Opinion ID: 6320121
Heading Depth: 3
Heading Rank: 1

Heading: e. direct reduction of the property tax levy.

Text: ¶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.). 14 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). 15 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-fordollar 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 16 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). 17 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. 18 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 20year 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 19 No. 2020AP940 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. 20 No. 2020AP940.rgb ¶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. 1 No. 2020AP940.rgb 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. 2 No. 2020AP940.rgb 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. 3 No. 2020AP940.rgb