MADISON – On Wednesday, the Court of Appeals struck down the Village of Pewaukee’s transportation utility fee, confirming the charge is an illegal tax. Wisconsin Manufacturers & Commerce (WMC) – the combined state chamber and manufacturers’ association – celebrates the ruling as a victory for taxpayers and the business community.
Transportation utility fees have been adopted in many Wisconsin municipalities to generate revenue to fund local projects while avoiding the limits on property taxes. This strategy has allowed many municipalities, including the Village of Pewaukee, to impose these charges on tax-exempt property and exceed their levy limits. In its lawsuit against Pewaukee, WMC argued that transportation utility fees disproportionately impact businesses, which violates the constitutional uniformity requirement.
“The Court of Appeals’ ruling against Pewaukee is an important win for taxpayers and the economy,” said WMC Litigation Center Executive Director Scott Rosenow, who handled this lawsuit against Pewaukee. “This victory helps combat a recent trend by local governments in Wisconsin: creating unlawful property taxes and calling them fees to try to avoid limits on property taxes.”
Last June, the Wisconsin Supreme Court unanimously struck down the Town of Buchanan’s transportation utility fee as an unlawful property tax. Although Pewaukee and the League of Wisconsin Municipalities argued that the Buchanan ruling was not applicable in this case, the Court of Appeals concluded otherwise, holding that Pewaukee’s transportation utility fee is an illegal tax for the same reasons that Buchanan’s was.
“With this ruling against Pewaukee, a Wisconsin appellate court has again correctly confirmed that transportation utility fees are unlawful,” Rosenow continued. “We’re pleased with the decision to uphold Wisconsin law and protect taxpayers from ever-increasing, limitless taxes.”