Transportation utility fees in Wisconsin may be in danger after court decision

(The Center Square) – Local governments across Wisconsin may be looking to raise taxes now that their transportation fees are in legal limbo.

The Wisconsin Supreme Court denied a petition from the Village of Pewaukee to hear its case that sought to save its transportation fee.

Pewaukee, like many local governments across the state, turned to a transportation utility fee to raise money for local road projects.

Wisconsin Manufacturers & Commerce sued, arguing the fee is nothing more than a tax by another name, and Pewaukee exceeded its taxing authority by charging the fee.

“This is a huge win for taxpayers across the state of Wisconsin,” WMC President & CEO Kurt R. Bauer said in a statement. “The Supreme Court’s decision confirms that local governments cannot exceed their authority to raise revenue beyond property tax limits through the creative use of so-called fees.”

WMC is not alone in celebrating the win.

“This is a GREAT day for taxpayers, and a TERRIBLE day for local governments who want to illegally grab more revenue from their residents,” Lucas Vebber with the Wisconsin Institute for Law and Liberty said on social media.

WILL actually brought the first case against local transportation fees.

The Wisconsin Supreme Court unanimously ruled in June the Town of Buchanan’s transportation utility fee was an unlawful property tax.

But the town and the League of Wisconsin Municipalities argued the Buchanan ruling was only a limited ruling.

“Local government advocates and their allies argued that opinion was limited to towns, and otherwise did not prohibit villages and cities to continue doing the same thing. They were wrong,” Vebber said. “WMC filed this suit in Waukesha County, and the court originally sided with Pewaukee. WMC appealed, and the court of appeals, citing our win in Buchanan, struck down Pewaukee's transportation utility fee. Pewaukee then sought review from the Supreme Court of WI, filing a Petition for Review. [Friday] the Court denied that Petition.”

Bauer said the Supreme Court ruling establishes a clear line for local governments.

“Simply put, transportation utility fees are nothing more than unlawful taxes,” he added.

Neither Pewaukee or other local governments have said what the loss of the transportation utility fee will mean for their budgets, or the road projects they were supposed to be funding.