Calling the Pewaukee transportation fee an ‘illegal tax,' a manufacturers group has sued the village
VILLAGE OF PEWAUKEE - A lawsuit filed against the village claims that the transportation users fee is unlawful and calls for its termination.
Wisconsin Manufacturers & Commerce filed the suit in Waukesha County Circuit Court on April 7. The claims state that the fee, enacted in September 2021, was made with power beyond the village's legal authority, is unconstitutional and is not authorized by state law.
“Not only are our members seeing costs go up thanks to record-breaking inflation, now they are being hit with an illegal tax that would make matters even worse,” said Scott Manley, executive vice president of government relations, in a press release. “In simple terms, this transportation user fee is just an additional tax on property owners that violates both state law and the constitution’s uniformity clause.”
The transportation users fee is an annual base fee of $15.74, plus an additional usage fee to be billed quarterly that is determined by the number of trips assigned to that particular property. The fee is charged to all residential and commercial properties in the village.
The ordinance states the the usage fee per-trip-rate is $1.28. This equates to an annual charge of $27.84 for a single-family residence, which will be added to the quarterly utility bills that includes water, wastewater and stormwater fees.
Developed properties, like commercial businesses, will be charged based on property use and size of the buildings on the property. The estimated traffic count for these properties is based on a formula determined by the Institute of Traffic Engineers Land Use Code defining the property use to assist in generating the average daily trips for each property, according to the ordinance.
The first bills were seen by residents in October 2021 and again at the beginning of 2022.
WMC's suit claims the Wisconsin Constitution requires the the taxing of property to be uniform for all classes of property, while the village's base fee does not account for property value.
“Local governments have a number of ways to raise additional revenue for their budgets, but they must do it in a way that follows the law,” Manley said. “In this case, Pewaukee is attempting to raise taxes on its residents and business owners with no authority to actually do so.”
WMC is calling for the law to be declared unlawful and become invalid. It is also requesting an injunction prohibiting the village from levying, enforcing or collecting the fee.
Village Attorney Mark Blum declined to speak to a reporter, saying, "We do not comment on pending litigation." The village has 20 days from April 7 to respond to the lawsuit, according to the complaint.
Background on fees
Transportation user fees are a relatively new way to increase revenue to cover road upkeep costs. Pewaukee is not the first to introduce a fee in the state.
Neenah has had a transportation fee since 2018. Its annual base fee is $23, and it brings in an estimated $400,000 annually.
According to a 2020 legal opinion from the League of Wisconsin Municipalities, "the State has not expressly prohibited communities from creating such a utility and imposing such fees."
That could change, though. In February, legislators introduced a bill into committee that would penalize municipalities that enact such fees by forcing them to lower the amounts collected from property taxes by how much they raise from the new fees.
Drew Dawson can be reached at ddawson@jrn.com or (262) 289-1324.
Our subscribers make this reporting possible. Please consider supporting local journalism by subscribing to the Journal Sentinel at jsonline.com/deal.
DOWNLOAD THE APP: Get the latest news, sports and more
This article originally appeared on Milwaukee Journal Sentinel: Pewaukee sued over transportation users fee
