The Village of Pewaukee's transportation user fee is an "impermissible tax" and not a fee as the village contended, the state Court of Appeals ruled this week.
The fee, to be levied on every developed property, was designed to support a new transportation utility district that would "spend money exclusively on pavement preservation, street and sidewalk construction or reconstruction, street lighting, traffic control, pedestrian facilities, storage for the equipment used for these purposes, and its own administration," Appellate Judge Maria Lazar wrote for unanimous three-judge District II Court of Appeals panel.
Joining with Lazar were by Appellate Judges Mark Gundrum and Lisa Neubauer.
The opinion overturned a ruling by Waukesha County Circuit Judge Michael J. Aprahamian, who ruled that the fee was not a tax.
Wisconsin Manufacturers and Commerce, which challenged the fee, appealed.
The state Supreme Court, in Wisconsin Property Taxpayers, Inc. v. Town of Buchanan, previously struck down a transportation utility fee (TUF) implemented by the town to fund "safe and efficient transportation facilities," Lazar said.
The Supreme Court ruled that the Buchanan TUF was a tax, she wrote. (Aprahamian's ruling came before the Supreme Court issued its decision.) SCOW said also said the TUF was not authorized under state law, that it was essentially a property tax, and that the town did not reduce its property tax levy to account for the TUF revenue, causing the town to exceed it property tax levy limit.
"We must hold that the TUF at issue here is also a tax," Lazar said.
The village's efforts to differentiate its user fee from Buchanan's "are not persuasive," she wrote. The village correctly asserted that Buchanan did not dispute that its fee was a tax, as Pewaukee did.
"But it is wrong in arguing that the Supreme Court did not decide this issue," she said. "On the contrary, the court explicitly held that '[t]he parties are correct' on this issue, citing case law ... to explain its conclusion that 'the TUF is a tax because the Town imposed it on a class of residents for the purpose of generating revenue. ' ”
The village's argument that it is different from the Buchanan situation because villages have home rule and towns do not also fails, Lazar said.
"The village does not explain, and we do not perceive, the relevance of this fact to the question of whether a charge is a fee or a tax; it can only arguably relate to the legality of a fee, since a village may not adopt a tax under its home rule authority," she wrote.
The panel also rejected the village's contention its situation was different than Buchanan's because its TUF's allowable uses and methods for determining "estimated use" were more specific than the town's also failed.
"Setting aside the scant evidence of any meaningful factual difference in either regard, the village cites no support from Town of Buchanan or any other authority for the notion that any such differences have legal significance," Lazar wrote. "Thus, we need not consider these arguments further."
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