What are county and municipal levy limits?
Levy limits provide the maximum amount a town, village, city and county may implement as a property tax levy on parcels within their boundaries.
What is the maximum amount a county, town, village or city can levy?
Towns, villages, cities and counties use the Levy Limit Worksheet to determine the maximum allowable property tax levy they can implement without potentially receiving a penalty under state law (sec. 66.0602, Wis. Stats.).
Where do I report the actual levy on the Levy Limit Worksheet?
You report the actual levy on the Statement of Taxes (SOT), not on the Levy Limit Worksheet. You must use the Levy Limit Worksheet to calculate and report the allowable levy limit.
Even if your actual levy is less than your allowable levy limit, you must submit your Levy Limit Worksheet showing your allowable levy limit. Your actual levy is reported on your SOT.
Do I need to complete the Levy Limit Worksheet if there are no adjustments to our allowable levy?
Yes. Each county and municipality must submit a Levy Limit Worksheet to the Wisconsin Department of Revenue (DOR). You should review your allowable levy limit before adjustments in Section A to ensure your municipality's property tax levy is less than or equal to the allowable levy limit. If there are no adjustments, you would not enter any amounts in Section D, then submit.
What is our allowable levy limit?
Use the Levy Limit Worksheet to calculate your maximum allowable levy for the current year. The starting number in this calculation is the prior year's actual levy (except if there was an excess levy in the prior year). The allowable adjustments may vary.
Complete the appropriate Levy Limit Worksheet:
What is the penalty for exceeding the levy limit?
The penalty is a loss of shared revenue. This is a dollar for dollar penalty.
Example: If a municipality exceeds its levy limit by $1,000, its state shared revenue payment is reduced by $1,000. If the penalty amount is greater than the state shared revenue payment amount for that year, the remaining penalty amount is deducted from subsequent state shared revenue payments until the penalty is paid in full.
How does state law (sec. 66.0602 (2m)(b), Wis. Stats.), affect our municipality or county?
The state created a law (sec. 66.0602 (2m)(b), Wis. Stats.), which can be summarized as:
On or after July 2, 2013, if a county or municipality adopts a new fee or a fee increase for covered services (which were partly or wholly funded in 2013 by property tax levy), that county or municipality must reduce its levy limit in the current year by the amount of the new fee or fee increase, less any previous reductions. This also applies to payments in lieu of taxes.
Covered services include:
- Garbage collection – except for municipalities or counties that owned and operated a landfill on January 1, 2013
- Fire protection – excluding the production, storage, transmission, sale and delivery, or furnishing of water for public fire protection purposes
- Snow plowing
- Street sweeping
- Storm water management
The total amount of the reduction implemented by a county or municipality, including prior year reductions, should not exceed the amount funded by tax levy in 2013 to provide the covered service.
Does a municipality or county need to adjust their levy limit due to a reduction of general obligation debt authorized prior to July 1, 2005 debt?
Per 2017 Wisconsin Act 59, since the December 2017 tax levies, counties and municipalities must reduce their levy limit if their general obligation debt service levy for debt authorized prior to July 1, 2005 is less in the current year compared to the prior year. This is referred to as a "negative debt adjustment." The reduction is entered in Section D, Line B of the Levy Limit Worksheet.
Note: Starting with December 2017 tax levies, there is no longer an exception to the "negative debt adjustment." In result, if applies, the reduction must be entered.
What is the process for exceeding the allowable levy limit for a town with a population under 3,000?
For towns with a population
under 3,000, a town board may adopt a resolution to exceed the levy limit, which is approved by electors at a special town meeting. The steps are listed below.
Hold a town board meeting – at the meeting by majority vote the board members approve exceeding the levy limit. If it is approved, the board prepares a written resolution of the
Town board proposing to exceed the levy limit.
Post public notices for the special town meeting – must post in three public places at least 15 days before the special town meeting. It should state that the board approved exceeding the levy limit by an increase of "X" amount, which the electors will be voting on at this special town meeting.
Hold special town meeting – for the electors to vote on the town board's resolution proposing to exceed the levy limit by "X" amount. The vote must be on the exact amount approved by the town board.
Resolution for electors to exceed the levy limit – clerk prepares resolution at the special town meeting, where a majority vote by the electors is needed to approve the town board resolution. The number of votes (aye and nay) must be included.
If approved, the town must provide DOR with the following within 14 days:
- Town board resolution proposing to exceed the levy limit (signed and dated)
- Public notice for the special town meeting
- Resolution of electors approving to exceed the levy limit (signed, dated, with voting results)
What is the process for exceeding the allowable levy limit for a county, city, village or town with a population over 3,000?
Under state law (sec. 66.0602(4), Wis. Stats.), all counties, cities, villages or towns with a population over 3,000 may exceed its levy limit after adopting a resolution to exceed its levy limit, which is approved in a referendum.
- Referendums can only be held in the fall at a partisan primary of general election; they cannot be held in the spring
- Referendum language must include the purpose for the increase and the term of the increase. You must use the language outlined in the statute for the referendum question. See sec. 66.0602 (4) (c), Wis. Stats., for the required language.
If approved, the county, village, city or town must provide DOR with the following within 14 days:
- Copy of the ballot
- Voting results
Can a municipality increase the levy for an increase in charges assessed by a joint fire department?
Yes. You can enter an adjustment in Section D, Line I of the Levy Limit Worksheet, which increases your levy limit if the charges assessed by your joint fire department increased and your municipality meets the requirements below.
Under state law (sec. 66.0602(1)(am), Wis. Stats.), “Joint fire department" means a joint fire department organized under
sec. 61.65 (2) (a) 3., or
62.13 (2m), or a joint fire department organized by any combination of two or more cities, villages, or towns under
sec. 66.0301 (2).
If your municipality is a member of a joint fire department by statute and the increased assessed charges result in your municipality exceeding its levy limit, you can enter an adjustment in Section D, Line I if
all of the following apply:
- The joint fire department's
total charges assessed for the current year (not just your municipality's share) compared to the prior year, increased less than or equal to the percentage change in the Consumer Price Index (CPI) from October 1 through September 30 of the current year, plus 2 percent. Note: The percentage change in CPI from October 1, 2017 through September 30, 2018 is 2.4 percent.
- All municipalities covered by the joint fire department adopt a resolution supporting exceeding the levy limit
Example: If the prior year total assessed charges were $50,000 and the joint fire department's current year total assessed charges are $60,000, there is an increase of $10,000 or 20 percent; the municipality does not qualify for an adjustment on this line of the Levy Limit Worksheet. Note: the increase cannot be more than 4.4 percent for the 2018 Levy Limit Worksheet.
Where should a municipality or county adjust the levy for an increase or decrease in costs associated with an intergovernmental cooperation agreement?
You may make an adjustment in Section D, Line H of the Levy Limit Worksheet, which is used for an increase or decrease in costs associated with an intergovernmental cooperation agreement. This line is for a redistribution of costs for an existing agreement. This line cannot be used for a new service, increased costs or a new intergovernmental cooperation agreement.
Example: if one member increases costs by 25 percent, the other members should decrease their costs to account for it.
FOR QUESTIONS OR COMMENTS CONTACT:
WISCONSIN DEPARTMENT OF REVENUE
Local Government Services Bureau
PO Box 8971
Madison, WI 53708-8971
Fax: (608) 264-6887
Email additional questions to