Macco Supports Sales Tax: Leaves Legality To The Courts To Decide

A Northeast Wisconsin lawmaker is among a group of officials urging the Brown County Taxpayers Association(BCTA) to drop its lawsuit against the County’s recently enacted 0.5 percent sales tax. Brown County Executive Troy Streckenbach was joined by dozens of local government and business officials, urging the group to drop the suit.

The suit, filed by the Wisconsin Institute for Law and Liberty on behalf of the BCTA, alleges that the tax is illegal because it does not have as its direct purpose reducing the property tax levy but instead pays for construction projects that otherwise would have been funded with bonding. The suit seeks a temporary injunction stopping collection of the tax, which began Jan. 1.

Republican State Representative John Macco is among the officials defending the tax.  Macco issued a news release Monday saying he “supports Brown County Leadership:”

“I have the utmost faith and respect for our local leaders. The path put forward by County Executive Troy Streckenbach protects taxpayers by keeping property taxes down and updating our county’s infrastructure. I believe the County Board was transparent in the process and prudent in not having to rely on a county option sales tax for basic county services.”

 

“I commend any group of citizens fighting to decrease our horrendous tax burden. Any frivolous or superflous spending should be questioned. But our county did a quality job in responding specifically to our vertical construction needs. The plan presented protects taxpaypers and continues to move our county forward.”

But when asked by Media Trackers Tuesday, Macco said he could not say whether the tax is, in fact, legal: “I’m not an attorney, we’ll find that out in the courts(It should be noted that Monday’s presentation was an effort to convince BCTA to stop court action).”

Macco said that while he couldn’t assess the legality of the tax, he has faith that county officials did their due diligence in enacting it. And he called the BCTA disingenuous for not raising legal issues before the tax was enacted.  Wisconsin Institute for Law and Liberty’s(WILL) Rick Esenberg says Macco’s approval of the project’s is irrelevant to the legal issues surrounding creating of the tax:

He’s saying he likes the spending; he thinks Brown County should be spending money on these projects. And maybe he’s right. Maybe these are great projects. That’s not what this lawsuit is about. This lawsuit is about. This lawsuit is about whether they financed them in the right way. We think they financed them in the wrong way. They used the sales tax for something they’re not permitted to use it for. And I think there is a reason the legislature did this.

 

When they gave counties this revenue enhancing tool, they didn’t want them to use it to ratchet up spending. This was not supposed to be a supplementary source of income. It was supposed to be a source of income counties could use, if they wanted to, to reduce their reliance on property tax.

 

And so go back to Rep. Macco’s statement, what would have been prudent, what would have been in compliance with the law, would have been for the county to shift the property tax burden onto the sales tax. That’s an option the legislature intended to give counties. What the legislature did not intend to give counties was the option to increase spending by adding a sales tax in addition to a maxed out property tax levy, which is precisely what Brown County has done.

The county’s top legal official, David Hemery, was quoted by the Green Bay Press-Gazette as saying the suit could cost the county hundreds of thousands of dollars in legal fees, “especially given the ideological nature of the complaint and the fact that WILL is funding the venture. Esenberg told Media Trackers:

If ideology is that you got to follow the law, then yes I’ll plead guilty to that. If he wants to call that ideological, I guess he can do that. It’s not ideological in the sense that we’re not claiming Brown County can’t do these projects. Brown County can do these projects and the good people of Brown County can decide if that makes sense…our point is you’ve got to follow the law.

Brown County Judge Kendall Kelley has asked to recuse himself because he’s a former member of the BCTA. Assignment of a new judge means the hearing on whether to stop collecting the tax won’t be held until February.

 

Post updated Jan. 12 2018, 12:34 P.M. 

While Macco called the BCTA disingenuous for not raising legal issues before the tax was enacted, a letter sent to the Brown County Board from the BCTA in May did include a reference to a potential legal issue. It read:

  • Does the County Executive’s proposal conform to Wisconsin state statutes?  The relevant State statute reads, in part:  “The county sales and use taxes may be imposed only for the purpose of directly reducing the property tax levy and only in their entirety as provided in this subchapter.” (Wis stats 77.70; emphasis added)  The County Executive’s proposal imposes over 20 million dollars per year in new sales taxes, yet the indicated reduction in property tax levy is trickled in over six years and only reaches 5.9 million dollars in the final year.  Over the six year period, sales taxes are estimated at 147 million dollars.  Property tax levy reduction over that same period of time appears, by the Executive’s own documents, to total about 21 million dollars.  That is 126 million dollars in new taxes.  Is the County Board convinced that, given the language of the statutes, this proposal conforms to the statutes and would survive a court challenge?

The full letter can be found here: BCTA Position on Financing Plan.