City council indefinitely delays action on transportation utility ordinance
Decision follows judge’s ruling against Wisconsin town
By Jalen Maki
Tomahawk Leader Editor
TOMAHAWK – The City of Tomahawk Common Council, on Tuesday, June 7, voted to indefinitely delay action on its proposed transportation utility ordinance following a judge’s ruling in a lawsuit filed against a Wisconsin town that had implemented a similar utility three years ago.
Citing the ruling, which deemed the Town of Buchanan’s transportation utility to be in violation of levy limits imposed by state law, alderman Mike Loka suggested the council postpone taking action on the ordinance while the lawsuit plays out. The Town of Buchanan is expected to appeal the ruling.
The council made the decision prior to a public hearing regarding the transportation utility ordinance held at the SARA Park Banquet Hall. The hearing was still held, for which community members, as well as State Senator Mary Felzkowski (R-Tomahawk) and State Representative Calvin Callahan (R-Tomahawk), were in attendance.
For nearly a year, the city has weighed putting a transportation utility in place as a means of generating infrastructure revenue. Other Wisconsin communities, including the cities of Wisconsin Rapids and Neenah, have implemented them in years past, while municipalities around the state have considered following suit as state-imposed levy limits have impacted infrastructure budgets.
All signs seemed to point to the impending approval of the ordinance prior to the council’s decision to delay action. The council voted unanimously to introduce the ordinance in April. In March, the ordinance was reviewed by the city’s Finance Committee before being forwarded to the council.
Town of Buchanan lawsuit
Outagamie County Circuit Court Judge Mark McGinnis ruled on Tuesday, June 7 that the Town of Buchanan’s transportation utility fee, implemented in 2019, violates levy limits imposed on counties and municipalities in state law.
The Town of Buchanan collected $850,000.00 from the fee in 2020, in addition to its $2.4 million property tax levy limit. Homeowners pay just over $300.00 each year, while businesses pay anywhere from a few hundred dollars to $8,000.00 annually, depending on the number of trips generated from the property.
Wisconsin Property Taxpayers Inc. (WPT) and conservative law firm The Wisconsin Institute for Law and Liberty (WILL) sued the town in Sept. 2021, arguing that the fee is “really an unlawful tax.”
“Nothing in state law authorizes municipalities to charge a road-use fee; rather, road costs are financed primarily through property taxes, which are subject to strict levy limits and uniformity requirements,” a release from WILL stated. “The Town of Buchanan appears to be using this fee to circumvent those limits on property taxes.”
“Wisconsin municipalities cannot adopt new fees to circumvent levy limits,” WILL Deputy Counsel Luke Berg said in a statement released after the ruling. “The Court’s decision makes this clear for the Town of Buchanan and all Wisconsin communities considering new fees.”
“Levy limits exist for a reason,” said WPT Government and Member Relations Director John Jacobson, calling the ruling “a victory for those families and small businesses in the Town of Buchanan whose property tax dollars already fund their local community.”
A statement from Town of Buchanan officials said an appeal of the ruling was planned.
“The court said that there were compelling arguments on both sides but that it believed any amount of revenue from the transportation utility fee may count against the town’s levy limit unless that revenue was directed toward the repayment of debt,” the statement said. “The court indicated that it had limited experience in this case and fully expected that the parties would pursue an appeal as this is a case of first impression in the state of Wisconsin and there is no precedential law at this point. We knew the outcome was uncertain and the parties had discussed an appeal regardless of judge’s ruling.”
Legislative Republicans this year have introduced bills that would force Wisconsin municipalities that impose a transportation utility fee to offset the amount generated by lowering the amount they can collect from property taxes.