Wisconsin Institute for Law & Liberty
Press Release

WILL Warns Town of Buchanan Transportation Fee Amounts to Unlawful Tax

Town of Buchanan has 120 days to remove fee, or face lawsuit

By - May 4th, 2021 12:02 pm

The News: The Wisconsin Institute for Law & Liberty (WILL) filed a Notice of Claim, Tuesday, with the Town of Buchanan, in Outagamie County, that a recently adopted “transportation utility fee” is an unlawful tax and must be eliminated. WILL filed the Notice of Claim on behalf of Wisconsin Property Taxpayers, Inc., a nonpartisan membership organization consisting of thousands of small business, farm, and property owners, to alert the Town of Buchanan that a lawsuit is forthcoming if the fee is not rescinded in 120 days.

The Quotes: WILL Deputy Counsel, Luke Berg, said, “The Town of Buchanan is hoping that by labeling a tax, a fee, they can exempt themselves from state law. That is not the case. The Legislature adopted strict levy limits precisely to prevent ever-increasing property taxes. Municipalities can’t make up new ‘fees’ to evade these limits without authorization.”

“Wisconsin property taxpayers dutifully cut a check each year to ensure their local governments and services are funded, and the needs of their communities are met,” said John Jacobson, WPT Government and Member Relations Director. “At the end of the day, which word you use to describe this unlawful tax does not make its financial burden any more affordable or any less insulting to our state’s Main Street businesses and homeowners.”

Background: The Town of Buchanan adopted a “transportation utility fee” in late 2019 to generate revenue to pay for its roads. The “transportation utility fee” is charged to “all developed properties” and is used to fund “the cost of utility district highways, stormwater management, sidewalks, street lighting, traffic control” and “any other convenience or public improvement.”

But this fee – despite its name – is really an unlawful tax. Nothing in state law authorizes municipalities to charge a road-use fee; rather, road costs are financed primarily through property taxes, which are subject to strict levy limits and uniformity requirements. The Town of Buchanan appears to be using this fee to circumvent those limits on property taxes.

According to the Wisconsin Department of Revenue, Buchanan was at its levy limit of $2.4 million last year. They are using this additional tax to levy $850,000 more from taxpayers—homeowners pay $315 annually and businesses and other properties pay between $200 and $8,000.

The Notice of Claim starts a 120-day timeline before a lawsuit against the Town of Buchanan can commence.

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