DOR Releases Consumer Price Index for Urban Consumers
Yesterday, the Wisconsin Department of Revenue (DOR) announced that the Consumer Price Index for all urban consumers (CPI-U) was certified at 3.0% for the 12 months ending August 31, 2021.
Note: This percentage was rounded to the nearest 0.10%.
Note: Section 131 of 2021 Act 1 moved the date DOR is to determine CPI for ERP purposes from September 30 to August 31. This change was made at the League’s request to better align the timing of the CPI determination with municipal budgeting.
Expenditure Restraint Program (ERP)
DOR uses this 3.0 percent CPI-U (inflation factor) in ERP to determine the allowable general fund budget percentage increase for qualifying municipalities from 2021 to 2022 (sec. 79.05(1)(am), Wis. Stats.).
To qualify for a 2023 ERP payment:
- Your 2021 municipal TID Out property tax rate must exceed five mills
- Your net general fund budget increase from 2021 to 2022 must be less than the sum of the 3.0% CPI-U increase, plus 60.0% of your net new construction percentage during 2020 (up to a maximum 2.0%)
Note: By October 1, 2021, DOR will send ERP budget limit letters providing allowable budget percent increases to municipalities with a 2020 mill rate that exceed five mills
The 3.0% inflation factor is also used to calculate the levy limit increase available for an increase in charges assessed by a joint fire department or joint emergency medical service (EMS) district (sec. 66.0602(3)(h), Wis. Stats.). You can enter an adjustment in Section D, Line I of the Levy Limit Worksheet if all of the following apply:
- Your municipality is a member of a joint fire department or joint EMS district as defined in sec. 66.0602(1), Wis. Stats.
- The increase in assessed charges would result in your municipality exceeding its levy limit
The joint fire department or joint EMS district’s total charges assessed (imposed on all members) for the current year (2022 budget year) compared to the prior year (2021 budget year), increased less than or equal to the CPI-U increase of 3.0% plus 2.0% (total of 5.0%).
- Your municipality is covered by the joint fire department or joint EMS district and adopted a resolution supporting the increase
Example: If the 2021 total assessed charges were $50,000 and the joint fire department's 2022 total assessed charges are $60,000, which is an increase of $10,000 or 20.0%. In this example, the municipality does not qualify for the levy limit adjustment, as the increase cannot be more than 5.0%.