tax levy, but is being used to evade the County’s “levy limit”, and is void and unenforceable. According to WILL.
Attorney for Brown County Andrew Phillips resoponded to the lawsuit, saying it comes down to infrastructure needs and debt service.
“A county like Brown County is faced with looking a infrastructure needs, and borrowing money to pay for those needs, and debt service on that money borrowed is not part of that levy limit.”
Phillps added that the Brown County Tax Payers Association is not looking at the big picture.
“The county could have bonded, and that debt service on those bonds would have been excluded from the levy limit, in order to reduce long term the amount that the property tax payer would have to pay on that tax service.”
Esenberg says it comes down to what the county did do, not what it could have done.
“To say that well, we could have done that but chose not to, but we should act as if we had, it seems to be inconsistant with the law and that is why we are in litigation now.”
In 2006, Wisconsin enacted tax levy limits, stating that political subdivisions, including Counties, can’t increase tax levies in any year by a percentage that exceeds their “valuation factor” based on growth.
The statute states that a county’s levy is fixed and can only grow if the county has a net growth in property values from new construction.
Of the 72 counties in Wisconsin, all but eight have Sales and Use Taxes. WILL states that those taxes in those counties could also be illegal if they were not used to reduce the counties’ property tax lexy.
