The Housing Authority Act does not create a state debt even though it calls for legislative appropriations in future years to service payment of notes and bonds. State ex rel. Warren v. Nusbaum, 59 Wis. 2d 391, 208 N.W.2d 780 (1973).

An authority’s power to issue notes and bonds does not constitute the creation of a state debt or a pledge of the state’s credit in violation of this article, since the creating act specifically prohibits the authority from incurring state debt or pledging state credit, and the provision of the act recognizing a moral obligation on the part of the legislature to make up deficits does not create an obligation legally enforceable against the state. Wisconsin Solid Waste Recycling Authority v. Earl, 70 Wis. 2d 464, 235 N.W.2d 648 (1975).

This section restricts the state from levying taxes to create a surplus having no public purpose. Although the constitutional provision does not apply directly to municipalities, the same limitation applies to school districts because the state cannot delegate more power than it has. Barth v. Board of Education, 108 Wis. 2d 511, 322 N.W.2d 694 (Ct. App. 1982).

This section’s limits on “public debt” apply only when the state itself is under a legally enforceable obligation. The State of Wisconsin Investment Board (SWIB) is not an arm of the state but is an independent going concern with independent proprietary powers and functions. SWIB’s investment-management actions with respect to the core retirement investment trust fund do not create debt payable by the state; rather, obligations run against the funds. OAG 2-22.

VIII,5Annual tax levy to equal expenses. Section 5. The legislature shall provide for an annual tax sufficient to defray the estimated expenses of the state for each year; and whenever the expenses of any year shall exceed the income, the legislature shall provide for levying a tax for the ensuing year, sufficient, with other sources of income, to pay the deficiency as well as the estimated expenses of such ensuing year.

VIII,6Public debt for extraordinary expense; taxation. Section 6. For the purpose of defraying extraordinary expenditures the state may contract public debts (but such debts shall never in the aggregate exceed one hundred thousand dollars). Every such debt shall be authorized by law, for some purpose or purposes to be distinctly specified therein; and the vote of a majority of all the members elected to each house, to be taken by yeas and nays, shall be necessary to the passage of such law; and every such law shall provide for levying an annual tax sufficient to pay the annual interest of such debt and the principal within five years from the passage of such law, and shall specially appropriate the proceeds of such taxes to the payment of such principal and interest; and such appropriation shall not be repealed, nor the taxes be postponed or diminished, until the principal and interest of such debt shall have been wholly paid.

The constitution does not preclude grants of state money to private parties for the purpose of affording disaster relief under the federal Disaster Relief Act of 1974. An appropriation by the legislature is required, however, to provide the state funding contemplated by the Act. Federal advances under the Act are limited by this section. 64 Atty. Gen. 39.

VIII,7(1)(1) The legislature may also borrow money to repel invasion, suppress insurrection, or defend the state in time of war; but the money thus raised shall be applied exclusively to the object for which the loan was authorized, or to the repayment of the debt thereby created.

VIII,7(2)(a)(a) The state may contract public debt and pledges to the payment thereof its full faith, credit and taxing power:

VIII,7(2)(b)(b) The aggregate public debt contracted by the state in any calendar year pursuant to paragraph (a) shall not exceed an amount equal to the lesser of:

VIII,7(2)(b)2.2. Five per centum of the aggregate value of all taxable property in the state less the sum of: a. the aggregate public debt of the state contracted pursuant to this section outstanding as of January 1 of such calendar year after subtracting therefrom the amount of sinking funds on hand on January 1 of such calendar year which are applicable exclusively to repayment of such outstanding public debt and, b. the outstanding indebtedness as of January 1 of such calendar year of any entity of the type described in paragraph (d) to the extent that such indebtedness is supported by or payable from payments out of the treasury of the state.

VIII,7(2)(c)(c) The state may contract public debt, without limit, to fund or refund the whole or any part of any public debt contracted pursuant to paragraph (a), including any premium payable with respect thereto and any interest to accrue thereon, or to fund or refund the whole or any part of any indebtedness incurred prior to January 1, 1972, by any entity of the type described in paragraph (d), including any premium payable with respect thereto and any interest to accrue thereon.

VIII,7(2)(d)(d) No money shall be paid out of the treasury, with respect to any lease, sublease or other agreement entered into after January 1, 1971, to the Wisconsin State Agencies Building Corporation, Wisconsin State Colleges Building Corporation, Wisconsin State Public Building Corporation, Wisconsin University Building Corporation or any similar entity existing or operating for similar purposes pursuant to which such nonprofit corporation or such other entity undertakes to finance or provide a facility for use or occupancy by the state or an agency, department or instrumentality thereof.

VIII,7(2)(e)(e) The legislature shall prescribe all matters relating to the contracting of public debt pursuant to paragraph (a), including: the public purposes for which public debt may be contracted; by vote of a majority of the members elected to each of the 2 houses of the legislature, the amount of public debt which may be contracted for any class of such purposes; the public debt or other indebtedness which may be funded or refunded; the kinds of notes, bonds or other evidence of public debt which may be issued by the state; and the manner in which the aggregate value of all taxable property in the state shall be determined.

VIII,7(2)(f)(f) The full faith, credit and taxing power of the state are pledged to the payment of all public debt created on behalf of the state pursuant to this section and the legislature shall provide by appropriation for the payment of the interest upon and instalments of principal of all such public debt as the same falls due, but, in any event, suit may be brought against the state to compel such payment.

VIII,7(2)(g)(g) At any time after January 1, 1972, by vote of a majority of the members elected to each of the 2 houses of the legislature, the legislature may declare that an emergency exists and submit to the people a proposal to authorize the state to contract a specific amount of public debt for a purpose specified in such proposal, without regard to the limit provided in paragraph (b). Any such authorization shall be effective if approved by a majority of the electors voting thereon. Public debt contracted pursuant to such authorization shall thereafter be deemed to have been contracted pursuant to paragraph (a), but neither such public debt nor any public debt contracted to fund or refund such public debt shall be considered in computing the debt limit provided in paragraph (b). Not more than one such authorization shall be thus made in any 2-year period. [1967 J.R. 58, 1969 J.R. 3, vote April 1969; 1973 J.R. 38, 1975 J.R. 3, vote April 1975; 1989 J.R. 52, 1991 J.R. 9, vote April 1992]

The debt limitations imposed are annual limitations but nevertheless have the effect of establishing an aggregate state debt limitation of five percent of the total value of all taxable property in the state plus the amount of debt sinking fund reserves on hand. 58 Atty. Gen. 1.