2023 - 2024 LEGISLATURE
LRB-3047/1
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2023 SENATE BILL 301
May 18, 2023 - Introduced by Senators FELZKOWSKI, CABRAL-GUEVARA, JAMES,
QUINN and KNODL, cosponsored by Representatives KURTZ, RODRIGUEZ, VOS,
AUGUST, BORN, ARMSTRONG, BEHNKE, BINSFELD, CALLAHAN, DALLMAN, DITTRICH,
DONOVAN, DUCHOW, EDMING, GREEN, GUNDRUM, GUSTAFSON, HURD, KATSMA,
KITCHENS, KRUG, MAGNAFICI, MAXEY, MICHALSKI, MOSES, MURPHY, MURSAU,
NEDWESKI, O'CONNOR, OLDENBURG, PENTERMAN, PETERSEN, PETRYK, PLUMER,
PRONSCHINSKE, ROZAR, SAPIK, SCHMIDT, SCHRAA, SNYDER, SORTWELL, SPIROS,
STEFFEN, SUMMERFIELD, SWEARINGEN, TUSLER and ZIMMERMAN. Referred to
Committee on Shared Revenue, Elections and Consumer Protection.
1 AN ACT to repeal 49.45 (51), 59.605 (3) (c), 60.85 (1) (f), 66.0602 (3) (a) and (b),
2 66.1105 (2) (d), 70.043, 70.11 (42), 70.47 (15), 70.53 (1) (a), 71.07 (5n) (a) 5. d.,
3 71.28 (5n) (a) 5. d., 76.07 (4g) (a) 11. and 12., 76.69, 79.01 (1), 79.01 (2d), 79.02
4 (3) (e) and 79.036 (2); to renumber 66.0608 (title); to renumber and amend
5 23.0917 (5t), 62.13 (2m) (title), 62.13 (2m) (a), 62.13 (2m) (b), 66.0608 (2),
6 66.0608 (3), 66.0608 (4), 77.51 (12t), 77.70 and 79.02 (3) (a); to amend 8.06,
7 26.03 (1m) (b) (intro.), 33.01 (9) (a), 33.01 (9) (am) 1. and 2., 33.01 (9) (ar) 1.,
8 33.01 (9) (b) 1., 59.52 (25), 59.875 (2) (a), 60.34 (1) (a), 60.85 (1) (h) 1. c., 60.85
9 (1) (o), 61.26 (2), 61.26 (3), 62.09 (9) (a), 62.09 (9) (e), 62.13 (1), 62.13 (2) (b), 62.50
10 (1h), 62.50 (1m), 62.50 (3) (a), 62.50 (3) (am), 62.623 (1), 66.0435 (3) (c) 1. (intro.),
11 66.0435 (3) (g), 66.0435 (9), 66.0602 (1) (am), 66.0607 (1), 66.1105 (2) (f) 1. c.,
12 66.1105 (2) (f) 2. e., 66.1105 (2) (i) 2., 66.1106 (1) (k), 70.02, 70.04 (1r), 70.05 (5)
13 (a) 1., 70.10, 70.119 (3) (c), 70.13 (1), 70.13 (2), 70.13 (3), 70.13 (7), 70.15 (2),
14 70.17 (1), 70.174, 70.18 (1), 70.18 (2), 70.19, 70.20, 70.21 (1), 70.21 (1m) (intro.),
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SENATE BILL 301
1 70.21 (2), 70.22 (1), 70.22 (2) (a), 70.27 (1), 70.27 (3) (a), 70.27 (4), 70.27 (5), 70.27
2 (7) (b), 70.29, 70.30 (intro.), 70.34, 70.345, 70.35 (1), 70.35 (2), 70.35 (3), 70.35
3 (4), 70.35 (5), 70.36 (1), 70.36 (2), 70.43 (2), 70.44 (1), 70.47 (7) (aa), 70.49 (2),
4 70.50, 70.52, 70.65 (2) (a) 2., 70.65 (2) (b) (intro.), 70.68 (1), 70.73 (1) (b), 70.73
5 (1) (c), 70.73 (1) (d), 70.84, 70.855 (1) (intro.), 70.855 (1) (a), 70.855 (1) (b), 70.995
6 (1) (a), 70.995 (4), 70.995 (5), 70.995 (7) (b), 70.995 (8) (b) 1., 70.995 (12) (a), 71.07
7 (5n) (a) 5. a., 71.07 (5n) (a) 9. (intro.), 71.07 (5n) (a) 9. a., 71.07 (5n) (d) 2., 71.07
8 (6e) (a) 5., 71.07 (9) (a) 3., 71.17 (2), 71.28 (5n) (a) 5. a., 71.28 (5n) (a) 9. (intro.),
9 71.28 (5n) (a) 9. a., 71.28 (5n) (d) 2., 71.52 (7), 73.01 (5) (a), 76.02 (1), 76.03 (1),
10 76.07 (2), 76.07 (4g) (a) 10., 76.07 (4g) (a) 13., 76.125 (1), 76.24 (2) (a), 76.31,
11 76.82, chapter 77 (title), 77.04 (1), 77.54 (20n) (d) 2., 77.54 (20n) (d) 3., 77.54
12 (57d) (b) 1., subchapter V (title) of chapter 77 [precedes 77.70], 77.71, 77.73 (2),
13 (2m) and (3), 77.75, 77.76 (1), 77.76 (2), 77.76 (3), 77.76 (4), 77.77 (1) (a), 77.77
14 (1) (b), 77.77 (3), 77.78, 77.84 (1), 78.55 (1), 79.015, 79.02 (2) (b), 79.035 (title),
15 79.035 (4) (c) 2., 79.035 (4) (d) 2., 79.035 (4) (e) 2., 79.035 (4) (f) 2., 79.035 (4) (g),
16 79.035 (4) (h), 79.035 (4) (i), 79.035 (5), 79.035 (6), 79.035 (8), 79.05 (2) (c), 79.05
17 (3) (d), 119.04 (1), 174.065 (3), 256.15 (4m) (d), 256.15 (8) (b) 3., 815.18 (3) (intro.)
18 and 978.05 (6) (a); to repeal and recreate 62.50 (3) (title), 79.035 (5) and
19 79.036 (1) (intro.); to create 13.94 (1) (w), 13.94 (1) (x), 13.94 (1) (y), 13.94 (1s)
20 (c) 1m., 13.94 (1s) (c) 1s., 23.0917 (5t) (b), 25.17 (1) (jf), 25.491, 59.875 (2) (c),
21 59.875 (4), 59.90, 60.85 (5) (j), 62.623 (3), 62.625, 62.90, 66.0144, 66.0145,
22 66.0441, 66.0608 (title), 66.0608 (1) (fm), 66.0608 (2m), 66.1105 (5) (j), 66.1106
23 (4) (e), 70.015, 70.111 (28), 70.17 (3), 70.995 (5n), 71.07 (5n) (a) 9. c., 71.28 (5n)
24 (a) 9. c., 73.03 (77), 76.025 (5), 76.074, 77.51 (12t) (a) to (c), 77.70 (2), 77.701,
25 77.76 (3r), 79.036, 79.037, 79.038, 79.039, 79.0965, 101.02 (7y), 115.385 (1) (e),
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1 115.385 (1g) (g), 118.124, 252.03 (2j), 256.15 (1) (ij), 256.15 (4) (a) 4., 256.15 (8)
2 (bm), 256.15 (8) (fm), 256.15 (10m), 256.35 (3s) (bm) 5. and 706.05 (2m) (b) 3.
3 of the statutes; and to affect Laws of 1937, chapter 201, section 1 (4), Laws of
4 1937, chapter 201, section 14A, Laws of 1937, chapter 201, section 21, Laws of
5 1937, chapter 396, section 1 (3) (b), Laws of 1937, chapter 396, section 1 (4) (e)
6 2m., Laws of 1937, chapter 396, section 15 (1) and Laws of 1937, chapter 396,
7 section 16A; relating to: county and municipal aid; imposing a city sales tax
8 and an additional county sales tax to pay the unfunded actuarial accrued
9 liability of city and county retirement systems; requiring newly hired city and
10 county employees of certain city agencies and counties to be enrolled in the
11 Wisconsin Retirement System; fire and police commissions of first class cities;
12 eliminating the personal property tax; reporting certain crimes and other
13 incidents that occur on school property or school transportation; advisory
14 referenda; local health officers; local public protection services; exceptions to
15 local levy limits; local regulation of certain quarry operations; emergency
16 services; local approval of projects and activities under the Warren
17 Knowles-Gaylord Nelson Stewardship 2000 Program; requiring a referendum;
18 and granting rule-making authority.
Analysis by the Legislative Reference Bureau
This bill modifies shared revenue programs, addresses the retirement systems
of the City of Milwaukee and Milwaukee County, eliminates the personal property
tax, and contains various other provisions described in further detail below.
SHARED REVENUE
Under current law, each county and municipality annually receives county and
municipal aid payments. With certain exceptions, each county and municipality
receives a county and municipal aid payment equal to the amount of the payment the
county or municipality received in 2012. In addition, under current law, a
municipality is eligible to receive an annual expenditure restraint payment if its
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SENATE BILL 301
property tax levy is greater than five mills and if the annual increase in its municipal
budget is less than the sum of factors based on inflation and the increased value of
property in the municipality as a result of new construction. Generally, the amount
appropriated for the expenditure restraint program has not changed since 2003. In
addition, current law provides state aid payments to counties and municipalities to
compensate for certain property tax exemptions and for public utilities located in the
county or municipality. Finally, current law provides state aid payments to
municipalities that provide municipal services to state facilities.
The bill creates a trust fund designated as the local government fund. In 2024,
counties and municipalities will receive a county and municipal aid payment equal
to the amount of the payment received by the county or municipality in 2012. In
subsequent years, a county or municipality will receive a county and municipal aid
payment equal to the amount credited to the county and municipal aid account of the
local government fund multiplied by the proportion of the total of county and
municipal aid payments that the county or municipality received in 2024.
Also, beginning in 2024, the bill provides supplemental aid to counties and to
cities, villages, and towns. The bill specifies separate formulas for distributing this
supplemental county and municipal aid in 2024 for each of the following groups: 1)
counties; 2) municipalities with less than 5,000 in population; 3) municipalities with
between 5,000 and 30,000 in population; and 4) municipalities with over 30,000 in
population. Under the bill, each municipality receives a supplemental county and
municipal aid payment equal to at least 10 percent of municipality's county and
municipal aid payment. In subsequent years, a county or municipality will receive
a supplemental county and municipal aid payment equal to the amount credited to
the supplemental county and municipal aid account of the local government fund
multiplied by the proportion of the total of supplemental county and municipal aid
payments that the county or municipality received in 2024. The supplemental
county and municipal aid may be used only for law enforcement, fire protection,
emergency medical services, emergency response communications, public works,
and transportation.
Under the bill, grants received from the state or from the federal government
for the purpose of providing law enforcement, fire protection, and emergency medical
services are excluded from being considered in determining eligibility for an
expenditure restraint program payment. Under current law, a municipality is
eligible to receive an expenditure restraint program payment if its property tax levy
is greater than five mills and if the annual increase in its municipal budget, subject
to certain exceptions, is less than the sum of factors based on inflation and the
increased value of property in the municipality as a result of new construction.
The bill also creates a program to provide innovation grants to counties and
municipalities that apply for such grants. The innovation grants are awarded to
counties and municipalities that submit an innovation plan to transfer certain
county or municipal services to a county, municipality, nonprofit organization, or
private entity, and to be approved, a plan must realize a projected savings of at least
10 percent of the total cost of providing the service. The bill specifies that transfers
of the following services or duties are eligible for receiving an innovation grant:
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SENATE BILL 301
public safety, fire protection, emergency services, courts, jails, training,
communications, information technology, administration, public works, economic
development, tourism, public health, housing, planning, zoning, parks, and
recreation. To be awarded a grant under the bill, a county or municipality must enter
into an agreement or contract to transfer services or duties to a county, municipality,
nonprofit organization, or private entity, and the agreement or contract must 1)
specify the services or duties to be transferred; 2) transfer those services or duties
for a minimum period of time specified in the bill; 3) indicate the cost of performing
those services or duties in the year immediately preceding the transfer; and 4) specify
the cost of performing those services or duties for the entire term of the agreement
or contract. Innovation grant payments may be made beginning in the fiscal year
after the Department of Revenue promulgates rules to administer the program and
the two following fiscal years. DOR must annually submit a report to the Joint
Committee on Finance concerning all grants awarded and must audit 10 percent of
the grants awarded. Municipalities with a population of 5,000 or less may apply for
a separate innovation planning grant to use only for staffing and consultant
expenses for planning the transfer of local government services.
The bill also makes the following changes regarding payments to local
governments:
1. Requires the Department of Administration to make aid payments to taxing
jurisdictions to compensate them for the loss of property tax revenue due to the
repeal of the remaining personal property tax, discussed in further detail below.
Under current law, DOA makes payments to taxing jurisdictions for certain personal
property that is exempt from local property taxes to compensate them for the
corresponding loss of property tax revenue.
2. Eliminates grants made to local government units through the Medical
Assistance program for providing transportation for medical care.
MILWAUKEE CITY AND COUNTY RETIREMENT SYSTEMS
The bill authorizes a first class city and a county in which a first class city is
located to impose sales and use taxes, the revenue from which must be used to pay
the unfunded actuarial accrued liability of the city and county retirement systems
and to increase public safety services. The bill also requires newly hired employees
of a city, city agency, or county, if the city or county imposes the taxes, to be enrolled
in the Wisconsin Retirement System, closes the Employes' Retirement System of the
City of Milwaukee and the Milwaukee County Employes' Retirement System to new
employees, prohibits the city or county from creating a new retirement system, and
prohibits the city or county from changing the benefits of employees that remain
enrolled in the two systems. The bill also makes several changes to the statutes
governing the fire and police commission (FPC) of a first class city, presently only the
City of Milwaukee.
Sales and use tax
Under current law, a county may impose a sales and use tax at the rate of 0.5
percent of the sales price of tangible personal property, goods, and services sold or
used in the county. The tax may be imposed only for the purpose of reducing the
property tax levy.
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Under the bill, a county in which a first class city is located (currently,
Milwaukee County) may impose an additional sales and use tax at a rate not
exceeding 0.375 percent of the sales price of tangible personal property, goods, and
services sold or used in the county. Under the bill, DOR keeps 1.75 percent of the
revenue from the additional tax for administrative expenses. The bill requires that
the remaining revenue be used to pay the unfunded actuarial accrued liability of the
county's retirement system and for public safety services. Under the bill, the tax does
not take effect unless it is approved by the voters in the county at a referendum and
the county chooses to join the WRS for all its new employees.
The bill also allows a first class city to impose a sales and use tax at a rate not
exceeding 2.0 percent of the sales price of tangible personal property, goods, and
services sold or used in the city. Under the bill, DOR keeps 1.75 percent of the
revenue from the additional tax for administrative expenses. The bill requires that
the remaining revenue be used to pay the unfunded actuarial accrued liability of the
city's retirement system and for public safety services. Similar to the tax imposed
by the county, the tax imposed by the city does not take effect unless it is approved
by the voters in the city at a referendum and the city chooses to join the WRS for all
its new employees.
The bill also requires the county and city to annually submit a report to JCF
detailing how the tax revenues were spent in the previous year. In addition, the bill
requires the Legislative Audit Bureau to conduct a financial audit of the taxes
imposed by the county and city once every five years, to annually conduct a financial
audit of the retirement systems of the county and city, and to, at least every five
years, contract to audit the actuarial performance of those retirement systems.
Under the bill, if in any year the county or city does not make the required
contribution to the unfunded actuarial accrued liability of its respective retirement
system, DOR will reduce the amount of the county's or city's shared revenue payment
by the amount of the unpaid contribution and pay that amount towards the unfunded
actuarial accrued liability. Also, if in any year the county or city uses the sales tax
revenue for a purpose not authorized under the bill, DOR will reduce the shared
revenue payment to the county or city, as appropriate, by the amount of the
unauthorized expenditure.
Under the bill, the sales tax is no longer imposed after the county or city has
paid in full the unfunded actuarial accrued liability of its respective retirement
system.
Under current law, Milwaukee County and the City of Milwaukee each operate
their own retirement systems, providing retirement benefits to individuals
employed by the county or city. The bill requires that employees initially hired by
Milwaukee County or the City of Milwaukee after December 31 in the year the
county adopts an ordinance to impose a 1 percent sales and use tax and elects to join
the WRS are covered under the WRS and not the county's or city's retirement system.
Provisions applicable to city of Milwaukee and Milwaukee County
In addition, the bill provides certain requirements or limitations for a city or
county that is authorized to impose the sales tax under the bill. Among these
requirements and limitations that apply to a first class city are: