SB477: Bill Text

LRB-3982/2

MES&PG:cjs:rs

2003 - 2004 LEGISLATURE

2003 Senate BILL 477

February 20, 2004 - Introduced by Senators Welch, Kanavas, Leibham, Reynolds, Darling and A. Lasee, cosponsored by Representatives Honadel, Suder, LeMahieu, Gard, Gundrum, Freese, Weber, J. Fitzgerald, Pettis, Nass, F. Lasee, Towns, Hines and Vukmir. Referred to Committee on Homeland Security, Veterans and Military Affairs and Government Reform.

SB477,1,5 An Act to amend 121.905 (1), 121.91 (2m) (e) (intro.), 121.91 (2m) (r) 1. (intro.), 121.91 (2m) (r) 2. (intro.) and 121.91 (4) (f); and to create 38.17, 66.0602, 121.91 (2m) (f) and 121.91 (2m) (g) of the statutes; relating to: school district revenue limits and levy limits for cities, villages, towns, counties, and technical college districts.

Analysis by the Legislative Reference Bureau

This bill establishes levy limits for cities, villages, towns, counties (political subdivisions), and technical college districts for 2004 and 2005. Generally, the bill prohibits a political subdivision from increasing its levy by a percentage that exceeds the percentage change in the political subdivision's equalized value due to new construction, less improvements removed, not including any such changes in a tax incremental district (TID). In addition, the calculation of a city's or village's levy does not include any tax increment that is generated by a TID. With regard to technical college districts, the levy limit is the levy for the previous year multiplied by 1.026. The bill contains exceptions to the levy limit for political subdivisions and technical college districts that transfer to another governmental unit the responsibility to provide services, for cities or villages that annex town territory, and for a county levy that relates to a county Children with Disabilities Education Board. The levy limit may also be exceeded if a political subdivision's or technical college district's resolution to do so is approved in a referendum. A town with a population of less than 2,000 may exceed the levy limit if a resolution to do so is approved by an annual or special town meeting. The levy limits apply only to taxes levied in 2004 and 2005.

Under the bill, a technical college district's or political subdivision's levy limit is increased if the amount of debt service in the current year exceeds the amount in the prior year for debt that was approved by the governing body before July 1, 2004. The bill exempts from the limit all funds needed to pay debt service on debt authorized by resolution or referendum before July 1, 2004, and on debt authorized by referendum on or after July 1, 2004.

The bill also provides that if a city or village which has been providing services for a fee to property located in a town for at least ten years annexes territory from that town, the limit is increased by an amount equal to the city's or village's mill rate applied to the current assessed value of the annexed territory. The limit otherwise applicable to the town from which the territory was annexed is reduced by an amount equal to the town's mill rate multiplied by the assessed value of the annexed territory as of the last year that the territory was subject to town taxation.

The levy limit does not apply to the amount that a 1st class city (presently only Milwaukee) levies for school purposes. Currently, a 1st class city school district is not authorized to levy a tax; the city in which the school district is located levies a tax for school purposes at the direction of the school board.

The bill sets the per pupil adjustment under school district revenue limits at $120 in the 2004-05 school year and at $100 in each subsequent school year. Under current law, the per pupil adjustment is approximately $241 in the 2004-05 school year and is adjusted for inflation in subsequent school years.

Currently, a school district with per pupil revenue below $7,400 in the 2003-04 school year or below $7,800 in any subsequent school year is exempt from the revenue limits. This bill specifies that the $7,800 revenue ceiling applies only if the school board adopts a resolution setting its revenue ceiling at $7,800. Otherwise, the revenue ceiling is $7,400.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

SB477, s. 1 Section 1. 38.17 of the statutes is created to read:

SB477,2,5 38.17 Levy limit. (1) Definition. In this section, "debt service" includes debt service on debt issued or reissued to fund or refund outstanding municipal obligations, interest on outstanding municipal obligations, and related issuance costs and redemption premiums.

SB477,3,3 (2) Limit. Except as provided in subs. (3) and (4), no district board may increase its levy for the 2004-05 or 2005-06 fiscal year to an amount that exceeds its levy for the previous fiscal year multiplied by 1.026.

SB477,3,8 (3) Adjustments. (a) 1. If a district board transfers to another governmental unit responsibility for providing any service that it provided in the preceding fiscal year, the limit otherwise applicable under sub. (2) in the current fiscal year is decreased by the cost that it would have incurred to provide that service, as determined by the department of revenue.

SB477,3,13 2. If a district board increases the services that it provides by adding responsibility for providing a service transferred to it from another governmental unit that provided the service in the previous fiscal year, the limit otherwise applicable under sub. (2) in the current fiscal year is increased by the cost of that service, as determined by the department of revenue.

SB477,3,19 (b) 1. If the amount of debt service for a district board in the preceding fiscal year is less than the amount of debt service needed in the current fiscal year, as a result of the district board adopting a resolution before July 1, 2004, authorizing the issuance of debt, the limit otherwise applicable under sub. (2) for the current fiscal year is increased by the difference between the 2 amounts, as determined by the department of revenue.

SB477,3,25 2. The limit otherwise applicable under this section does not apply to amounts levied by a district board for the payment of any general obligation debt service, including debt service on debt issued or reissued to fund or refund outstanding municipal obligations, interest on outstanding municipal obligations, or the payment of related issuance costs or redemption premiums, authorized on or after July 1, 2004, by a referendum and secured by the full faith and credit of the district.

SB477,4,4 (4) Referendum. (a) 1. A district board may exceed the levy limit under sub. (2) if it adopts a resolution to that effect and the resolution is approved in a referendum. The resolution shall specify the proposed amount of increase in the levy beyond the amount that is allowed under sub. (2).

SB477,4,9 2. With regard to a referendum relating to the levy for the 2004-05 fiscal year, the referendum shall be held at the spring election or September primary or general election in 2004. With regard to a referendum relating to the levy for the 2005-06 fiscal year, the district board may call a special referendum for the purpose of submitting the resolution to the electors of the district for approval or rejection.

SB477,4,12 (b) The district board shall publish type A, B, C, D, and E notices of the referendum under s. 10.01 (2). Section 5.01 (1) applies in the event of failure to comply with the notice requirements of this paragraph.

SB477,4,21 (c) The referendum shall be held in accordance with chs. 5 to 12. The district board shall provide the election officials with all necessary election supplies. The form of the ballot shall correspond substantially with the standard form for referendum ballots prescribed by the elections board under ss. 5.64 (2) and 7.08 (1) (a). The question shall be submitted as follows: "Under state law, the percentage increase in the levy of the .... (name of district) for the next fiscal year, .... (year), is limited to ....%, resulting in a levy of $..... Shall the .... (name of district) be allowed to exceed this limit such that the percentage increase for the next fiscal year, .... (year), will be ....%, resulting in a levy of $....?".

SB477,4,25 (d) Within 14 days after the referendum, the district board shall certify the results of the referendum to the department of revenue. The limit otherwise applicable to the district under sub. (2) is increased for the next fiscal year by the amount approved by a majority of those voting on the question.

SB477, s. 2 Section 2. 66.0602 of the statutes is created to read:

SB477,5,2 66.0602 Local levy limits. (1) Definitions. In this section:

SB477,5,6 (a) "Debt service" includes debt service on debt issued or reissued to fund or refund outstanding municipal or county obligations, interest on outstanding municipal or county obligations, and related issuance costs and redemption premiums.

SB477,5,7 (b) "Political subdivision" means a city, village, town, or county.

SB477,5,13 (c) "Valuation factor" means a percentage equal to the percentage change in the political subdivision's January 1 equalized value due to new construction less improvements removed between the year before the previous year and the previous year, but not less than zero. In determining the valuation factor, the department of revenue shall exclude the value increment, as defined in s. 66.1105 (2) (m), of any tax incremental district that is located in the political subdivision.

SB477,5,17 (2) Levy limit. Except as provided in subs. (3), (4), and (5), no political subdivision may increase its levy in 2004 or 2005 by a percentage that exceeds the political subdivision's valuation factor. In determining its levy in any year, a city or village shall subtract any tax increment that is calculated under s. 66.1105 (2) (i).

SB477,5,23 (3) Exceptions. (a) If a political subdivision transfers to another governmental unit responsibility for providing any service that the political subdivision provided in the preceding year, the levy increase limit otherwise applicable under this section to the political subdivision in the current year is decreased to reflect the cost that the political subdivision would have incurred to provide that service, as determined by the department of revenue.

SB477,6,4 (b) If a political subdivision increases the services that it provides by adding responsibility for providing a service transferred to it from another governmental unit that provided the service in the preceding year, the levy increase limit otherwise applicable under this section to the political subdivision in the current year is increased to reflect the cost of that service, as determined by the department of revenue.

SB477,6,10 (c) Except as provided in par. (f), if a city or village annexes territory from a town, the city's or village's levy increase limit otherwise applicable under this section is increased in the current year by an amount equal to the town levy on the annexed territory in the preceding year and the levy increase limit otherwise applicable under this section in the current year for the town from which the territory is annexed is decreased by that same amount, as determined by the department of revenue.

SB477,6,16 (d) 1. If the amount of debt service for a political subdivision in the preceding year is less than the amount of debt service needed in the current year, as a result of the political subdivision adopting a resolution before July 1, 2004, authorizing the issuance of debt, the levy increase limit otherwise applicable under this section to the political subdivision in the current year is increased by the difference between these two amounts, as determined by the department of revenue.

SB477,6,23 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, 2004, by a referendum and secured by the full faith and credit of the political subdivision.

SB477,7,3 (e) The limit otherwise applicable under this section does not apply to the amount that a county levies in that year for a county children with disabilities education board.

SB477,7,12 (f) If a city or village which has been providing services for a fee to property located in a town for at least 10 years, annexes territory from that town, the city's or village's levy increase limit otherwise applicable under this section is increased in the current year by an amount equal to the city's or village's mill rate applied to the current assessed value of the annexed territory, and the levy increase limit otherwise applicable under this section in the current year for the town from which the territory is annexed is decreased by the town's mill rate applied to the assessed value of the annexed territory as of the last year that the territory was subject to taxation by the town, as determined by the department of revenue.

SB477,7,14 (g) The limit otherwise applicable under this section does not apply to the amount that a 1st class city levies for school purposes.

SB477,7,23 (4) Referendum exception. (a) A political subdivision may exceed the levy increase limit under sub. (2) if its governing body adopts a resolution to that effect and if the resolution is approved in a referendum. The resolution shall specify the proposed amount of increase in the levy beyond the amount that is allowed under sub. (2). With regard to a referendum relating to the 2004 levy, the referendum shall be held at the spring election or September primary or general election in 2004. With regard to a referendum relating to the 2005 levy, the political subdivision may call a special referendum for the purpose of submitting the resolution to the electors of the political subdivision for approval or rejection.

SB477,8,3 (b) The clerk of the political subdivision shall publish type A, B, C, D, and E notices of the referendum under s. 10.01 (2). Section 5.01 (1) applies in the event of failure to comply with the notice requirements of this paragraph.

SB477,8,12 (c) The referendum shall be held in accordance with chs. 5 to 12. The political subdivision shall provide the election officials with all necessary election supplies. The form of the ballot shall correspond substantially with the standard form for referendum ballots prescribed by the elections board under ss. 5.64 (2) and 7.08 (1) (a). The question shall be submitted as follows: "Under state law, the increase in the levy of the .... (name of political subdivision) for the tax to be imposed for the next fiscal year, .... (year), is limited to ....%, which results in a levy of $.... Shall the .... (name of political subdivision) be allowed to exceed this limit and increase the levy for the next fiscal year, .... (year), by a total of ....%, which results in a levy of $....?".

SB477,8,17 (d) Within 14 days after the referendum, the clerk of the political subdivision shall certify the results of the referendum to the department of revenue. The levy increase limit otherwise applicable to the political subdivision under sub. (2) is increased in the next fiscal year by the percentage approved by a majority of those voting on the question.

SB477,8,24 (5) Exception, certain towns. A town with a population of less than 2,000 may exceed the levy increase limit otherwise applicable under this section to the town if the annual town meeting or a special town meeting adopts a resolution to that effect. The limit otherwise applicable to the town under sub. (2) is increased in the next fiscal year by the percentage approved by a majority of those voting on the question. Within 14 days after the adoption of the resolution, the town clerk shall certify the results of the vote to the department of revenue.

SB477, s. 3 Section 3. 121.905 (1) of the statutes, as affected by 2003 Wisconsin Act 33, is amended to read:

SB477,9,6 121.905 (1) In this section, "revenue ceiling" means $6,900 $7,400, except that "revenue ceiling" means $7,400 $7,800 in the 2003-04 2004-05 school year and $7,800 in any subsequent school year if a school board adopts a resolution to that effect by a two-thirds vote of the members elect.

SB477, s. 4 Section 4. 121.91 (2m) (e) (intro.) of the statutes is amended to read: