LOCAL

Buchanan may get sued over its transportation utility fee

Appleton Post-Crescent

Buchanan's transportation utility fee, which has been used to fund roadway maintenance since 2019, might cause the town to be sued.

BUCHANAN - The Town of Buchanan may face a lawsuit over its transportation utility fee.

The Wisconsin Institute for Law and Liberty filed a notice of claim against the town last month, threatening legal action by Sept. 1.

WILL says the fee is an unlawful tax and, as a result, exceeds the town's property tax levy limit of $2.4 million in 2020.

"The Town of Buchanan is hoping that, by labeling a tax a fee, they can exempt themselves from state law. That is not the case," WILL Deputy Counsel Luke Berg said. "Municipalities can’t make up new fees to evade these limits without authorization."

The town has used the transportation utility fee since 2019 to charge all properties in the town for using its roads. The fee will bring in $854,753 this year.

The town first considered instituting the fee in 2018, when it deemed road drainage as the most significant issue facing the town. According to a town newsletter, the town residents' reports of drainage concerns increased by more than four times from 2014 to 2018.

According to information about the fee on the town's website, the town thought the fee would make costs more equitable between property owners. Since an increase in property taxes wouldn't charge property owners that are tax-exempt. It compared the fee to a water or sewer utility fee, saying that, like other public utilities, the transportation utility fee charges the users of the utility to cover its operating costs.

The town ordinance says the fee will "finance such transportation facilities and related facilities, operations and activities as are deemed by the town to be proper and reasonably necessary to provide safe and efficient transportation facilities within the town."

WILL says the difference between roads and a public utility like water is too great for a fee for road improvements to be considered legal. The group cited the state statute that allows for utility fees to be charged in its notice of claim, pointing out that the only public utilities stated in the statute are "heat, light, water or power."

Buchanan Town Administrator Maggie Mahoney declined to comment on WILL's notice of claim.

This year, Buchanan will charge single-family properties $315.29, and nonresidential properties from $189 to $8,400, based on how much road use the property might generate.

Other Fox Cities communities have fees or special taxes to help pay for street projects. In Appleton, residents are charged $20 for a wheel tax. In Neenah, the city's transportation fee charges homeowners $23 annually.

WILL criticized Buchanan's method of issuing the fee by determining how much revenue it wants to generate, instead of how much its roads are used.

WILL is also worried that, because this method assigns higher fees to properties that generate more usage of roads, the fee will cause an unfair financial strain on small businesses.

Without the transportation utility fee, the town would have to pass a referendum to increase its property tax levy, rework its budget to add money for street improvement projects or use special assessments for them.

In 2019, more than half of Buchanan voters in an advisory referendum about their preferred means to fund street improvement projects chose a transportation utility fee over special assessments or a property tax increase.

"Special assessments aren't very popular, but I think it would be legal," Berg said. "And if that's the only way Buchanan can pay for its roads, then so be it."

Contact Roshaun Higgins at 920-205-1154 or rhiggins@gannett.com. Follow him on Twitter at @row_yr_boat.