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DOR Sticking by New ERP Budget Worksheet Requirements,
but Allowing for Adjustments to Ensure Communities Don't Lose Payments
As we reported in the
August 11 Capitol Buzz, the Department of Revenue (DOR) has changed its interpretation of how the Expenditure Restraint Program (ERP) budget worksheet must be completed.
DOR is now requiring that line 1 of the ERP Budget Worksheet, where total general fund budget expenditures are reported, must include all of a community's property tax levy even if the community has created other special funds separate from the general fund and directly allocated property tax levies into those segregated funds.
Where things currently stand. I spoke with DOR Secretary Rick Chandler and Assistant Deputy Secretary Mike Wagner yesterday and further advocated against DOR making this change. The Secretary politely, but firmly defended the department's decision and made it clear that DOR would not change its new interpretation on how communities must complete the ERP budget worksheet.
DOR Being Flexible. At the same time, the Secretary emphasized that D
OR wants to avoid disqualifying communities from receiving their ERP payments because of this new interpretation. To avoid disqualification DOR is asking communities that are for the first time being required to report all of their property tax levy on line 1 of the worksheet, t
o also adjust the prior year's ERP budget worksheet (i.e., the base year). Indeed, communities that have responded to DOR's request to redo their 2016 ERP budget worksheet consistent with DOR's new interpretation have been informed that they remain eligible to receive an ERP payment in 2017 even if their adjusted worksheet shows they exceeded the budget growth threshold. Several communities have called the League office to confirm that DOR is being flexible and working with them on making adjustments to their current and prior ERP worksheets to ensure that they do not lose out on their 2017 or future ERP payments.
We understand, however, that this transition year might be the only year in which DOR allows communities
to make adjustments to their 2015 and/or 2016 worksheets to ensure that the community qualifies for a future ERP payment.
We will continue to talk with DOR and try to convince them to reconsider their new interpretation of ERP law, but in the mean time we recommend
that all communities affected by DOR's new interpretation communicate with DOR staff and take advantage of the flexibility the department is offering to make adjustments to ERP worksheets during this transition year.
If you have questions about ERP and DOR's new interpretation, contact:
Andrea Newman Wilfong, DOR,
Valeah Foy, DOR,
(608) 261-5360
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Reminder: State Law Requires Additional Information to Be Placed on 2016 Property Tax Bills
As you may recall, the last state budget bill, 2015 Wisconsin Act 55, included a provision requiring communities to place more information on property tax bills.
Under Wis. Stats. sec. 74.09(3)(db), the property tax bill must indicate the total amount of tax levied by a taxing jurisdiction on all property of the taxing jurisdiction and on the property for which the bill is prepared that is the result of a referendum to exceed, on a non-permanent basis, revenue and/ or levy limits for technical colleges, school districts, municipalities, towns and the county. In addition, the bill must indicate, "the year in which the authorization to exceed the limit no longer applies." This change first applied to approved referendums after December 31, 2014 and to property tax bills sent in December 2015. However, the League was instrumental in obtaining a one-year waiver from the requirement for most municipalities.
So, for almost all communities the new requirement first applies to the 2016 property tax bill.
Recently, DOR sent the following information to clerks on the 2016 property tax bill:
Referenda/Resolution Information
Within the 2015-2017 budget (2015 Wisconsin Act 55), the state created sec. 74.09(3)(db), Wis. Stats., requiring the items listed below be displayed on Wisconsin property tax bills for each county, municipality, school district and technical college that has a temporary increase in tax levy approved after December 31, 2014 by referendum or resolution (for Towns with a population under 3,000):
Display these items
- Total amount of temporary increase - the total amount levied in the current year in the municipality due to the temporary increase
- Total amount of increase applied to the property - this amount must be calculated (see below)
- Year increase no longer applies
- Note: Each referendum or resolution must be listed separately
Requirements for Counties/School Districts/Technical Colleges
- Report your referenda data in a separate section on the 2016 apportionment forms. Note: All of the 2016 apportionment forms were updated to assist with apportioning the referenda amounts to the applicable municipalities.
- Report to municipalities:
- o Total current year tax levy (same process as prior years)
- o For each referendum - total amount of tax levy applied to the municipality and the year it no longer applies
Requirements for Municipalities
- On DOR's Property Tax Forms webpage, complete Form PA-687: Property Tax Bill - Referenda/Resolution Data
- For the county, school district, and technical college, enter the referenda information they provided
- For your municipality, enter any applicable referenda or resolution information
- Enter the Total Final Assessed Value (Real Estate and Personal Property), including Equated Manufacturing property for each district
- Note: The tax rates automatically calculate
- Provide the completed form to your County Treasurer
2016 Property Tax Bills
The following changes were made to the property tax bill backer, which is available on our
Property Tax Bills webpage:
- Updated DOR contact information
- Added an explanation for the new referenda/resolution section
Note: The updated backer must be used for 2016 property tax bills
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