Even shorter than the case "briefs" I've been posting, these summaries - lifted straight from appeals documents - allow me to cover even more cases. Each summary will include a link to the relevant brief or document for anyone interested in reading more. My insertions are in italics.
The case: Wisconsin Manufacturers and Commerce (WMC) v Village of Pewaukee
Case no.: 23AP690
Filed in: Wisconsin Supreme Court, petition for review
From Court of Appeals: District II, Appellate Judges Mark Gundrum, Maria Lazar, Lisa Neubauer; opinion by Lazar
Circuit Judge: Michael Aprahamian, Waukesha County
Filing Attorney: Maria Davis and Ryan Sendelbach, League of Wisconsin Municipalities
This is the third post about filings in this case. The first post, a summary of Pewaukee's petition for review, is here. The second, about WMC's response, is here. As a bonus, a post about the Court of Appeals' decision at issue is here.
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The Court of Appeals decision striking down Pewaukee's ability to establish a transportation utility district "improperly curtailed the expansive statutory home rule authority the Legislature has vested in Wisconsin municipalities," the League of Wisconsin Municipalities contends in an amicus brief urging the state Supreme Court to review the case.
Argument
I. This Court's Decision in Town of Buchanan Created Confusion by Including an Incomplete Summary of a Legal Issue That Was Not Before This Court.
State statute gives governing bodies management and control of the municipality's property, finances, highways, streets, navigable waters, and the public service. Wis. Stat. §§ 61.34(1) and 62.11(5). It empowers governing bodies to act for the municipality’s government and good order; for its commercial benefit; and for the public health, safety, and welfare. Municipalities may carry out these powers by license, regulation, suppression, borrowing money, tax levy, appropriation, fine . . . and other necessary or convenient means.
The District II Court of Appeals panel struck down Pewaukee's transportation district based on a Supreme Court ruling in 2003's Wisconsin Property Taxpayers, Inc. v Town of Buchanan, that found that a the town's transportation fee was an improper tax, not a fee. The town had used its taxing authority to establish the fee, a fact acknowledged by both parties.
Even though the issue was not disputed, this Supreme Court remarked that the parties were “correct” that the fee was a tax because it was “imposed . . . on a class of residents for the purpose of generating revenue.” Although true in a general sense, this statement gave the Court of Appeals the incorrect impression that the Village of Pewaukee’s TUF must be a tax too.
Another case, the1994 Court of Appeals decision in City of River Falls v. St. Bridget’s Catholic Church of River Falls, differentiated between a tax and a fee, the League said. the court held that “the primary purpose of a tax is to obtain revenue for the government, while the primary purpose of a fee is to cover the expense of providing a service or of regulation and supervision of certain activities.”
This distinction between fees and taxes is not mentioned at all by this court in Town of Buchanan because it wasn’t at issue.
However, the Court of Appeals’ failure to consider this distinction in the immediate case is deeply problematic because the question of whether the Village of Pewaukee’s TUF is a tax or a fee is a core point of contention. ...
The League urges this court to grant the Village’s petition for review to correct the misleading statement in Town of Buchanan. Not all TUFs are alike. They can be structured in multiple ways and implemented using different sources of authority. However, under the Court of Appeals’ decision in this case, all TUFs would be illegal.
II. Misapplying Town of Buchanan to This Case Improperly Infringes on Municipal Home Rule Authority.
Misapplying Town of Buchanan to this case also diminishes municipalities’ ability to govern locally and choose the best way to provide and pay for services in their community. Municipalities play a crucial role in the state’s transportation network, and they incur significant expense doing so. There are multiple funding mechanisms available to municipalities to recoup the cost of providing this service, and home rule authority allows them to select the best option for their community. The most obvious funding mechanism is the property tax levy. The property tax generates revenue for a municipality that can be used for various purposes, including financing road construction and maintenance. Municipalities may also finance road projects via special assessment. Special assessments may be used “as a complete alternative to all other methods provided by law” to pay for all or any part of the costs of a road project that confers special benefits on adjacent properties. And municipalities may charge residents a fee using municipal home rule authority to recover the costs of services it provides. ...
Applying Town of Buchanan as precedent also hampers their ability to find creative ways to best meet their residents’ needs. By implementing a TUF, a municipality can recover costs for transportation services in a way that is more equitable than specially assessing property owners, many of whom are residential property owners already bearing a disproportionate share of the tax burden. The Village’s TUF recovers the costs of maintaining roads in a manner proportionate to the amount of wear and tear developed properties generate. Properties that use and benefit from the roads more, pay a proportionally larger fee and properties that use and benefit from the roads less, pay a proportionally smaller fee. These are precisely the type of decisions that should be made at the local level.
III. This Case Presents an Opportunity to Clarify the Proper Test for Distinguishing Between Taxes and Fees.
When reviewing the pertinent cases, the proper test for distinguishing between a fee and a tax is unclear. Case law appears to establish a two-prong analysis considering: 1) the source of the municipality’s power for imposing the charge and 2) the municipality’s purpose for imposing the charge. ...
Most of the confusion in case law stems from attempts to identify a charge’s purpose. Wisconsin courts have examined various factors when identifying a charge’s purpose – e.g., the source of authority for the charge, whether the charge is for a governmental or proprietary function, the voluntary or involuntary nature of the charge, and the charge’s proportionality. The resulting analysis appears to be akin to a totality of the circumstances test; however, case law does not adequately clarify which factors must be considered, when a given factor is present, and how much weight each factor should be given. ...
The result of ... earlier ... cases is perplexing. It is difficult for municipalities to predict whether a court would hold they have properly structured a charge as a fee or conclude it is a tax. The League urges this court to grant review and take this opportunity to clarify the proper test for determining whether a municipal charge is a tax or fee. Such guidance will provide clarity to municipalities and lower courts alike.
By improperly applying Town of Buchanan as controlling precedent, the Court of Appeals failed to consider the true question before it – is Pewaukee’s TUF a valid fee enacted under home rule authority or is it a tax administered without the requisite statutory authority. The court’s mistaken reliance on Town of Buchanan was largely due to a single confusing sentence in the Town of Buchanan opinion, which highlights the confusing nature of the applicable case law. Furthermore, this mistaken reliance inappropriately infringes on municipal home rule authority. The League urges this court to grant the Village’s petition to review to address these issues.
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