League of Wisconsin Municipalities
  Capitol Buzz 
May 18, 2017
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JFC Retains Governor's Shared Revenue Funding Level; Makes Changes to Computer Aids  

This afternoon, the Legislature's Joint Committee on Finance (JFC) reviewed parts of the state budget dealing with shared revenue and levy limits. The committee chose to retain the Governor's proposed funding level for shared revenue, which is the same amount as in the current state budget.  For calendar year 2017, payments will total $630.4 million for municipalities and $122.7 million for counties, for a combined total of $753.1 million statewide. The Governor has recommended carrying those same amounts forward into the next state budget.

The League joined the Counties Association in asking JFC to use this budget to restore at least some of the $196 million in cuts to the shared revenue program that have occurred over the last 14 years. The committee rejected along party lines a motion made by the Democrats to increase shared revenue funding by $37 million. 

Computer Aids.  JFC approved a budget amendment modifying the current formula for calculating computer aid payments. The amendment continues the payments, but eliminates the reporting requirements for businesses. Under the budget amendment, in July 2018 each municipality will receive an aid payment equal to the payment it received in July, 2017, multiplied by 1.0147. In 2019 and each year thereafter, each municipality will receive an aid payment equal to the previous year's payment increased by the change in the inflation rate.  
JFC Retains Governor's Levy Limit Adjustment Requirement when Payments on Pre-2005 Debt are Reduced  

Earlier today JFC declined to change the Governor's budget recommendation with regard to the l evy limit negative adjustment requirement whenever debt service payments are reduced on debt issued prior to 2005.  Section 985 of AB 64, the state budget bill, repeals the last sentence of sec. 66.0602(2m)(a), eliminating an exception to the requirement that communities reduce their allowable levy by any decrease in debt service for debt issued before July 1, 2005 (negative adjustment). This change will have a significant adverse impact on some municipal budgets.  

Since the 2011-2013 state budget the levy limit law has required that whenever a municipality's debt service payments on any GO debt issued before July 1, 2005 is reduced from the previous year, the municipality must reduce its allowable levy by the same amount. In the 2013-2015 state budget, legislators created an option for communities to avoid the negative adjustment for reduced payments on debt issued prior to July 1, 2005. Under the exception, in any year that a municipality doesn't carry forward unused levy capacity the negative adjustment for reduced payments on debt issued prior to 2005 doesn't apply.  Governor Walker's 2017-2019 budget proposal eliminates this incentive for municipalities to not carry forward unused levy capacity from the prior year. 

The League and the Counties Association urged the committee to delete this change in current law.  JFC chose not to do so.   
JFC Passes Budget Amendment Sought by League on Public Fire Protection Fees

Today, the Joint Finance Committee unanimously passed a budget amendment relating to levy limits sought by the League and the Wisconsin Rural Water Association.  The amendment clarifies that the term
"fire protection," as used in the levy limit law, does not include the public fire protection fee that municipal water utilities must charge to pay for the extra capacity of the water system to provide the high flows and pressures needed to fight fires.  

This change will allow municipalities and their water utilities to apply the public fire protection fee as a direct charge on customer water bills without a negative levy limit adjustment. 

The League thanks Sen. Howard Marklein (R-Spring Green) and Rep. Mark Born (R-Beaver Dam) for authoring the budget amendment on our behalf.
Public Hearing Next Week on Bill Repealing Personal Property Tax

The Senate Committee on Revenue, Financial Institutions and Rural Issues is holding a public hearing on SB 218, repealing the personal property tax and creating a state aid program to reimburse municipalities for the lost revenue.  

The hearing is scheduled for 9:00 a.m. on Wednesday, May 24th in the State Capitol.