Brown County v. Brown County Taxpayers Association ( 2022 )

2022 WI 13SUPREME COURT OF WISCONSIN
CASE NO.: 2020AP940
COMPLETE TITLE: Brown County,
Plaintiff-Respondent,
v.
Brown County Taxpayers Association and Frank
Bennett,
Defendants-Third-Party
Plaintiffs-Appellants,
v.
Peter Barca, Secretary, Wisconsin Department of
Revenue,
Third-Party Defendant-Respondent.
ON CERTIFICATION FROM THE COURT OF APPEALS
OPINION FILED: March 4, 2022
SUBMITTED ON BRIEFS:
ORAL ARGUMENT: November 16, 2021
SOURCE OF APPEAL:
COURT: Circuit
COUNTY: Brown
JUDGE: John Zakowski
JUSTICES:
ANN WALSH BRADLEY, J., delivered the majority opinion of the
Court, in which ROGGENSACK, DALLET, HAGEDORN, and KAROFSKY, JJ.,
joined. REBECCA GRASSL BRADLEY, J., filed a dissenting opinion,
in which ZIEGLER, C.J., joined.
NOT PARTICIPATING:
ATTORNEYS:
For the defendants-third-party-plaintiffs-appellants, there
were briefs filed by Richard M. Esenberg, Anthony F. LoCoco, Lucas
T. Vebber and Wisconsin Institute of Law & Liberty, Milwaukee.
There was an oral argument by Anthony F. LoCoco.
For the plaintiff-respondent, there was a brief filed by
Andrew T. Phillips, Steven L. Nelson, Douglas M. Raines,
Christopher E. Avallone and von BRIESEN & ROPER, S.C., Milwaukee.
There was oral argument by Andrew T. Phillips.
There was an amicus brief filed on behalf of the Wisconsin
Counties Association by Joseph L. Olson and Michael Best &
Friedrich LLP, Milwaukee.
2
2022 WI 13NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2020AP940
(L.C. No. 2018CV640)
STATE OF WISCONSIN : IN SUPREME COURT
Brown County,
Plaintiff-Respondent,
v.
Brown County Taxpayers Association and Frank
Bennett, FILED
Defendants-Third-Party
Plaintiffs-Appellants, MAR 4, 2022
v. Sheila T. Reiff
Clerk of Supreme Court
Peter Barca, Secretary, Wisconsin Department of
Revenue,
Third-Party Defendant-Respondent.
ANN WALSH BRADLEY, J., delivered the majority opinion of the Court,
in which ROGGENSACK, DALLET, HAGEDORN, and KAROFSKY, JJ., joined.
REBECCA GRASSL BRADLEY, J., filed a dissenting opinion, in which
ZIEGLER, C.J., joined.
APPEAL from an order of the Circuit Court for Brown County,
John P. Zakowski, Judge. Affirmed.
No. 2020AP940
¶1 ANN WALSH BRADLEY, J. This case is before the court on
certification by the court of appeals pursuant to Wis. Stat.
§ (Rule) 809.61 (2017-18) after the circuit court granted summary
judgment to Brown County.1 The circuit court determined that the
County's sales and use tax ordinance was lawful.
¶2 The court of appeals certified the following issue
regarding how counties may utilize the proceeds of enacted sales
and use taxes:
Does the sales and use tax Brown County enacted in 2017
and implemented as part of its 2018 budget process
"directly reduce the property tax levy," as required by
Wis. Stat. § 77.70 (2015-16),[2] if the proceeds are
designated to fund new capital projects that
collectively would otherwise exceed the levy limits
established by Wis. Stat. § 66.0602, but the County
could otherwise fund the projects by borrowing?
¶3 The appellant, Brown County Taxpayers Association
(BCTA), contends that Brown County's sales and use tax is invalid
because it does not dollar-for-dollar directly reduce the County's
property tax levy in violation of Wis. Stat. § 77.70. Rather,
BCTA contends that the sales and use tax is impermissibly used to
fund new capital projects.
¶4 In contrast, the County asserts that its sales and use
tax complies with Wis. Stat. § 77.70. It argues, in accordance
1 This case arose in the circuit court for Brown County, John
P. Zakowski, Judge.
2 All subsequent references to the Wisconsin Statutes are to
the 2015-16 version unless otherwise indicated. This is the
version of the statutes in effect at the time the sales and use
tax at issue was passed. Wisconsin Stat. § 77.70 was amended in
2017, but these amendments do not impact our analysis.
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No. 2020AP940
with a longstanding Attorney General's opinion, that pursuant to
§ 77.70 a sales and use tax may be used by a county to fund any
project that could otherwise be paid for with property taxes.
¶5 We conclude that Brown County's sales and use tax
ordinance is consistent with Wis. Stat. § 77.70. Section 77.70
does not require a dollar-for-dollar offset to the property tax
levy. Instead, it authorizes counties to impose a sales and use
tax for the specific purpose of directly reducing the property tax
levy, while leaving the means to accomplish that purpose up to the
county. Because the County's ordinance does in fact directly
reduce the property tax levy by funding projects that would
otherwise have been paid for through additional debt obligations,
we determine that the ordinance is permissible.
¶6 Accordingly, we affirm the order of the circuit court.
I
¶7 On May 17, 2017, the Brown County Board of Supervisors
enacted an ordinance relating to a temporary sales and use tax
within the County. The ordinance provided for a 0.5 percent sales
and use tax that would be in effect for a period of 72 months.
¶8 Within the ordinance itself is a specification regarding
how the money collected from the sales and use tax is to be used.
Namely, the ordinance provides that revenue from the tax "[s]hall
not be utilized to fund any operating expenses other than lease
payments associated with" specified capital projects. It further
indicates that the sales and use tax revenue "[s]hall be utilized
only to reduce the property tax levy by funding the below listed
specific capital projects, as well as funding said specific capital
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No. 2020AP940
projects' associated costs as deemed appropriate by Brown County
administration."
¶9 The expenses for specific capital projects intended to
be funded from the sales and use tax revenue include: (1) $15
million for the Expo Hall project; (2) $60 million for
infrastructure, roads, and facilities projects; (3) $20 million
for jail and mental health projects; (4) $20 million for a library
project; (5) $10 million for maintenance at the Resch Expo Center;
(6) $10 million for medical examiner and public safety projects;
(7) $1 million for a museum project; (8) $6 million for parks and
fairgrounds; and (9) $5 million for a STEM research center project.
¶10 Totaling $147 million, these expenses were determined by
members of the County Board to fund "necessary projects" for the
"long-term viability of the County." Without the sales and use
tax, the County stated that these capital improvements would have
been funded through new borrowing and the accompanying issuance of
debt obligations.
¶11 Additionally, the ordinance contained a mill rate3
freeze. This provision states: "While this temporary sales and
use tax Ordinance is in effect, the Brown County Mill Rate shall
not exceed the 2018 Brown County Mill Rate." It further provides
that if the mill rate does exceed the 2018 rate during the life of
the ordinance, that the sales and use tax "shall sunset on December
3 The mill rate "is a figure representing the amount per
$1,000 of the assessed value of property, which is used to
calculate the amount of property tax." Milewski v. Town of Dover,
2017 WI 79, ¶47 n.18, 377 Wis. 2d 38, 899 N.W.2d 303 (quoted source
omitted).
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No. 2020AP940
31 of the year the Brown County Mill Rate exceeds the 2018 Brown
County Mill Rate." A sunset provision is also included in the
ordinance in the event the County issues any general obligation
debt, excluding refunding bonds.
¶12 Brown County relied on the sales and use tax revenue in
crafting its 2018 budget. For that year, the County's finance
director estimated the sales and use tax proceeds to be
$22,458,333. This amount was incorporated in the 2018 budget,
which was adopted by the County Board and signed by the County
Executive.
¶13 Shortly after the budget was enacted, BCTA filed suit
against the County, arguing that the sales and use tax ordinance
violates Wis. Stat. § 77.70. Specifically, BCTA argued that the
ordinance does not "directly reduc[e] the property tax levy" as
§ 77.70 mandates. It sought a declaratory judgment that the
ordinance is invalid and an accompanying injunction against the
ordinance's enforcement. BCTA's lawsuit was ultimately dismissed
without prejudice due to BCTA's failure to comply with statutory
notice of claim procedures.4
4 The notice of claim statute contains requirements for
providing notice to a governmental subdivision prior to filing
suit against that subdivision. See Wis. Stat. § 893.80. Such
requirements allow governmental entities to investigate and
evaluate potential claims and afford them the opportunity to
compromise and settle a claim, thereby avoiding costly and time-
consuming litigation. Yacht Club at Sister Bay Condo. Ass'n, Inc.
v. Village of Sister Bay, 2019 WI 4, ¶20, 385 Wis. 2d 158, 922
N.W.2d 95.
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No. 2020AP940
¶14 After dismissal of its lawsuit, BCTA served a notice of
claim on the County. The County disallowed the claim and
subsequently filed this lawsuit in the circuit court, seeking a
declaratory judgment as to the validity of the sales and use tax
ordinance. BCTA filed a counterclaim, asserting that the ordinance
is void as a matter of law.
¶15 Both parties moved for summary judgment. BCTA renewed
its argument that the ordinance does not "directly reduc[e] the
property tax levy" as Wis. Stat. § 77.70 requires and that such
direct reduction can only be accomplished by a dollar-for-dollar
offset. In contrast, the County asserted that the ordinance is
valid, suggesting that § 77.70 is an enabling statute that allows
a county to impose a sales and use tax but is silent on how sales
and use tax proceeds are to be used.
¶16 The circuit court granted Brown County's motion for
summary judgment and denied that of BCTA. It concluded that a
dollar-for-dollar reduction of the property tax levy with sales
and use tax revenue "is not the solely lawful operation required
by the plain language of the statute." Further, it determined
that "[i]f Wisconsin Statute section 77.70 were to require a
dollar-for-dollar reduction of a county's property tax levy, then
the Wisconsin Legislature would have said so in the body of the
statute, and it would have spelled out the process for Wisconsin
counties to follow."
¶17 BCTA moved for reconsideration, which the circuit court
denied. Subsequently, BCTA appealed, and the court of appeals
certified the appeal to this court.
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No. 2020AP940
II
¶18 We are called upon to review the circuit court's
determination on the parties' cross-motions for summary judgment.
This court reviews a summary judgment decision independently of
the decisions rendered by the circuit court and court of appeals,
applying the same methodology as the circuit court. MacLeish v.
Boardman & Clark LLP, 2019 WI 31, ¶22, 386 Wis. 2d 50, 924
N.W.2d 799. Summary judgment is appropriate where there is no
genuine issue as to any material fact and the moving party is
entitled to judgment as a matter of law. Id.¶19 In our review, we interpret several statutes. Statutory
interpretation presents a question of law we likewise review
independently of the determinations of the circuit court and court
of appeals. Sw. Airlines Co. v. DOR, 2021 WI 54, ¶16, 397
Wis. 2d 431, 960 N.W.2d 384.
III
¶20 We begin by setting forth necessary background regarding
the statutes at issue and county property tax levies.
Subsequently, we present and analyze the parties' arguments
concerning the validity of the Brown County ordinance at issue.
A
¶21 All counties in Wisconsin, including Brown County, are
required by statute to adopt an annual budget. See Wis. Stat.
§§ 59.60, 65.90. As part of the budgeting process, Brown County
is required to "list all existing indebtedness and all anticipated
revenue from all sources during the ensuing year and shall likewise
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No. 2020AP940
list all proposed appropriations for each department, activity and
reserve account during the said ensuing year." § 65.90(2).
¶22 From this data, a county calculates its property tax
levy. To do so, it adds the operating levy (the revenue necessary
to fund county operations) with the debt levy (the amount necessary
to pay debt service on county borrowing). The types of
expenditures that make up the operating levy include, among other
things, necessary expenses for the operation of the county library
system, the county jail, and facility management.
¶23 How the property tax levy is set is governed by Wis.
Stat. § 66.0602, which was enacted in 2005. See 2005 Wis. Act 25,
§ 1251c. Section 66.0602, among other provisions, includes a limit
on the amount a governmental subdivision may increase its property
tax levy in a given year.
¶24 Pursuant to Wis. Stat. § 66.0602(2), and subject to
certain exceptions, a county cannot increase its property tax levy
in any year "by a percentage that exceeds the [county's] valuation
factor."5 The "valuation factor" is defined as "a percentage equal
5 In full, Wis. Stat. § 66.0602(2) provides:
Levy limit. Except as provided in subs. (3), (4), and
(5), no political subdivision may increase its levy in
any year by a percentage that exceeds the political
subdivision's valuation factor. The base amount in any
year, to which the limit under this section applies,
shall be the actual levy for the immediately preceding
year. In determining its levy in any year, a city,
village, or town shall subtract any tax increment that
is calculated under s. 59.57(3)(a), 60.85(1)(L), or
66.1105(2)(i). The base amount in any year, to which
the limit under this section applies, may not include
any amount to which sub. (3)(e)8. applies.
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No. 2020AP940
to the greater of either the percentage change in the political
subdivision's January 1 equalized value due to new construction
less improvements removed between the previous year and the
current" or zero percent. § 66.0602(1)(d). In other words, the
amount a county may raise its property tax levy in a given year is
tied to the percentage change in net new construction in the
county. See Steven Deller & Judith I. Stallmann, Tax and
Expenditure Limitations and Economic Growth, 90 Marq. L. Rev. 497,
519 (2007).
¶25 As stated, there are several statutory exceptions to the
levy limit. Relevant here is the exception set forth in Wis. Stat.
§ 66.0602(3)(d) regarding debt service. Pursuant to
§ 66.0602(3)(d)2.:
The limit otherwise applicable under this section does
not apply to amounts levied by a political subdivision
for the payment of any general obligation debt service,
including debt service on debt issued or reissued to
fund or refund outstanding obligations of the political
subdivision, interest on outstanding obligations of the
political subdivision, or the payment of related
issuance costs or redemption premiums, authorized on or
after July 1, 2005, and secured by the full faith and
credit of the political subdivision.
Stated differently, the levy limit applies to the operating levy,
but not the debt levy. An additional exception to the levy limit
applies if a political subdivision's governing body adopts a
resolution to raise the levy beyond the statutory limit that is
then approved by the electorate in a referendum. § 66.0602(4).
¶26 Levy limits are enforced by the Department of Revenue.
Wis. Stat. § 66.0602(6). To aid the Department in enforcing the
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No. 2020AP940
limits, it uses a Levy Limit Worksheet to ensure that a county has
complied with the dictates of § 66.0602. Echoing the statutory
exceptions, the Levy Limit Worksheet excludes all sums paid for
debt service from the levy limit calculation. In an affidavit
filed in the circuit court, the County's finance director described
the consequence of this: "In other words, if a county borrows
money for a capital project, the principal and interest payments
that the county pays on the loan are excluded from the definition
of revenues subject to the levy limit."
B
¶27 We move next to address the parties' competing
interpretations of Wis. Stat. § 77.70, which provides in relevant
part: "The county sales and use taxes may be imposed only for the
purpose of directly reducing the property tax levy . . . ."
¶28 When interpreting statutes, we begin with the language
of the statute. State ex rel. Kalal v. Cir. Ct. for Dane Cnty.,
2004 WI 58, ¶45, 271 Wis. 2d 633, 681 N.W.2d 110. If the meaning
of the statute is plain, we need not inquire further. Id.¶29 "Statutory language is given its common, ordinary, and
accepted meaning, except that technical or specially-defined words
or phrases are given their technical or special definitional
meaning." Id. We also interpret statutory language "in the
context in which it is used; not in isolation but as part of a
whole; in relation to the language of surrounding or closely-
related statutes; and reasonably, to avoid absurd or unreasonable
results." Id., ¶46.
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No. 2020AP940
¶30 BCTA contends that there is only one way to occasion a
"direct" reduction in the property tax levy——a dollar-for-dollar
offset of the levy corresponding to the revenue collected through
the sales and use tax. Preventing a hypothetical increase in the
property tax levy, BCTA argues, is not the same as "directly
reducing" it as the statute requires.
¶31 On the other hand, Brown County contends that the
language of Wis. Stat. § 77.70 allows for sales and use taxes to
fund any project that could otherwise be funded with property
taxes.6 In the County's view, the sales and use tax at issue was
enacted to avoid raising the property tax levy to pay for the
capital projects identified in the ordinance. Accordingly, the
County argues that it was enacted "for the purpose of" funding
projects that otherwise would have been funded through property
tax revenue. It asserts that, without the sales and use tax, the
subject capital projects would have been funded by borrowing money,
thereby increasing the County's debt burden, which in turn would
be passed on to taxpayers via the property tax levy.
¶32 For further support, the County points the court to an
attorney general's opinion on the proper interpretation of Wis.
Stat. § 77.70. Our precedent indicates that a well-reasoned
6 Peter Barca, the secretary of the Department of Revenue, is
also party to this case, but he does not take a position on the
issue of whether Brown County's sales and use tax complies with
state law. Instead, Secretary Barca's brief focuses only on the
remedy in the event the tax is unlawful. Because we conclude that
the sales and use tax is lawful, we need not address this remedy
issue.
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No. 2020AP940
attorney general's opinion is of at least some persuasive value
when a court later addresses the meaning of the same statute. Town
of Vernon v. Waukesha County, 102 Wis. 2d 686, 692, 307 N.W.2d 227(1981).
¶33 In 1998, the attorney general opined on the same issue
we face in this case. See Opinion of Wis. Att'y Gen. to Dennis E.
Kenealy, Ozaukee County Corp. Counsel, OAG 1-98 (May 5, 1998).
The attorney general was asked, "in effect, how funds received
from a county sales and use tax imposed under section 77.70,
Stats., may be budgeted by the county board." Id. at 1. He
concluded that "such funds may be budgeted to reduce the amount of
the overall countywide property tax levy or to defray the cost of
any item which can be funded by a countywide property tax." Id.
¶34 The attorney general's analysis began with a brief
history of Wis. Stat. § 77.70: "Prior to 1985, counties had the
authority to impose sales and use taxes, but the Wisconsin
Department of Revenue was required to distribute all of the net
proceeds of such taxes to towns, cities and villages within the
county imposing the tax." Id. Presumably because they could not
keep the revenue collected, few, if any, counties imposed a sales
and use tax. Id. In 1985, § 77.70 was amended "to allow county
governments to retain the net proceeds of the sales and use tax,"
as long as those proceeds are used for the purpose of directly
reducing the property tax levy. Id. at 2 (citing 1985 Wis. Act
41).
¶35 Next, the attorney general discussed how after this
amendment, counties utilized one of two ways to demonstrate direct
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No. 2020AP940
property tax reductions. Id. at 2. Some counties illustrated a
property tax reduction "by showing the receipt of sales and use
tax revenues on individual property tax bills." Id. Other
counties "budgeted the net proceeds of the sales and use tax as a
revenue source used to offset the cost of individual items
contained in the county budget." Id.
¶36 In comparing these approaches, the attorney general
noted the fundamental fungibility of money, explaining:
The same amount of countywide property tax reduction
occurs whether the county board chooses to budget
revenues from net proceeds of the sales and use tax as
a reduction in the overall countywide property tax levy
or as an offset against a portion of the costs of
specific items which can be funded by the countywide
property tax.
Id. Accordingly, in the attorney general's view, "Counties may
therefore also budget the net proceeds of the sales and use tax as
an offset against the cost of any individual budgetary item which
can be funded by the countywide property tax." Id. at 3.
¶37 We find the County's reading of the statute, echoed by
the attorney general's opinion, to be the correct one. Nothing in
Wis. Stat. § 77.70 requires the dollar-for-dollar offset that BCTA
seeks.
¶38 On its face, Wis. Stat. § 77.70 requires that a sales
and use tax be enacted for the "purpose of directly reducing the
property tax levy." "Purpose" is defined as "the reason why
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No. 2020AP940
something is done or used" or "the aim or intention of something."7
Taking this common definition into account, § 77.70 broadly sets
out what the goal or aim of a county sales and use tax must be,
i.e. direct reduction of the property tax levy.
¶39 The statute does not, however, contain any mechanism by
which a county must accomplish such a reduction. Its enabling
language allows a county to impose a sales and use tax for the
purpose of directly reducing the property tax levy, but it does
not mandate that the county use or spend revenue generated by the
tax on a dollar-for-dollar offset.
¶40 As the attorney general concluded in 1998, money is
fungible. Due to this essential fungibility, there is not one
sole way to attain the "purpose" of reducing the property tax levy.
Indeed, an identical reduction in the property tax levy can be
accomplished from a dollar-for-dollar offset as can be attained by
budgeting specific items, which otherwise would have been paid for
from property tax revenue, to be funded with a sales and use tax.
Either way, the purpose of directly reducing the property tax levy
is accomplished. Thus, Wis. Stat. § 77.70 allows revenue generated
from county sales and use tax to be used to fund any project that
could otherwise have been paid for from property tax revenue.
7 Purpose, Merriam-Webster Online Dictionary,
https://www.merriam-webster.com/dictionary/purpose (last visited
Feb. 14, 2022); see also State v. Sample, 215 Wis. 2d 487, 499,
573 N.W.2d 187 (1998) ("For purposes of statutory interpretation
or construction, the common and approved usage of words may be
established by consulting dictionary definitions.").
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No. 2020AP940
¶41 Contrary to BCTA's argument, such a conclusion does not
read the word "directly" out of the statute. "Direct" means "to
cause to turn, move, or point undeviatingly or to follow a straight
course."8 It is just as straightforward for a specifically-funded
project to cause a reduction in the property tax levy as it is for
an offset to do the same. Stated differently, using the proceeds
from a sales and use tax to fund a specific project that would
otherwise have been funded with property tax revenue accomplishes
a "direct reduction" of the property tax levy the same way a
dollar-for-dollar offset would.
¶42 A comparison with surrounding statutes is additionally
instructive in reaching our conclusion. See Kalal, 271
Wis. 2d 633, ¶46. Specifically, the legislature enacted two
nearby statutes for the purpose of funding sports stadiums and in
those statutes it explicitly directed the stadium districts on how
to utilize proceeds of sales and use taxes. Wisconsin Stat.
§ 77.705, passed in 1995 to fund construction of Miller Park (now
American Family Field),9 authorizes a "local professional baseball
park district" to "impose a sales and a use tax . . . at a rate of
no more than 0.1 percent of the sales price or purchase price."
Similarly, Wis. Stat. § 77.706, enacted in 1999 for improvements
to Lambeau Field, authorizes a "local professional football
8Direct, Merriam-Webster Online Dictionary,
https://www.merriam-webster.com/dictionary/direct (last visited
Feb. 14, 2022).
9For further background on Wis. Stat. § 77.705, see
Libertarian Party of Wisconsin v. State, 199 Wis. 2d 790, 796-800,
546 N.W.2d 424 (1996).
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No. 2020AP940
stadium district" to "impose a sales and a use tax . . . at a rate
of 0.5 percent of the sales price or purchase price."
¶43 Unlike Wis. Stat. § 77.70, both of these statutes
explicitly provide that the proceeds from the sales and use taxes
are to be spent to pay down the stadium districts' debt in a
dollar-for-dollar manner. Both Wis. Stat. §§ 77.705 and 77.706
contain identical language indicating that any money received
"shall be used exclusively to retire the district's debt."
§§ 77.705, 77.706.
¶44 In contrast, Wis. Stat. § 77.70, while setting forth
that the "purpose" of the sales and use tax must be to "directly
reduc[e] the property tax levy," is silent on how this is to be
accomplished. If the legislature wanted to mandate a dollar-for-
dollar offset of property taxes, it could have done so in a manner
similar to the language of Wis. Stat. §§ 77.705 and 77.706. See
also Wis. Stat. §§ 229.685(1) and 229.825 (further restricting how
stadium tax revenues must be spent); Southport Commons, LLC v.
DOT, 2021 WI 52, ¶32, 397 Wis. 2d 362, 960 N.W.2d 17 ("The
legislature is presumed to carefully and precisely choose
statutory language to express a desired meaning." (internal
quotation omitted)).
¶45 Our interpretation is also supported by the analysis
employed by the attorney general in the 1998 opinion on Wis. Stat.
§ 77.70. See OAG 1-98. The attorney general correctly based his
opinion on the essential fungibility of money and the principle
that the same reduction in the property tax levy occurs regardless
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No. 2020AP940
of whether the proceeds are budgeted as an offset on the bills of
taxpayers or used to fund a specific item.
¶46 Although the parties in this case argue over the proper
weight to give an attorney general's opinion in our analysis, we
need not and do not resolve that question because the attorney
general's analysis was substantively correct. In other words, we
do not rely on any presumption or deference to the opinion of the
attorney general,10 but conclude that the analysis itself is
persuasive and faithful to our principles of statutory
interpretation.
¶47 We therefore determine that Wis. Stat. § 77.70 does not
require a dollar-for-dollar reduction in the property tax levy.
Instead, it authorizes counties to impose a sales and use tax for
the specific purpose of directly reducing the property tax levy,
while leaving the means to accomplish that purpose up to the
county.
¶48 BCTA asserts next that Wis. Stat. § 66.0602, which was
passed subsequent to the issuance of the 1998 attorney general's
opinion, changes this result. It focuses on the levy limit
contained in that statute, which provides in relevant part:
"Except as provided in subs. (3), (4), and (5), no political
subdivision may increase its levy in any year by a percentage that
exceeds the political subdivision's valuation factor."
10See Staples for Staples v. Glienke, 142 Wis. 2d 19, 28, 416
N.W.2d 920 (Ct. App. 1987) (treating an attorney general's opinion
"as presumptively correct, when the legislature later amends the
statute but makes no changes in response to the attorney general's
opinion").
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No. 2020AP940
§ 66.0602(2). Due to this levy limit, BCTA argues that the County
could not have raised its property taxes by the amount needed to
cover the capital expenditures intended to be funded by the sales
and use tax.
¶49 Putting a finer point on it, BCTA argues that Wis. Stat.
§ 66.0602(2) indicates that the County's property tax levy may be
increased only by a percentage that does not exceed the County's
valuation factor. By funding new projects to the tune of
$147,000,000 over six years, BCTA asserts that the County vastly
exceeds the statute's restriction on property tax levy increases.
Stated otherwise, the projects could not have been paid for from
property tax revenue because property taxes could not have been
legally raised to such a level. For example, the County sought to
use almost $18,000,000 collected from sales and use tax to fund
new capital projects in 2018. However, the County's 2017 property
tax levy was $86,661,972, and its 2018 levy limit was $87,584,261,
a difference of just under one million dollars.11
¶50 We disagree with BCTA's argument on this point. BCTA
focuses on Wis. Stat. § 66.0602(2) at the expense of the exception
to subsec. (2) noted in § 66.0602(3)(d). Pursuant to subdivision
(3)(d)2., "The limit otherwise applicable under this section does
not apply to amounts levied by a political subdivision for the
payment of any general obligation debt service." In other words,
11 The record contains a reference to a higher number,
$91,115,007, as the allowable 2018 debt levy limit. We use here
the lower number provided in the 2017 Levy Limit Worksheet provided
to the Department of Revenue, but the number chosen does not affect
the analysis.
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No. 2020AP940
any debt levy is not taken into account in determining the levy
limit under subsec. (2).
¶51 Here, the record reflects that the County would have, in
the absence of the sales and use tax, issued general obligation
debt to pay for the projects identified in the ordinance at issue.
Payments on such debt service are exempt from the levy limits,
meaning that contrary to BCTA's argument the property tax levy
could have been raised to pay for the subject capital projects.
¶52 Having determined that Wis. Stat. § 77.70 describes what
must be done with county sales and use tax proceeds but not how to
accomplish that, we address next whether the Brown County sales
and use tax ordinance at issue does in fact "directly reduc[e] the
property tax levy." In examining the record, it is apparent that
the answer is yes.
¶53 The County's finance director detailed the effect of the
sales and use tax on property taxes vis-à-vis borrowing that would
have taken place absent the implementation of the sales and use
tax. Specifically, the finance director averred that the subject
projects would have otherwise been funded through the issuance of
additional debt obligations. Such debt obligations would cause
County property taxpayers to pay extra costs associated with the
borrowing, including over $13 million in interest over the lifetime
of the ordinance and $47 million in total interest, assuming a 20-
year term on the loan and thus a 20-year life of the debt service.
¶54 Absent the sales and use tax, property taxes would have
to increase to cover the increased debt burden (and as indicated
above, debt service is excluded from the levy limit). The
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operation of this principle can be illustrated with a micro-level
example. In this case, Brown County's finance director stated
that if the sales and use tax remains in place, property taxes on
the median home value in the County would decrease by $140.20
between 2018 and 2023. If there were no sales and use tax, and
the County instead borrowed money for the subject projects, the
issuance of general debt obligations would cause taxes on that
same median property to increase by $356.48 in the same time
period. Thus, the sales and use tax saves the median Brown County
property owner $496.68——a direct reduction.
¶55 In sum, we conclude that Brown County's sales and use
tax ordinance is consistent with Wis. Stat. § 77.70. Section 77.70
does not require a dollar-for-dollar offset to the property tax
levy. Instead, it authorizes counties to impose a sales and use
tax for the specific purpose of directly reducing the property tax
levy, while leaving the means to accomplish that purpose up to the
county. Because the County's ordinance does in fact directly
reduce the property tax levy by funding projects that would
otherwise have been paid for through additional debt obligations,
we determine that the ordinance is permissible.
¶56 Accordingly, we affirm the order of the circuit court.
By the Court.—The order of the circuit court is affirmed.
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¶57 REBECCA GRASSL BRADLEY, J. (dissenting).
"When I use a word," Humpty Dumpty said, in rather a
scornful tone, "it means just what I choose it to mean—
——neither more nor less."
"The question is," said Alice, "whether you can make
words mean so many different things."
"The question is," said Humpty Dumpty, "which is to be
master——that's all."
Lewis Carroll, Through the Looking-Glass and What Alice
Found There 124 (London, Macmillan & Co. 1899).
¶58 The Wisconsin Legislature enacted a statute providing
"county sales and use taxes may be imposed only for the purpose of
directly reducing the property tax levy[.]" Wis. Stat. § 77.70(2015–16) (emphasis added).1 Brown County enacted an ordinance
imposing a sales and use tax for the purpose of avoiding an
increase in the property tax levy. The majority declares the
County's ordinance lawful by equating the avoidance of an increase
with a reduction. The average American who faces the realities of
daily budgeting knows the majority's math does not compute:
Although he may prefer to drive a Maserati, he can only afford a
Honda, and "avoiding" the loan payment for a Maserati does not
mean he "reduces" his budget outlay by purchasing a Mercedes
instead of a Honda.
¶59 Defying basic logic, the majority chooses a different
meaning for "reducing" than the plain one the legislature gave it.
1 All subsequent references to the Wisconsin Statutes are to
the 2015-16 version unless otherwise indicated.
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In order to reduce a property tax levy, it must actually go down.
In this case, it didn't.
¶60 The Brown County Board of Supervisors (the Board)
decided to spend $147,000,000 on new projects. The property taxes
paid by property owners in Brown County were insufficient to fund
these projects, so the Board enacted an ordinance imposing a sales
and use tax in order to make up the difference. The sales and use
tax did not reduce the property tax levy (it actually went up).
Nevertheless, the Board maintains the property tax levy otherwise
would have had to increase in order to pay for all of the new
projects. The Board decided to avoid an increase in the property
tax levy by instead imposing a sales and use tax to directly pay
for the projects. The majority permits this, contorting a statute
designed for property tax relief into a blank check for
unaffordable spending. The majority may do so as the masters of
law-declaring in Wisconsin, but the statute does not mean what the
majority says.
¶61 The majority roots its analysis in a fallacious
presumption rather than the statutory text, a foundational error
contaminating its entire opinion. The majority relies entirely on
an affidavit of the Brown County Finance Director (the Director)
insisting the projects "would otherwise have been" funded through
issuing debt, which in turn would have required increasing the
property tax levy to pay for it.2 Of course, the County cannot
guarantee it could have accomplished the political feat of
borrowing $147,000,000 and then increasing the property tax levy
2 Majority op., ¶5.
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accordingly, which would have required the approval of either a
super majority (three-fourths) of the Board, or the County voters
via referendum. The majority sidesteps these political hurdles
altogether in order to contrive a "reduction" in the property tax
levy that never occurred. In accepting the County's baseless
presumptions, the majority rewrites Wis. Stat. § 77.70 into a blank
check for spending rather than the tax relief for property owners
the legislature enacted.
¶62 Chief Justice John Marshall once cautioned "[i]t would
be dangerous in the extreme, to infer from extrinsic circumstances,
that a case for which the words of an instrument expressly provide,
shall be exempted from its operation." Sturges v. Crowninshield,
17 U.S. (4 Wheat.) 122, 202 (1819). In this case, the majority
exempts "directly reducing" from any operative effect, thereby
gutting the express and unambiguous statutory requirement that a
county sales and use tax be imposed "only for the purpose of
directly reducing the property tax levy[.]" Our judicial duty is
to give effect to the legislature's duly enacted statutes by
declaring what they plainly mean. See Koschkee v. Taylor, 2019 WI
76, ¶54, 387 Wis. 2d 552, 929 N.W.2d 600 (Rebecca Grassl Bradley,
J., concurring)(citing Tetra Tech EC, Inc. v. Wis. Dep't of Rev.,
2018 WI 75, ¶3, 382 Wis. 2d 496, 914 N.W.2d 21 (lead
opinion))(explaining "the judiciary's constitutionally-vested
authority to say what the law is"). Because the majority chooses
a different meaning for Wis. Stat. § 77.70 than the legislature
gave it, I respectfully dissent.
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I. BACKGROUND
¶63 In 2017, Brown County enacted a sales and use tax
ordinance (the Ordinance) pursuant to Wis. Stat. § 77.70.
Section 77.70 authorizes counties to impose a 0.5 percent sales
and use tax by adopting an ordinance, provided the tax "may be
imposed only for the purpose of directly reducing the property tax
levy[.]" The Ordinance:
enacts a temporary 72 month, 0.5 percent Brown County
sales and use tax, revenues from which: 1) Shall not be
utilized to fund any operating expenses other than lease
payments associated with the below mentioned specific
capital projects; and 2) Shall be utilized only to reduce
the property tax levy by funding the below listed
specific capital projects, as well as funding said
specific capital projects' associated costs as deemed
appropriate by Brown County administration, in [the
provided] amounts[.]
Introduced as part of the County's "Debt Reduction, Infrastructure
& Property Tax Relief Plan," the Ordinance funded nine new capital
projects, with total costs of $147 million over six years.3
¶64 The Brown County Taxpayers Association and Frank Bennett
(BCTA) challenged the Ordinance, claiming it violated Wis. Stat.
§ 77.70, and the County sought a declaration that the Ordinance
was lawful. The circuit court granted summary judgment to the
County and denied BCTA's motion for reconsideration. After BCTA
3 The capital projects and their associated costs included:
(1) "Expo Hall Project" ($15 million); (2) "Infrastructure, Roads
and Facilities Projects" ($60 million); (3) "Jail and Mental Health
Projects" ($20 million); "Library Project" ($20 million);
"Maintenance at Resch Expo Center Project" ($10 million); "Medical
Examiner and Public Safety Projects" ($10 million); "Museum
Project" ($1 million); "Parks and Fairgrounds Project" ($6
million); and "Stem Research Center Project" ($5 million).
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appealed, the court of appeals certified the following issue, which
we accepted:
Does the sales and use tax Brown County enacted in 2017
and implemented as part of its 2018 budget process
"directly reduce the property tax levy," as required by
Wis. Stat. § 77.70 (2015–16), if the proceeds are
designated to fund new capital projects that
collectively would otherwise exceed the levy limits
established by Wis. Stat. § 66.0602, but the County
could otherwise fund the projects by borrowing?
II. STANDARD OF REVIEW
¶65 "On appeal, '[w]e independently review a grant of
summary judgment.'" Skindzelewski v. Smith, 2020 WI 57, ¶7, 392
Wis. 2d 117, 944 N.W.2d 575 (quoting West Bend Mut. Ins. Co. v.
Ixthus Med. Supply, Inc., 2019 WI 19, ¶9, 385 Wis. 2d 580, 923
N.W.2d 550). "The interpretation and the application of [Wis.
Stat. § 77.70] present questions of law that we review
independently." Jefferson v. Dane County, 2020 WI 90, ¶13, 394
Wis. 2d 602, 951 N.W.2d 556 (citing Dawson v. Town of Jackson,
2011 WI 77, ¶17, 336 Wis. 2d 318, 801 N.W.2d 316).
III. DISCUSSION
A. Plain Meaning of Wis. Stat. § 77.70¶66 This case turns on the meaning of Wis. Stat. § 77.70.
Accordingly, the analysis begins "with the language of the statute.
If the meaning of the statute is plain, we ordinarily stop the
inquiry." State ex rel. Kalal v. Cir. Ct. for Dane Cnty., 2004 WI
58, ¶45, 271 Wis. 2d 633, 681 N.W.2d 110. "We give statutory
language 'its common, ordinary, and accepted meaning, except that
technical or specially-defined words or phrases are given their
technical or special definitional meaning.'" Milwaukee Dist.
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Council 48 v. Milwaukee County, 2019 WI 24, ¶11, 385 Wis. 2d 748,
924 N.W.2d 153 (quoting Kalal, 271 Wis. 2d 633, ¶45). We interpret
statutory language "in the context in which it is used; not in
isolation but as part of a whole; in relation to the language of
surrounding or closely-related statutes; and reasonably, to avoid
absurd or unreasonable results." Id. (quoting Kalal, 271
Wis. 2d 633, ¶46). "In construing or interpreting a statute the
court is not at liberty to disregard the plain, clear words of the
statute." Kalal, 271 Wis. 2d 633, ¶46 (quoting State v. Pratt, 36
Wis. 2d 312, 317, 153 N.W.2d 18 (1967)).
¶67 The plain meaning of Wis. Stat. § 77.70 permits counties
to impose a sales and use tax "only for the purpose of directly
reducing the property tax levy[.]" The County acknowledges this
statutory requirement but argues it "does not require counties to
'use' or 'spend' sales and use tax proceeds only for that purpose."
The majority agrees, concluding the statute does not specify the
means by which counties must accomplish the direct reduction.4
¶68 The majority errs by allowing "for the purpose of" to
swallow "directly reducing" altogether.5 The statutory "purpose"
language, however, does not alter (much less eviscerate) the
meaning of the "directly reducing" clause. Instead, it merely
indicates to what end the tax may be imposed: "directly reducing
the property tax levy."
¶69 Even if the statute gives counties some latitude to
determine the mechanism by which to "directly reduc[e] the property
4 Majority op., ¶5.
5 Id., ¶¶38–39.
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tax levy," the County did not reduce the property tax levy at all,
much less "directly." The adverb "directly" means "[i]n a direct
line or manner" or "[w]ithout anyone or anything intervening."6
It is derived from the adjective "direct," which means "[e]ffected
or existing without intermediation or intervening agency;
immediate."7 The County's multi-step procedure was anything but
direct.8 Any purported reduction in the property tax levy stemming
from avoiding unapproved debt (and any corresponding increase in
the levy) by means of a sales and use tax does not "directly
reduc[e] the property tax levy"; in fact, the County increased
both the property tax levy and the sales and use tax, raising far
more revenue than it could have generated through property taxes
alone under normal budgeting constraints. Nevertheless, the
majority maintains the Ordinance directly reduces the property tax
levy "by funding projects that would otherwise have been paid for
through additional debt obligations[.]"9 The majority insists it
does not read "directly" out of the statute because "[i]t is just
as straightforward for a specifically-funded project to cause a
reduction in the property tax levy as it is for an offset to do
6 Directly, The American Heritage Dictionary of the English
Language 527 (3d ed. 1992).
7 Direct, The Oxford English Dictionary 702 (2d ed. 1989);
see also Direct, The American Heritage Dictionary of the English
Language 527 (3d ed. 1992) ("Having no intervening persons,
conditions, or agencies[.]").
8 See Indirect, The American Heritage Dictionary of the
English Language 919 (3d ed. 1992) ("Diverging from a direct
course; roundabout. . . . [S]econdary[.]").
9 Majority op., ¶5.
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the same."10 No matter how straightforward the method, neither of
those scenarios reflects what actually happened. The County is
not directly (or even indirectly) defraying any property tax
increase necessitated by its spending choices; instead, it is
funding new projects in the first instance with sales and use tax
revenues, which the property tax levy could not have otherwise
sustained.
¶70 By sanctioning the County's misuse of the statute, the
majority's interpretation renders the term, "directly,"
meaningless. See Kalal, 271 Wis. 2d 633, ¶46 ("Statutory language
is read where possible to give reasonable effect to every word, in
order to avoid surplusage."); Antonin Scalia & Bryan A. Garner,
Reading Law: The Interpretation of Legal Texts 174 (2012) ("These
words cannot be meaningless, else they would not have been used."
(quoting United States v. Butler, 297 U.S. 1, 65 (1936)). In order
for the property tax levy to be "directly" reduced, the reduction
must occur by the shortest path and "[w]ithout anyone or anything
intervening[.]"11 In order to lawfully use the sales and use tax
revenue to fund new spending, the County must first authorize and
issue general obligation bonds through statutory procedures under
Wis. Stat. ch. 67, then increase the debt levy, necessitating an
increase in the property tax levy in the corresponding amount to
pay for the debt service. See Wis. Stat. §§ 66.0602(3), 67.045,
10 Id., ¶41.
11See Directly, The American Heritage Dictionary of the
English Language 527 (3d ed. 1992).
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67.05. The sales and use tax revenue could then be applied to
directly reduce the property tax levy.
¶71 The County's purported "reduction" is not in fact any
reduction at all. The County's ability to authorize and issue
general obligation bonds is dependent upon the satisfaction of
several statutory prerequisites, in addition to following its own
debt issuance policies.12 Because the Ordinance funds new projects
that have not been approved for bonding——and therefore have not
produced any actual increase in the debt levy or property tax levy—
—there is nothing to reduce.13 Calculating savings based on a
theoretical increase in debt and property taxes that would have
resulted if an alternative funding mechanism had been approved
produces nothing but a chimera of a "reduc[tion]" and certainly
not a direct one.
¶72 The affidavit of the Director upon which the majority
relies, claiming the projects would have otherwise been funded by
debt, assumes the County would have satisfied the statutory
prerequisites to authorize and issue debt; however, until the debt
is actually issued and the property tax levy increased, any
purported "reduction" is purely conjectural. "Affidavits in
support of a motion for summary judgment must contain evidentiary
facts, of which the affiant has personal knowledge." Hopper v.
12 For example, the County's debt service policy limits
bonding to projects that cost at least $250,000 or have a project
life of at least five years, and spells out additional requirements
depending on the type and length of the project.
13See Reduce, The Oxford English Dictionary 433 (2d ed. 1989)
("To lower, diminish, lessen.").
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City of Madison, 79 Wis. 2d 120, 130, 256 N.W.2d 139 (1977) (citing
Kroske v. Anaconda Am. Brass Co., 70 Wis. 2d 632, 641, 235
N.W.2d 283 (1975)); see also Wis. Stat. § 802.08(3)(2019–20).
"Portions of affidavits which are made by persons who do not have
personal knowledge or which contain allegations of ultimate facts,
conclusions of law or anything other than evidentiary facts do not
meet the statutory requirements and will be disregarded." Hopper,
79 Wis. 2d at 130 (citing Kroske, 70 Wis. 2d at 641; Walter
Kassuba, Inc. v. Bauch, 38 Wis. 2d 648, 652, 158 N.W.2d 387(1968)). The Director's speculation regarding what might have
happened but for the imposition of the sales and use tax is "not
proper in support of a motion for summary judgment and is
ineffectual to establish evidentiary facts." Id. at 131.
¶73 The Director's assumption that the County would have
pursued bonding for these projects falls far short of fact; because
he is not the sole decisionmaker nor can he foresee the future, he
could not possibly know whether the statutory requirements would
have been met. The County Board must issue debt according to the
terms of Wis. Stat. ch. 67 as well as its own debt issuance
policies. For example, Wis. Stat. § 67.045 prohibits the governing
body of a county from issuing bonds unless the county holds a
referendum by which its citizens approve the debt issuance or the
governing body adopts a resolution to issue the debt by a vote of
three-fourths of the members. See Wis. Stat. §§ 67.05(3),14
67.045(1)(a), (f). The Director could not possibly possess any
Wisconsin Stat. § 67.05 governs the procedures for issuing
14
bonds, including requirements for adopting initial resolutions or
holding a referendum. See, e.g., Wis. Stat. § 67.05(1)-(3).
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personal knowledge that the debt would have issued, given the
political hurdles to be surmounted.15
¶74 The majority contends the surrounding statutes support
its interpretation.16 They don't. While context is important, the
statutes cited do not alter the plain meaning of Wis. Stat.
§ 77.70; if anything, they mirror its mandatory language. See
Kalal, 271 Wis. 2d 633, ¶46. Wisconsin Stat. §§ 77.705 and 77.706
were enacted to provide an additional funding source for former
Miller Park and Lambeau Field, respectively. Section 77.705
authorizes a "local professional baseball park district" to impose
a sales and use tax, requiring that any moneys transferred from or
to the relevant appropriation accounts "shall be used exclusively
to retire the district's debt." Wis. Stat. § 77.705.
Section 77.706 authorizes a "local professional football stadium
district" to impose a sales tax and use tax, similarly requiring
that any moneys transferred from or to the relevant appropriation
15For example, ¶5 of the affidavit states the Director was
"made aware that the [Board] discussed options for borrowing and
funding in relation to county infrastructure and capital needs in
early 2017"; ¶¶11–16 address steps in the County's budget process;
and ¶¶23–38 speak to the County's financial status after the
adoption of the sales and use tax. None of these paragraphs
support the Director's assertion that the debt would actually have
been approved. Further, ¶¶29–30 and 33, addressing the impact on
taxpayers if the County "was forced to borrow"——including the extra
costs of borrowing and the increase in taxes——cut against the
assertion that the County would have successfully pursued
borrowing. In light of these considerable expenses, the County
may have chosen to fund only some or ultimately none of the
projects to mitigate these costs.
16 Majority op., ¶¶42–43.
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accounts "shall be used exclusively to retire the district's debt."
Wis. Stat. § 77.706.
¶75 The majority manufactures a distinction between the
language of these stadium statutes and Wis. Stat. § 77.70,
concluding the legislature is "silent" on how the direct reduction
of the property tax levy should be accomplished, and that it could
have mandated——as it did in Wis. Stat. §§ 77.705 and 77.706——how
to do so.17 This is a distinction without a difference. While
they use different terms because they apply to different funding
sources, §§ 77.705 and 77.706 are structurally equivalent to
§ 77.70. Just as §§ 77.705 and 77.706 require a sales and use tax
be "used exclusively to retire the district's debt," § 77.70
requires that a sales and use tax under that section be imposed
"only for the purpose of directly reducing the property tax
levy[.]" Whatever "contrast" the majority sees in these
statutes,18 each mandates a particular end for which the tax is to
be used: to retire the districts' debt and to directly reduce a
county's property tax levy. The Ordinance neither operates
directly nor actually reduces the property tax levy——regardless of
the breadth the majority attaches to "purpose."19
B. The 1998 Attorney General's Opinion and the Impact of Wis.
Stat. § 66.0602¶76 To the extent the 1998 attorney general's opinion
suggests a county sales and use tax may fund projects not already
17 Id., ¶44.
18 Id.
19 Id., ¶38.
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funded by the property tax levy, the opinion——and the majority's
reliance on it——is wrong. The opinion responded to a simple
allocation question regarding how funds received from a county
sales and use tax may be budgeted by a county board. See Opinion
of Wis. Att'y Gen. to Dennis E. Kenealy, Ozaukee County Corp.
Counsel, OAG 1-98 (May 5, 1998). The attorney general answered,
"such funds may be budgeted to reduce the amount of the overall
countywide property tax levy or to defray the cost of any item
which can be funded by a countywide property tax." Id. at 1.
¶77 The attorney general's opinion compared two budgeting
methods used by counties in determining property tax levy
reductions: The first involved subtracting the net proceeds of
the sales and use tax directly from the total property tax——both
shown as single line revenue items in the budget——to determine the
net property tax that must be levied.20 Id. at 2. The second
20 The attorney general referenced the practice of some
counties to reflect sales and use tax revenues on individual
property tax bills only as a passing remark, not as one of the two
identified methods counties used to demonstrate direct property
tax reductions, as the majority claims. See majority op., ¶¶35,
45; Opinion of Wis. Att'y Gen. to Dennis E. Kenealy, Ozaukee County
Corp. Counsel, OAG 1-98 (May 5, 1998). It is not clear Wis. Stat.
§ 77.70 even authorizes this method; the attorney general
clarified that counties cannot "implement a direct system of tax
credits to individual property owners through distribution of
property tax bills[.]" OAG 1-98 at 2. Instead, Section 77.70
requires that the "property tax levy" be reduced.
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involved offsetting the cost of individual property-tax-funded
budget items by the net proceeds of the sales and use tax. Id.With regard to offsetting the cost of new as opposed to existing
projects, the attorney general opined:
It would be unreasonable to construe the statutory
restriction so that counties which had already started
certain projects could use sales and use tax revenues to
complete them while other counties contemplating the
initiation of similar projects could not use sales and
use tax revenues to fund them at all. . . . Counties
may therefore also budget the net proceeds of the sales
and use tax as an offset against the cost of any
individual budgetary item which can be funded by the
countywide property tax.
Id. at 2–3. The majority claims the attorney general's opinion
relied on the "essential fungibility of money and the principle
that the same reduction in the property tax levy occurs regardless
of whether the proceeds are budgeted as an offset on the bills of
taxpayers or used to fund a specific item."21 The majority errs
by assuming away the statutory and democratic prerequisites for
issuing debt. It is unknowable whether the County's voters or a
Legislative history confirms this conclusion. 1985 Senate
Bill 376, later enacted as 1985 Wisconsin Act 41, included an early
amendment limiting the sales tax revenue "only for the purpose of
property tax relief." Drafting File, 1985 Wis. Act 41, Legislative
Reference Bureau, Madison, Wis. The bill was later amended to
include the pertinent language as it currently exists,
substituting "property tax relief" with "directly reducing the
property tax levy." Id. Senator Feingold explained his amendment
requiring the tax provide "property tax relief" "should ensure
that the revenue [the sales tax] raises goes directly toward
lowering property tax bills." See Measure links property tax
relief to county sales tax, Waunakee Tribune, Oct. 17, 1985 at 7.
The change in language to directly reduce the levy indicates
§ 77.70 does not encompass the tax-bill-offset method.
21 Majority op., ¶45.
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super majority of the County Board would have approved bonding for
the County's proposed new projects. Because no debt was issued to
fund the projects, no corresponding property tax increase actually
occurred. Consequently, there was nothing to reduce.
¶78 Even if the attorney general's analysis was correct at
the time, it no longer accurately reflects the state of property
tax "fungibility."22 The attorney general released his opinion in
1998, before the legislature enacted the levy limits in 2005. See
2005 Wis. Act 25, § 1251c. This statute fundamentally altered the
fungibility principle on which the opinion relied because it
limited the extent to which counties can increase the property tax
levy at will. See Wis. Stat. § 66.0602(2).
¶79 The majority does not dispute that the County could not
raise the property tax levy under Wis. Stat. § 66.0602(2) to pay
for all of its new projects except under § 66.0602(3)(d)2. That
statutory exception allows the County to increase the property tax
levy in an amount its new projects would require only by issuing
general obligation debt.23 Quite conveniently, the County asserts
and the majority agrees it would have issued general obligation
22The attorney general's opinion does not come close to
contemplating the "careful budgeting process" that the County
asserts will be upended by concluding the Ordinance is unlawful.
The County emphasized that the circuit court found its budget
decisions "were made by 'intelligent and talented people' who
conducted 'ample research and put considerable thought and effort
into determining how the sales and use tax revenue would reduce
the property tax levy' and fund new projects." This might be true,
but it is hardly the type of situation the attorney general's
opinion considered in distinguishing an indirect reduction from a
direct reduction.
23 See majority op., ¶¶50–51.
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debt to pay for the projects. No one, however, submits any proof
of the political will to do so.
¶80 The County's bare assertion flies in the face of Wis.
Stat. § 66.0602(2), which prohibits the County from increasing the
property tax levy to pay for the projects. Under that statute,
the County could not have increased its 2018 property tax levy by
more than approximately $1 million dollars, but it sought to spend
approximately $18 million in sales and use tax revenues that year
to pay for its projects. Undeterred, the majority dismisses this
concern by citing the exception under § 66.0602(3)(d)2. for debt
service payments.24 That exception only exacerbates the majority's
analytical problems. Instead of providing the County the loophole
it seeks, § 66.0602(3)(d)2. introduces an intervening step in the
analysis of what "can be funded by a countywide property tax."
See OAG 1-98 at 4.
¶81 Applying the attorney general's analysis under the
current statutory scheme, the project funding generated by the
Ordinance constitutes at best only "indirect . . . property tax
relief" because § 66.0602(2) prevents the County from directly
increasing the property tax levy to pay for the projects. See OAG
1-98 at 3 ("The term 'directly' has meaning in those instances
where budgetary items cannot be funded through a countywide
24The attorney general's opinion in no way endorsed or even
contemplated the use of debt to evade property tax restrictions;
rather, that opinion addressed whether new spending funded by sales
and use tax revenue could have been "funded by a countywide
property tax," not whether a county could have obtained funds
through debt financing or some other funding option. See OAG 1-
98 at 3.
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property tax."). The County's plan requires an "intermediate step"
to reduce the property tax levy: issuing debt. See id. (defining
"directly" as "without any intermediate step"). Because issuing
debt requires the approval of County voters or a super majority of
the County Board, that intermediate step cannot be taken as a
foregone conclusion. While money may be fungible, political will
is not.
¶82 The County cannot sidestep Wis. Stat. § 66.0602(2) by
simply asserting it would have issued the debt. At a minimum,
§ 66.0602(2) and (3) demonstrate the indirectness of the County's
purported reduction in the property tax levy. Issuing debt for
the entire suite of projects may not have been politically or
practically feasible under the levy limit statute. The majority
and the County conclude that because the County legally could have
raised the levy under § 66.0602(3)(d)2., it would have actually
done so. Setting aside the statutory hurdles, the County itself
warned of "adverse consequences" from taking on "enormous debt,"
including "significant risk" of a decreased credit rating,
additional interest payments, and "passing the interest costs on
to county property-taxpayers for many years[.]" It cannot have it
both ways. Increasing the property tax levy beyond the levy limit
requires multiple steps, including issuing debt only after
obtaining the political approvals mandated under Wis. Stat.
§§ 67.045 and 67.05, among other constraints. Merely assuming the
County could have satisfied these prerequisites circumvents the
express language of Wis. Stat. § 77.70.
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¶83 As a final note regarding the attorney general's
opinion, the County's argument that the legislature has acquiesced
to the attorney general's interpretation of Wis. Stat. § 77.70because it has not amended the statute in response to the opinion
should be rejected.25 Although the majority declines to address
the issue because it erroneously endorses the opinion, this court
has explained that legislative acquiescence is a flimsy basis on
which to support a prior construction of a statute because
"[n]umerous variables, unrelated to conscious endorsement of a
statutory interpretation, may explain or cause legislative
inaction." Wenke v. Gehl Co., 2004 WI 103, ¶33, 274 Wis. 2d 220,
682 N.W.2d 405; see also Johnson v. Transp. Agency, 480 U.S. 616,
672 (1987) (Scalia, J., dissenting) ("[I]t [is] impossible to
assert with any degree of assurance that congressional failure to
act represents (1) approval of the status quo, as opposed to (2)
inability to agree upon how to alter the status quo, (3)
unawareness of the status quo, (4) indifference to the status quo,
or even (5) political cowardice."). "Our judicial duty is to say
25The legislature did amend Wis. Stat. § 77.70 in 2017 to
create an exception to the requirement that the sales and use tax
be imposed "only for the purpose of directly reducing the property
tax levy" for a county that has an electronics and information
technology manufacturing zone under Wis. Stat. § 66.0621(3m). See
2017 Wis. Act 58, § 34e. Section 66.0621(3m) provides that a
county "may issue bonds under this section whose principal and
interest are paid only through sales and use tax revenues imposed
by the county under s. 77.70." See 2017 Wis. Act 58, § 18k. The
legislature's specific carve-out for § 66.0621(3m) within § 77.70
reinforces the conclusion that the relationship between debt
service payments under § 66.0602(3)(d)2. and sales and use taxes
under § 77.70 is indirect; the majority's interpretation renders
this amendment superfluous.
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what the law is, not to surmise meaning from legislative
quiescence. Legislative inaction cannot support an interpretation
of the statute that is contrary to the plain meaning of the
language used in the statute." Winebow, Inc. v. Capitol-Husting
Co., 2018 WI 60, ¶53, 381 Wis. 2d 732, 914 N.W.2d 631 (Rebecca
Grassl Bradley, J., dissenting).
¶84 The attorney general's opinion does not account for the
current statutory constraints on a county's ability to increase
the property tax levy. Its reasoning rests on the attorney
general's personal assessment of the reasonableness of the
statute, prompting him to choose a construction that avoids the
actual and unambiguous meaning of the language, which the attorney
general deemed "unreasonable." For that reason alone the majority
should have rejected the opinion. The absurd or unreasonable
results canon of statutory construction applies only "when an
interpretation would render the relevant statute contextually
inconsistent or would be contrary to the clearly stated purpose of
the statute." State v. Grunke, 2008 WI 82, ¶31, 311 Wis. 2d 439,
752 N.W.2d 769; see also Scalia & Garner, supra at 237 ("[E]rror-
correction for absurdity can be a slippery slope. It can lead to
judicial revision of public and private texts to make them (in the
judges' view) more reasonable."). It is a misuse of the canon to
invoke it as a tool for discarding the plain meaning of an
unambiguous statute in favor of an interpretation the attorney
general (or a court) prefers. "The oddity or anomaly of certain
consequences may be a perfectly valid reason for choosing one
textually permissible interpretation over another, but it is no
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basis for disregarding or changing the text." See Scalia & Garner,
supra at 237. The clearly stated purpose of Wis. Stat. § 77.70 is
"directly reducing the property tax levy[.]" The County admits it
instead enacted the Ordinance "for the purpose of funding capital
projects[.]" Regardless of whether the majority feels the
legislature's chosen restriction on sales and use tax revenue is
"unreasonable," the County was compelled to abide by it but it
failed to do so.
C. County Budgeting
¶85 Brown County's budgeting procedures show the Ordinance
is unlawful. The County defines "capital project" as "an
investment in a capital improvement that has a project cost of at
least $250,000, is generally non-recurring, and has a service life
of five years or more." These projects "are proposed and adopted
as part of the annual County budget process." Further, "[f]inal
approval of bonding projects [is] subject to: 1) inclusion in the
Project Authorization Resolution and 2) financing being secured if
funded by bonds or notes. Both steps in this process are subject
to final approval by the County Board."
¶86 The County's 2018 budget listed the nine capital
projects funded by the Ordinance——subdivided into seventeen
"Projects"——under the "Proposed" category, defined as "Projects
that are being submitted to the County Board for its consideration
and action." In contrast, projects categorized as "Bonded" are
those "that have been through the Project Resolution Approval
process and for which financing has been secured and approved."
Consequently, the capital projects at issue had not been approved
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for financing——they represented new spending projects not already
funded by the property tax levy.26
¶87 In his affidavit, the Director stated:
I am familiar with Brown County's May 17, 2017 Ordinance
enacting a Sales and Use Tax for the purpose of funding
capital projects which it is my understanding and belief
would otherwise have been funded through the issuance of
additional debt obligations.
It is my belief that revenues to Brown County from the
Sales and Use Tax will benefit Brown County taxpayers by
lowering the property tax rate, reducing interest
expenses on financing projects, and having non-County
residents assist with financing through purchases
subject to the sales and use tax.
The Director admitted the tax was enacted "for the purpose of
funding capital projects which . . . would otherwise have been
funded through the issuance of additional debt obligations"——not
for the purpose of directly reducing the property tax levy as Wis.
26The County argues BCTA "would rather have counties plan
capital projects, borrow millions of dollars to pay for those
projects, take on the costly interest expense associated with the
debt, increase property tax levies to pay for the debt, absorb all
of the professional costs and fees associated with debt issuance,
and then impose a sales and use tax to decrease the debt burden."
If the County cannot pay for its projects by increasing its
property tax levy under Wis. Stat. § 66.0602(2), then this is what
Wis. Stat. § 77.70 requires to directly reduce the property tax
levy using sales and use tax revenue. Alternatively, the County
could keep its spending within the limits of its property tax
revenue and use the sales and use tax revenue to reduce the
property tax levy as the statute says. While skirting the
statutory requirements may enable the County to circumvent the
political hurdles associated with saddling its citizens with
costly debt, the County's complaints about the practicalities of
statutory compliance are properly addressed to the policymakers in
the legislature rather than this court. See United States v.
Butler, 297 U.S. 1, 79 (1936) (Stone, J., dissenting) ("For the
removal of unwise laws from the statute books appeal lies, not to
the courts, but to the ballot and to the processes of democratic
government.").
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Stat. § 77.70 requires. Tellingly, in the 2018 Brown County
Executive Budget Message, the County Executive extolled the
benefits of the new sales and use tax without any mention of
reducing the property tax levy:
Through the use of a temporary 72-month sales tax, we
will cut the county's debt in half, eliminate bonding
for six years, avoid mountains of interest by paying
cash for projects, and make over $147 million in needed
investments to county infrastructure and facilities
which have been put off for far too long.
¶88 Unless the property tax levy had already accounted for
these projects——for example, if the debt had been issued and the
property tax levy increased——the purpose of the Ordinance is not
to reduce the levy at all. Rather, the purpose is to avoid
increasing the levy through additional debt obligations. While
this purpose might be fiscally sound and politically attractive,
it does not satisfy Wis. Stat. § 77.70. Avoiding an increase is
not equivalent to a direct reduction. While the Director could
know the County would have sought to fund the projects through
issuing debt, it is simply not the case that he——or anyone——could
know the debt would actually have been approved and issued.
¶89 The Director also claimed the Ordinance "will result in
direct property tax savings every year from 2019 through 2023."
Any "savings" are illusory. The Director explained:
If the Sales Tax remains in place, taxes on a property
assessed at $163,200 (the median value of a home in Brown
County) would decrease by $140.20 between 2018 and 2023.
However, if there was no Sales Tax, the issuance of
general obligation debt would result in taxes on that
same median property increasing by $356.48 between 2018
and 2023.
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The difference is a savings of $496.68 for the typical
Brown County homeowner of a median property as a direct
result of the sales and use tax.
While this calculation is useful for the County to compare the
fiscal impact of alternative funding mechanisms, it does not show
an actual reduction in the property tax levy. The County
calculates the property tax savings based on a comparison between
two alternatives——imposing the sales and use tax and increasing
the debt levy. Because bonding represented an alternative method
rather than the status quo, its avoidance does not produce a
reduction in the tax levy under Wis. Stat. § 77.70. The proper
baseline for determining whether the sales and use tax "directly
reduc[es] the property tax levy" is the existing property tax levy.
¶90 The County is using its sales and use tax to "pay[] cash"
for new capital projects.27 Wisconsin Stat. § 77.70, however,
allows the sales and use tax to be used only to reduce the property
tax levy. By paying for the projects up front with sales and use
tax revenues instead of bonding, the County decided the costs of
those projects should be borne by sales and use taxpayers instead
of property taxpayers. This was not the County's decision to make.
Wisconsin Stat. § 77.70 limits the purpose of the sales and use
tax to "directly reducing the property tax levy"; the legislature
accordingly reserved for itself the policy choice of allocating
tax burdens among different payors. For example, the County
27At a County Executive Committee meeting, the County
Executive stated the Ordinance "would contain the specific numbers
for each of the buckets, but not the specific projects because in
the end, the projects are approved through the budget process.
What is changing is that the County would be paying cash for
projects that we know are coming forward instead of increasing
debt and increasing the property tax levy to pay for the projects."
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Executive "oppose[d] county property taxpayer funding of the new
arena." The County Executive's desire to prematurely offload new
project funding from property taxpayers to sales and use taxpayers
is inconsistent with the statutory limitation on the imposition of
sales and use taxes: to directly reduce the property tax levy.
Under the statutory scheme, property taxpayers must assume the
initial burden of debt to fund new projects, provided the County
Board musters the political capital to pursue issuing debt. Only
then may the increased property tax levy be reduced by the sales
and use tax. By skipping this step, the County surely avoids the
burden of obtaining its citizens' consent to bearing the expense
of the Board's preferred projects, but it violates the law in doing
so, not to mention hiding from property taxpayers the future fiscal
impact of the Board's spending.28
¶91 The sales and use tax and the property tax impact
different groups in different ways, and it is the prerogative of
the legislature to determine how those burdens should fall. For
example, "[t]he sales tax has generally been thought to be
inherently regressive because the proportion of an individual's or
family's income devoted to consumption declines as income
increases. Persons at lower income levels, therefore, tend to pay
a larger share of their income in sales tax." See Sydney Emmerich,
Sales and Use Tax, Legislative Fiscal Bureau, Informational Paper
28For example, one new sales and use tax-funded project in
the proposed 2019 Executive Budget——the "Community Treatment
Center Crisis Assessment Center"——was estimated to result in a
"significant" increase in salary and fringe benefits,
necessitating a levy of $1,442,024.
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#5, 3 (Jan. 2021); see also Measure links property tax relief to
county sales tax, Waunakee Tribune, Oct. 17, 1985 at 7 (quoting
Senator Feingold as stating, "The sales tax involves some
fundamental inequities which make it basically an unattractive
tax").
¶92 Historically, Wisconsin has relied heavily on property
taxes. See Noga Ardon, Property Tax Level in Wisconsin,
Legislative Fiscal Bureau, Informational Paper #15, 3 (Jan. 2021)
("Wisconsin local governments' heavy reliance on the property tax
has contributed to the state's above-average property tax
levels."). At the time the legislature enacted 1985 Wisconsin Act
41, it was particularly concerned with high property tax levels.
See, e.g., Measure links property tax relief to county sales tax,
at 7 (quoting Senator Feingold as stating, "The property tax is
still the biggest tax problem facing this state"). "[R]esidential
and commercial property have borne increasing shares of the tax
burden, while decreasing shares have been borne by manufacturing
and other property." See Property Tax Level in Wisconsin, at 4.
¶93 Against the backdrop of these documented concerns, Wis.
Stat. § 77.70 reflects the legislature's deliberate policy choice
to restrict counties to imposing sales and use taxes "only for the
purpose of directly reducing the property tax levy[.]" The
County's unlawful imposition of the sales and use tax to avoid
issuing debt for financing its increased spending shifts tax
burdens in a manner not contemplated by § 77.70. The statute
promotes fiscal restraint; it does not provide a blank check for
the County to pursue otherwise unfunded projects. In sanctioning
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the County's budgeting method, the majority upends the policy
choices the legislature enacted in § 77.70.
D. CONCLUSION
¶94 Wisconsin Stat. § 77.70 expressly provides that "county
sales and use taxes may be imposed only for the purpose of directly
reducing the property tax levy[.]" The Ordinance instead avoids
a levy increase associated with issuing debt. While the County
attempts to obfuscate the issue by pointing to its "careful
budgeting process" and the "adverse consequences" of concluding
the Ordinance is unlawful, the legal conclusion is simple: The
County could not increase its property tax levy under Wis. Stat.
§ 66.0602(2) to pay for its proposed new projects, so it would
have to rely on the exception to pay debt service under
§ 66.0602(3)(d)2. Because the County never sought the requisite
approval for debt issuance under Wis. Stat. ch. 67, the debt levy
has not been increased. The sales and use tax instead paid
directly for the new projects rather than being used to directly
reduce the property tax levy, which actually increased after the
County enacted the Ordinance. Instead of reducing the property
tax levy, the County misused § 77.70 to avoid an increase in
property taxes to pay for the County's preferred projects. Because
the County's sales and use tax avoided an increase in the property
tax levy rather than reducing it, the Ordinance violates § 77.70
and should be void. The majority instead upholds it, in derogation
of § 77.70; therefore, I respectfully dissent.
¶95 I am authorized to state that Chief Justice ANNETTE
KINGSLAND ZIEGLER joins this dissent.
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