May 18, 2023 - Introduced by Senators Felzkowski, Cabral-Guevara, James, Quinn and Knodl, cosponsored by Representatives Kurtz, Rodriguez, Vos, August, Born, Armstrong, Behnke, Binsfeld, Callahan, Dallman, Dittrich, Donovan, Duchow, Edming, Green, Gundrum, Gustafson, Hurd, Katsma, Kitchens, Krug, Magnafici, Maxey, Michalski, Moses, Murphy, Mursau, Nedweski, O’Connor, Oldenburg, Penterman, Petersen, Petryk, Plumer, Pronschinske, Rozar, Sapik, Schmidt, Schraa, Snyder, Sortwell, Spiros, Steffen, Summerfield, Swearingen, Tusler and Zimmerman. Referred to Committee on Shared Revenue, Elections and Consumer Protection.
SB301,,22An Act to repeal 49.45 (51), 59.605 (3) (c), 60.85 (1) (f), 66.0602 (3) (a) and (b), 66.1105 (2) (d), 70.043, 70.11 (42), 70.47 (15), 70.53 (1) (a), 71.07 (5n) (a) 5. d., 71.28 (5n) (a) 5. d., 76.07 (4g) (a) 11. and 12., 76.69, 79.01 (1), 79.01 (2d), 79.02 (3) (e) and 79.036 (2); to renumber 66.0608 (title); to renumber and amend 23.0917 (5t), 62.13 (2m) (title), 62.13 (2m) (a), 62.13 (2m) (b), 66.0608 (2), 66.0608 (3), 66.0608 (4), 77.51 (12t), 77.70 and 79.02 (3) (a); to amend 8.06, 26.03 (1m) (b) (intro.), 33.01 (9) (a), 33.01 (9) (am) 1. and 2., 33.01 (9) (ar) 1., 33.01 (9) (b) 1., 59.52 (25), 59.875 (2) (a), 60.34 (1) (a), 60.85 (1) (h) 1. c., 60.85 (1) (o), 61.26 (2), 61.26 (3), 62.09 (9) (a), 62.09 (9) (e), 62.13 (1), 62.13 (2) (b), 62.50 (1h), 62.50 (1m), 62.50 (3) (a), 62.50 (3) (am), 62.623 (1), 66.0435 (3) (c) 1. (intro.), 66.0435 (3) (g), 66.0435 (9), 66.0602 (1) (am), 66.0607 (1), 66.1105 (2) (f) 1. c., 66.1105 (2) (f) 2. e., 66.1105 (2) (i) 2., 66.1106 (1) (k), 70.02, 70.04 (1r), 70.05 (5) (a) 1., 70.10, 70.119 (3) (c), 70.13 (1), 70.13 (2), 70.13 (3), 70.13 (7), 70.15 (2), 70.17 (1), 70.174, 70.18 (1), 70.18 (2), 70.19, 70.20, 70.21 (1), 70.21 (1m) (intro.), 70.21 (2), 70.22 (1), 70.22 (2) (a), 70.27 (1), 70.27 (3) (a), 70.27 (4), 70.27 (5), 70.27 (7) (b), 70.29, 70.30 (intro.), 70.34, 70.345, 70.35 (1), 70.35 (2), 70.35 (3), 70.35 (4), 70.35 (5), 70.36 (1), 70.36 (2), 70.43 (2), 70.44 (1), 70.47 (7) (aa), 70.49 (2), 70.50, 70.52, 70.65 (2) (a) 2., 70.65 (2) (b) (intro.), 70.68 (1), 70.73 (1) (b), 70.73 (1) (c), 70.73 (1) (d), 70.84, 70.855 (1) (intro.), 70.855 (1) (a), 70.855 (1) (b), 70.995 (1) (a), 70.995 (4), 70.995 (5), 70.995 (7) (b), 70.995 (8) (b) 1., 70.995 (12) (a), 71.07 (5n) (a) 5. a., 71.07 (5n) (a) 9. (intro.), 71.07 (5n) (a) 9. a., 71.07 (5n) (d) 2., 71.07 (6e) (a) 5., 71.07 (9) (a) 3., 71.17 (2), 71.28 (5n) (a) 5. a., 71.28 (5n) (a) 9. (intro.), 71.28 (5n) (a) 9. a., 71.28 (5n) (d) 2., 71.52 (7), 73.01 (5) (a), 76.02 (1), 76.03 (1), 76.07 (2), 76.07 (4g) (a) 10., 76.07 (4g) (a) 13., 76.125 (1), 76.24 (2) (a), 76.31, 76.82, chapter 77 (title), 77.04 (1), 77.54 (20n) (d) 2., 77.54 (20n) (d) 3., 77.54 (57d) (b) 1., subchapter V (title) of chapter 77 [precedes 77.70], 77.71, 77.73 (2), (2m) and (3), 77.75, 77.76 (1), 77.76 (2), 77.76 (3), 77.76 (4), 77.77 (1) (a), 77.77 (1) (b), 77.77 (3), 77.78, 77.84 (1), 78.55 (1), 79.015, 79.02 (2) (b), 79.035 (title), 79.035 (4) (c) 2., 79.035 (4) (d) 2., 79.035 (4) (e) 2., 79.035 (4) (f) 2., 79.035 (4) (g), 79.035 (4) (h), 79.035 (4) (i), 79.035 (5), 79.035 (6), 79.035 (8), 79.05 (2) (c), 79.05 (3) (d), 119.04 (1), 174.065 (3), 256.15 (4m) (d), 256.15 (8) (b) 3., 815.18 (3) (intro.) and 978.05 (6) (a); to repeal and recreate 62.50 (3) (title), 79.035 (5) and 79.036 (1) (intro.); to create 13.94 (1) (w), 13.94 (1) (x), 13.94 (1) (y), 13.94 (1s) (c) 1m., 13.94 (1s) (c) 1s., 23.0917 (5t) (b), 25.17 (1) (jf), 25.491, 59.875 (2) (c), 59.875 (4), 59.90, 60.85 (5) (j), 62.623 (3), 62.625, 62.90, 66.0144, 66.0145, 66.0441, 66.0608 (title), 66.0608 (1) (fm), 66.0608 (2m), 66.1105 (5) (j), 66.1106 (4) (e), 70.015, 70.111 (28), 70.17 (3), 70.995 (5n), 71.07 (5n) (a) 9. c., 71.28 (5n) (a) 9. c., 73.03 (77), 76.025 (5), 76.074, 77.51 (12t) (a) to (c), 77.70 (2), 77.701, 77.76 (3r), 79.036, 79.037, 79.038, 79.039, 79.0965, 101.02 (7y), 115.385 (1) (e), 115.385 (1g) (g), 118.124, 252.03 (2j), 256.15 (1) (ij), 256.15 (4) (a) 4., 256.15 (8) (bm), 256.15 (8) (fm), 256.15 (10m), 256.35 (3s) (bm) 5. and 706.05 (2m) (b) 3. of the statutes; and to affect Laws of 1937, chapter 201, section 1 (4), Laws of 1937, chapter 201, section 14A, Laws of 1937, chapter 201, section 21, Laws of 1937, chapter 396, section 1 (3) (b), Laws of 1937, chapter 396, section 1 (4) (e) 2m., Laws of 1937, chapter 396, section 15 (1) and Laws of 1937, chapter 396, section 16A; relating to: county and municipal aid; imposing a city sales tax and an additional county sales tax to pay the unfunded actuarial accrued liability of city and county retirement systems; requiring newly hired city and county employees of certain city agencies and counties to be enrolled in the Wisconsin Retirement System; fire and police commissions of first class cities; eliminating the personal property tax; reporting certain crimes and other incidents that occur on school property or school transportation; advisory referenda; local health officers; local public protection services; exceptions to local levy limits; local regulation of certain quarry operations; emergency services; local approval of projects and activities under the Warren Knowles-Gaylord Nelson Stewardship 2000 Program; requiring a referendum; and granting rule-making authority. SB301,,33Analysis by the Legislative Reference Bureau This bill modifies shared revenue programs, addresses the retirement systems of the City of Milwaukee and Milwaukee County, eliminates the personal property tax, and contains various other provisions described in further detail below.
Shared revenue
Under current law, each county and municipality annually receives county and municipal aid payments. With certain exceptions, each county and municipality receives a county and municipal aid payment equal to the amount of the payment the county or municipality received in 2012. In addition, under current law, a municipality is eligible to receive an annual expenditure restraint payment if its property tax levy is greater than five mills and if the annual increase in its municipal budget is less than the sum of factors based on inflation and the increased value of property in the municipality as a result of new construction. Generally, the amount appropriated for the expenditure restraint program has not changed since 2003. In addition, current law provides state aid payments to counties and municipalities to compensate for certain property tax exemptions and for public utilities located in the county or municipality. Finally, current law provides state aid payments to municipalities that provide municipal services to state facilities.
The bill creates a trust fund designated as the local government fund. In 2024, counties and municipalities will receive a county and municipal aid payment equal to the amount of the payment received by the county or municipality in 2012. In subsequent years, a county or municipality will receive a county and municipal aid payment equal to the amount credited to the county and municipal aid account of the local government fund multiplied by the proportion of the total of county and municipal aid payments that the county or municipality received in 2024.
Also, beginning in 2024, the bill provides supplemental aid to counties and to cities, villages, and towns. The bill specifies separate formulas for distributing this supplemental county and municipal aid in 2024 for each of the following groups: 1) counties; 2) municipalities with less than 5,000 in population; 3) municipalities with between 5,000 and 30,000 in population; and 4) municipalities with over 30,000 in population. Under the bill, each municipality receives a supplemental county and municipal aid payment equal to at least 10 percent of municipality’s county and municipal aid payment. In subsequent years, a county or municipality will receive a supplemental county and municipal aid payment equal to the amount credited to the supplemental county and municipal aid account of the local government fund multiplied by the proportion of the total of supplemental county and municipal aid payments that the county or municipality received in 2024. The supplemental county and municipal aid may be used only for law enforcement, fire protection, emergency medical services, emergency response communications, public works, and transportation.
Under the bill, grants received from the state or from the federal government for the purpose of providing law enforcement, fire protection, and emergency medical services are excluded from being considered in determining eligibility for an expenditure restraint program payment. Under current law, a municipality is eligible to receive an expenditure restraint program payment if its property tax levy is greater than five mills and if the annual increase in its municipal budget, subject to certain exceptions, is less than the sum of factors based on inflation and the increased value of property in the municipality as a result of new construction.
The bill also creates a program to provide innovation grants to counties and municipalities that apply for such grants. The innovation grants are awarded to counties and municipalities that submit an innovation plan to transfer certain county or municipal services to a county, municipality, nonprofit organization, or private entity, and to be approved, a plan must realize a projected savings of at least 10 percent of the total cost of providing the service. The bill specifies that transfers of the following services or duties are eligible for receiving an innovation grant: public safety, fire protection, emergency services, courts, jails, training, communications, information technology, administration, public works, economic development, tourism, public health, housing, planning, zoning, parks, and recreation. To be awarded a grant under the bill, a county or municipality must enter into an agreement or contract to transfer services or duties to a county, municipality, nonprofit organization, or private entity, and the agreement or contract must 1) specify the services or duties to be transferred; 2) transfer those services or duties for a minimum period of time specified in the bill; 3) indicate the cost of performing those services or duties in the year immediately preceding the transfer; and 4) specify the cost of performing those services or duties for the entire term of the agreement or contract. Innovation grant payments may be made beginning in the fiscal year after the Department of Revenue promulgates rules to administer the program and the two following fiscal years. DOR must annually submit a report to the Joint Committee on Finance concerning all grants awarded and must audit 10 percent of the grants awarded. Municipalities with a population of 5,000 or less may apply for a separate innovation planning grant to use only for staffing and consultant expenses for planning the transfer of local government services.
The bill also makes the following changes regarding payments to local governments:
1. Requires the Department of Administration to make aid payments to taxing jurisdictions to compensate them for the loss of property tax revenue due to the repeal of the remaining personal property tax, discussed in further detail below. Under current law, DOA makes payments to taxing jurisdictions for certain personal property that is exempt from local property taxes to compensate them for the corresponding loss of property tax revenue.
2. Eliminates grants made to local government units through the Medical Assistance program for providing transportation for medical care.
Milwaukee city and county retirement systems
The bill authorizes a first class city and a county in which a first class city is located to impose sales and use taxes, the revenue from which must be used to pay the unfunded actuarial accrued liability of the city and county retirement systems and to increase public safety services. The bill also requires newly hired employees of a city, city agency, or county, if the city or county imposes the taxes, to be enrolled in the Wisconsin Retirement System, closes the Employes’ Retirement System of the City of Milwaukee and the Milwaukee County Employes’ Retirement System to new employees, prohibits the city or county from creating a new retirement system, and prohibits the city or county from changing the benefits of employees that remain enrolled in the two systems. The bill also makes several changes to the statutes governing the fire and police commission (FPC) of a first class city, presently only the City of Milwaukee.
Sales and use tax
Under current law, a county may impose a sales and use tax at the rate of 0.5 percent of the sales price of tangible personal property, goods, and services sold or used in the county. The tax may be imposed only for the purpose of reducing the property tax levy.
Under the bill, a county in which a first class city is located (currently, Milwaukee County) may impose an additional sales and use tax at a rate not exceeding 0.375 percent of the sales price of tangible personal property, goods, and services sold or used in the county. Under the bill, DOR keeps 1.75 percent of the revenue from the additional tax for administrative expenses. The bill requires that the remaining revenue be used to pay the unfunded actuarial accrued liability of the county’s retirement system and for public safety services. Under the bill, the tax does not take effect unless it is approved by the voters in the county at a referendum and the county chooses to join the WRS for all its new employees.
The bill also allows a first class city to impose a sales and use tax at a rate not exceeding 2.0 percent of the sales price of tangible personal property, goods, and services sold or used in the city. Under the bill, DOR keeps 1.75 percent of the revenue from the additional tax for administrative expenses. The bill requires that the remaining revenue be used to pay the unfunded actuarial accrued liability of the city’s retirement system and for public safety services. Similar to the tax imposed by the county, the tax imposed by the city does not take effect unless it is approved by the voters in the city at a referendum and the city chooses to join the WRS for all its new employees.
The bill also requires the county and city to annually submit a report to JCF detailing how the tax revenues were spent in the previous year. In addition, the bill requires the Legislative Audit Bureau to conduct a financial audit of the taxes imposed by the county and city once every five years, to annually conduct a financial audit of the retirement systems of the county and city, and to, at least every five years, contract to audit the actuarial performance of those retirement systems.
Under the bill, if in any year the county or city does not make the required contribution to the unfunded actuarial accrued liability of its respective retirement system, DOR will reduce the amount of the county’s or city’s shared revenue payment by the amount of the unpaid contribution and pay that amount towards the unfunded actuarial accrued liability. Also, if in any year the county or city uses the sales tax revenue for a purpose not authorized under the bill, DOR will reduce the shared revenue payment to the county or city, as appropriate, by the amount of the unauthorized expenditure.
Under the bill, the sales tax is no longer imposed after the county or city has paid in full the unfunded actuarial accrued liability of its respective retirement system.
Under current law, Milwaukee County and the City of Milwaukee each operate their own retirement systems, providing retirement benefits to individuals employed by the county or city. The bill requires that employees initially hired by Milwaukee County or the City of Milwaukee after December 31 in the year the county adopts an ordinance to impose a 1 percent sales and use tax and elects to join the WRS are covered under the WRS and not the county’s or city’s retirement system.
Provisions applicable to city of Milwaukee and Milwaukee County
In addition, the bill provides certain requirements or limitations for a city or county that is authorized to impose the sales tax under the bill. Among these requirements and limitations that apply to a first class city are:
1. The total amount of spending for cultural or entertainment matters or involving partnerships with nonprofit groups is limited to not more than 5 percent of the total city budget.
2. Net new program spending or position authorizations may occur only upon a two-thirds vote of all of the members of the common council.
3. The city may not use moneys raised by levying taxes for funding any position for which the principal duties consist of promoting individuals on the basis of their race, color, ancestry, national origin, or sexual orientation.
4. The city may not use moneys raised by levying taxes for developing, operating, or maintaining a rail fixed guideway transportation system (street car).
5. The city must maintain the level of law enforcement and fire department staffing at at least the current level.
6. The school board of the school district that is located in the first class city must ensure that 25 school resource officers are present at schools in the school district during school hours and that a reasonable number are present during other school-related activities, and that, beginning in the 2025-26 school year, the school board must consider the statistics required to be collected on violations of municipal disorderly conduct ordinances and certain crimes, as further described below, to allocate the school resource officers to specific schools in the school district.
7. Under current law, project costs for a tax incremental district (TID) in the city of Milwaukee may not include direct or indirect expenses related to operating a street car in the city of Milwaukee. The bill also excludes expenses relating to developing or constructing a street car from inclusion as project costs in a TID in the city of Milwaukee, with the exception of development and construction costs for a project referred to as the Lakefront Line.
8. Current law authorizes the FPC of a first class city to prescribe general policies and standards for the police and fire departments and to prescribe rules for the government of the members of the departments. Also under current law, an FPC of a first class city consists of seven or nine members selected by the mayor. The bill requires that of those members at least one is selected from a list provided by the employee association that represents nonsupervisory law enforcement officers and the employee association that represents fire fighters. Individuals included in these lists must be residents of the city, must have professional law enforcement experience or professional fire fighting experience, respectively, and may not be currently employed as a professional law enforcement officer or fire fighter, respectively. The bill also transfers authority for the control and management of the police and fire departments from the FPC to the chief of each department. Policies established for the control and management of the departments may be modified or suspended by a two-thirds vote of the common council.
Among the requirements and limitations that apply to a county in which a first class city is located are:
1. The total amount of spending for cultural or entertainment matters or involving partnerships with nonprofit groups is limited to not more than 5 percent of the total county budget.
2. Net new program spending or position authorizations may occur only upon a two-thirds vote of all of the members of the county board.
Elimination of the personal property tax
Under current law, beginning with the property tax assessments as of January 1, 2018, machinery, tools, and patterns, not including those items used in manufacturing, are exempt from the personal property tax. However, beginning in 2019, the state pays each taxing jurisdiction an amount equal to the property taxes levied on those items of personal property for the property tax assessments as of January 1, 2017.
Under the bill, beginning with the property tax assessments as of January 1, 2024, no items of personal property will be subject to the property tax.
Under current law, generally, public utilities, including railroad companies, are subject to a license fee imposed by the state instead of being subject to local property taxes. This bill creates a personal property tax exemption to the license fee for railroad companies in order to comply with the requirements of the federal Railroad Revitalization and Regulatory Reform Act.
The bill also makes a number of technical changes related to the repeal of the personal property tax, such as providing a process whereby manufacturing establishments located in this state that do not own real property in this state may continue to claim the manufacturing income tax credit.
Other provisions
Prohibition of certain discrimination
The bill prohibits a political subdivision, which means a county, city, village, or town, from discriminating against or providing a preference in hiring or contracting based on race, color, ancestry, national origin, or sexual orientation unless it is required to receive federal aid.
Collection of certain data related to criminal or ordinance violations occurring on school property
Beginning in the 2024-25 school year, the bill requires public high schools and private high schools participating in a parental choice program to collect statistics on violations of municipal disorderly conduct ordinances and certain crimes, including homicide, sexual assault, burglary, battery, and arson, that occur on school property or on transportation provided by the school. The high school must collect statistics about the crime or disorderly conduct only if 1) it occurred on a weekday between the hours of 6 a.m. and 10 p.m.; 2) it is reported to law enforcement; and 3) a charge is filed or citation is issued. The bill further requires that the collected statistics be reported to the Department of Public Instruction and included on the annual school and school district accountability report. In addition, the bill clarifies that DPI may not consider crimes statistics reported by a school or school district for purposes of determining a school or school district’s performance on the annual school and school district accountability report.
Maintenance of effort for protective services
The bill requires political subdivisions to certify to DOR that the political subdivision is maintaining a level of law enforcement and fire and emergency medical services that is at least equivalent to that provided in the previous year. County and municipal aid to political subdivisions that do not satisfy the maintenance of effort requirement are reduced by 15 percent.
Advisory referenda
The bill prohibits a county or municipality from holding an advisory referendum.
Local government spending reports
The bill requires DOR to annually produce a comparative local government spending report from information DOR annually collects from counties, municipalities, and public officers regarding the collection of taxes, receipts from licenses, and the expenditure of public funds and to create and maintain a web page on its Internet site to display the information contained in the report.
Local health officer
The bill prohibits a local health officer from issuing a mandate to close a business in order to control an outbreak or epidemic of communicable disease for longer than 14 days unless the governing body of the governmental unit in which the order is intended to apply approves an extension. Under the bill, no approved extension may be longer than 14 days.
Levy limit reduction for service transfers
Generally under current law, local levy limits are applied to the property tax levies that are imposed by a political subdivision in December of each year. Current law prohibits any political subdivision from increasing its levy by a percentage that exceeds its “valuation factor,” which is defined as the greater of either 0 percent or the percentage change in the political subdivision’s equalized value due to new construction, less improvements removed.
Also under current law, if a political subdivision transfers to another governmental unit the responsibility to provide a service that it provided in the previous year, the levy increase limit otherwise applicable in the current year is decreased to reflect the cost that the political subdivision would have incurred to provide that service. Similarly, if a political subdivision increases the services that it provides by adding the responsibility for providing a service transferred to it by another governmental unit that provided the service in the previous year, the levy increase limit otherwise applicable in the current year is increased to reflect the cost of that service. The bill repeals both of these provisions.
Local regulation of nonmetallic quarries
