Wauwatosa won't charge property owners based on road use after Supreme Court ruling

After the Wisconsin Supreme Court struck down the town of Buchanan's transportation utility fee, Wauwatosa has paused plans to implement its own.

Similar to ones charged for water and electricity use, a transportation utility is a fee paid by property owners based on the amount of traffic that's generated by their establishments.

In March, city officials presented plans to implement the utility fee that would have funded repairing the city's declining roadways without putting Wauwatosa further in debt, the presentation said.

The common council was set to decide whether to put plans in action this month, but the ruling in the lawsuit between Wisconsin Taxpayers Inc. and the town of Buchanan, a town near Appleton, has halted the process.

If Wauwatosa's transportation utility had been passed this month, property owners would have started seeing fees in 2024.

Court decides Buchanan's transportation utility is an illegal tax

In June, the Wisconsin Supreme Court struck down Buchanan's transportation utility fee after justices found that it violated the town's levy limits.

In 2020, Buchanan collected $855,000 from the utility fee, which caused the town to exceed its property tax levy limit of $2.4 million. This prompted the conservative law firm Wisconsin Institute for Law and Liberty to sue the town on behalf of Wisconsin Property Taxpayers Inc.

"We were proud to stand up and fight this unlawful tax, which was nothing more than an attempt to circumvent levy limits and rake in even more money from those individuals who already fund our local communities," said John Jacobson, WPT's director of government and member relations in a news release.

This decision comes after the League of Wisconsin Municipalities issued an opinion in 2020 in favor of transportation utility fees as long as the distinction between fees and taxes is made.

"Such fees should be segregated and used only for street maintenance and other transportation services," the opinion said.

Wauwatosa pursues other ways to fund aging infrastructure

While Wauwatosa is "pausing its consideration of a transportation utility," staff plans to explore other options to fund its "deteriorating" roads, an announcement on the city's website said.

For example, in the next five years, Wauwatosa will receive over $22 million in direct grant funding from the Wisconsin Department of Transportation for infrastructure improvements.

"For every construction project, we continue to chase after any and all opportunities for these funding sources," the announcement said.

The city also allocated 48%, or $11.8 million, of its American Rescue Plan Act funds to infrastructure.

However, the city still faces an annual budget deficit due to its reliance on property taxes and tax levy limits, which the city called a "broken method."

"Road conditions will continue to deteriorate at rates we can’t keep up," the city's site said.

All scheduled question and answer sessions with the public regarding Wauwatosa's proposed transportation utility have been canceled.

Quinn Clark can be emailed at QClark@gannett.com. Follow her on Twitter @Quinn_A_Clark.

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This article originally appeared on Milwaukee Journal Sentinel: Wauwatosa puts brakes on transportation fee after court decision