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 town, village, city or county 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.).
On the Levy Limit Worksheet (Forms SL-202M and SL-202C)
- Your allowable levy is the amount in Section A, Line 10
- Line 10 is the sum of Line 8 (levy limit before adjustments) and Line 9 (total adjustments from Section D)
Special resolution (Form SL-202M)
- If a town with a population less than 3,000 approves a levy limit increase by special resolution, it must enter the total town tax levy (including the increase approved by the town electors) in Section A, Line 11
- The amount on Line 11 is your allowable levy
Where do I report the actual levy on the Levy Limit Worksheet?
Your actual levy is not reported on the Levy Limit Worksheet. Municipalities should report their actual levy on the Statement of Taxes (SOT). Counties report their actual levy on the State and County Apportionment form (SCTA).
The Levy Limit Worksheet is used 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 or SCTA.
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, shown in Section A, Line 8, to ensure your municipality's or county'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, instead, submit the auto-filled worksheet to DOR.
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 previous year's actual levy from the Statement of Taxes for municipalities or the State and County Apportionment Form for counties (except if there was an excess levy in the previous year) plus the current year's personal property aid payment. The allowable adjustments from Section D of the levy limit worksheet will vary by municipality and county.
Complete the appropriate Levy Limit Worksheet:
What impact does personal property aid have on levy limits?
Per Wis. Act 59, Code 2 personal property – locally assessed machinery, tools and patterns, can no longer be levied. Instead, the Wisconsin Department of Revenue will distribute a new personal property aid payment under sec. 79.096, Wis. Stats. Effective for December 2018 tax levies, the allowable levy limit is reduced by this new personal property aid. The reduction in the levy limit is replaced by the personal property aid payment issued the first Monday in May each year, beginning in May 2019.
How does the adjustment for covered services (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.
Can a municipality increase the levy for an increase in charges assessed by a joint fire department or a joint emergency medical services district?
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.
Under state law (sec. 66.0602(1)(ak), Wis Stats.), “Joint emergency medical services district” means a joint emergency medical services district organized by any combination of two or more cities, villages, or towns under sec.
If your municipality is a member of a joint fire department or a joint emergency medical services district by statute and the increase in assessed charges results in your municipality exceeding its levy limit, you can enter an adjustment in Section D, Line I if
all the following apply:
The joint fire department's or joint emergency medical services district'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) + 2%. CPI September 1, 2021 through August 31, 2022 is 7.7%.
- All municipalities covered by the joint fire department or joint emergency medical services district must adopt a resolution supporting the increase
Example: If the prior year (prior budget year) total assessed charges were $50,000 and the joint fire department's or joint emergency medical services district's current year (year you are budgeting for) total assessed charges are $60,000, that is an increase of $10,000 or 20%; the municipality does not qualify for an adjustment on this line of the Levy Limit Worksheet. Note: The increase cannot be more than 9.7% for the 2022 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, an overall increase in costs for an existing agreement, or a new intergovernmental cooperation agreement.
Example: if one member increases costs by 25%, the other members should decrease their costs to account for it.
Can a municipality or county increase the levy for unreimbursed emergency expenses?
- Yes. However, to increase a municipality's or county's levy limit for unreimbursed emergency expenses, the following must apply:
- Emergency must be declared by the governor
- Final determinations from all agencies that reimbursement requests were submitted to must be received (by the municipality or county) before any amount can be reported in Section D, Line G of the Levy Limit Worksheet
- If qualified based on the above, the unreimbursed emergency expenses can be reported in the year the emergency is declared or the following year
- The amount of unreimbursed expenses is entered in Section D, Line G of the Levy Limit Worksheet
Is there a levy limit adjustment for charges imposed upon a municipality by its utility?
A public utility may charge a municipality for providing services (sec. 66.0621(4)(g), Wis. Stats.). If this occurs, and the municipality must levy to fund the payment, there is no levy limit adjustment available. The municipality must fund the payment within its levy limit, unless pursuing the approval to exceed its levy limit by special resolution or referendum.
Note: If the public utility charges the municipality because of an unforeseen revenue bond shortfall, the municipality may increase its levy limit by reporting an adjustment in Section D, Line O – see questions 17-18 for additional information.
How does a municipality determine if an occupancy permit has been issued?
Before a homeowner can occupy a newly built residence, an occupancy permit must be issued. This is not the same as a building permit. The occupancy permit is issued once the home is determined to be in a condition suitable for occupancy. These permits are generally issued by the building inspector.
How is the median price of a new residential dwelling unit determined?
To determine the median price, you must include all single-family residential dwelling unit sales from the previous year. If you are unsure whether a home was sold, check with your local assessor. Once you have a list of sales prices for all single-family homes sold in the previous year, you can calculate the median as follows.
- Arrange the amounts in order by size
- If there is an:
- Odd number of terms – the median is the center term
- Even number of terms – add the two middle terms and divide by 2
Does a municipality or county need to adjust its levy limit due to a reduction of general obligation debt authorized prior to July 1, 2005 debt?
Per 2017 Wisconsin Act 59, effective for 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 previous 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 it applies, the reduction must be entered.
Does general obligation debt authorized before July 1, 2005 (referred to as old debt) become new debt (general obligation debt authorized after July 1, 2005) when it is refinanced?
No. If old debt is refinanced, it remains old debt for purposes of the Levy Limit Worksheet. Therefore, you cannot include the scheduled principal and interest payments for old debt that was refinanced, in Section D, Line E of the Levy Limit Worksheet.
Where do I report general obligation debt authorized after July 1, 2005 on the Levy Limit Worksheet?
Report scheduled principal and interest payments for the next year on general obligation debt authorized after July 1, 2005, in Section D, Line E of the Levy Limit Worksheet. The payments must be scheduled and cannot be early/extra payments, unscheduled payments, or loan payoffs. Since general obligation debt authorized after July 1, 2005 is not base building (does not remain in the base levy going forward), only include the amount you need to levy for in Section D, Line E.
Why does a revenue bond shortfall occur and where do I report it?
Unlike general obligation bonds that are backed by the full taxing authority of the municipality, revenue bonds are secured or "backed" by revenue. A shortfall occurs when the revenue designated for the revenue bond payment is insufficient due to unforeseen circumstances (ex: inadequate user fee revenue).
A revenue bond shortfall can be reported in Section D, Line O of the Levy Limit Worksheet in the year that the shortfall occurs.
Can a revenue bond shortfall be planned?
No. Local government entities issuing revenue bonds are required to ensure revenues are sufficient to make bond payments. State law outlines revenue bond requirements (sec. 66.0621, Wis. Stats.). If for an unforeseen reason there is a revenue shortfall, steps should be taken to remedy the shortfall for future years (ex: increasing the applicable user fees).
A revenue bond shortfall cannot be reported on an ongoing basis.
Can a county or municipality report a revenue bond shortfall from a joint fire department?
Under state law (sec. 66.0602(3)(e)5, Wis. Stats.), a county or municipality may increase its levy limit by reporting a joint fire department's revenue bond shortfall in Section D, Line O if the following applies:
- The joint fire department uses the proceeds of the bond to pay for a fire station and assesses the county or municipality for its share of that debt, based on an agreement under sec. 66.0301, Wis. Stats.
- The debt incurred by the joint fire department is the responsibility of the county or municipality
- Note: This includes the annual debt amount the county or municipality is responsible for
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.
What is the process for exceeding the allowable levy limit for a town with a population less than 3,000?
For towns with a population
less than 3,000, the 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, the town board proposes and approves, by majority vote, a specific levy limit increase amount. If approved, the board prepares the written resolution
Town Board to Propose Exceeding Levy Limits, dates and signs it.
Post public notices for the special town meeting – must post in three public places at least 15 days (but not more than 20 days) prior to the special town meeting. It should state, as a separate agenda item, that the board approved exceeding the levy limit by a percentage increase of "X%" and a dollar 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 a percentage increase of "X%" and a dollar increase of "X" amount. The vote must be on the exact amount approved by the town board. A majority vote of the electors is needed to approve the levy limit increase proposed and approved by the town board. If approved, the clerk prepares the written resolution
Resolution of Electors to Exceed the Levy Limit at Special Town Meeting of Electors. The number of votes (aye and nay) must be included on the resolution.
If approved, the town must provide DOR with the following documents within 14 days:
- Town board resolution proposing to exceed the levy limit (signed and dated)
- Public notice for the special town meeting, including where it was posted and when it was posted
- 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 their levy limit after adopting a resolution to exceed the levy limit, which is then approved in a referendum.
- Effective for 2020 tax levies, referendums can now be held at the spring primary or election, or fall partisan primary or general election
- If held in the spring, a political subdivision should use the most current data available to determine its valuation factor, which would be based on the prior year's levy limit worksheet
- Referendum language must include the purpose for the increase, the percentage increase in the levy due to the referendum increase, the dollar amount of 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, city, village, or town must provide DOR with the following documents within 14 days:
- Signed Resolution for the Increase by Referendum
- Copy of the ballot containing the referendum question
- Voting results
Exceeding Levy Limits by Referendum or Resolution for more information.
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