Conference Resolution No. 2012-2
Ensuring municipalities receive timely and reliable financial information from the state.

Whereas, city and village officials rely on critical financial information they receive from state government, such as equalized values, net new construction values, WRS contribution rates, shared revenue estimates, and general transportation aid estimates, in order to prepare their annual budgets; and

Whereas, many municipalities begin preparing their annual budgets in the summer; and

Whereas, the statutory publication dates for certain state agency reports critical to municipal budgeting are late summer and fall (e.g. the equalized and net new construction values statutory publication deadline is August 15; the shared revenue estimate is September 15; the exempt computer values is October 1; and the general transportation aids estimate is October 1.)

Whereas, municipalities need to receive these reports, aid estimates, and other financial information earlier in the year; and

Whereas; it is imperative that the state not renege on its funding commitments, which communities rely on to set their budgets; and

Whereas; in recent years the state has not followed through on some funding pledges, requiring municipalities to rely on reserves, make budget transfers, or reduce services. For example, in the spring of 2011, DNR announced that funding for the recycling grant program was $19 million, rather than the $32 million approved in the state budget, resulting in municipalities receiving much less in recycling grants than they had budgeted for.

Now, Therefore, Be It Resolved, that the League of Wisconsin Municipalities in conference assembled on October 18, 2012, urges the Governor and the Legislature to require by law that the Department of Revenue, the Department of Transportation, and other state agencies publish information critical to helping municipalities prepare their annual budgets by at least July 1.

Be it Further Resolved that the League urges the Governor and the Legislature to prohibit state agencies from reneging or reducing grants and aid amounts after municipalities have adopted their budgets in reliance on state agency estimates of future aid or grant amounts.

Conference Resolution No. 2012-3
Treat all municipal employees the same with respect to Wisconsin Retirement System Contributions.

Whereas, under 2011 Wisconsin Act 10 represented police officers and fire fighters may continue to bargain and are therefore potentially exempt from making the same mandatory Wisconsin Retirement System pension contributions Act 10 imposed on other municipal employees; and

Whereas, police and fire departments typically make-up 40 to 65 percent of a municipality’s annual budget; and

Whereas, exempting police and fire from Act 10’s WRS pension contribution requirements makes it very difficult for municipalities to balance their budgets without making significant cuts to other vital services; and

Whereas, the public safety exemption has caused division within the ranks of police and fire departments and between various employee groups; and

Whereas, if the state is going to ask municipal employees to shoulder the impact of the state’s budget deficit, then the burden should fall equally on all municipal employees, including police officers and fire fighters.

Now, Therefore, Be It Resolved, that the League of Wisconsin Municipalities in conference assembled on October 18, 2012, urges the Governor and the Legislature to pass legislation requiring protective service employees to make the same mandatory pension contributions that general municipal employees must make under 2011 Wisconsin Act 10.

Conference Resolution No. 2012-4
Preservation of Tax Exempt Financing
Whereas, municipal bonds are the means by which state and local governments finance the critical infrastructure of our nation, including roads, bridges, hospitals, schools, and utility systems; and

Whereas, under current law the owners of municipal bonds are not required to pay federal income tax on the interest income they receive from the bonds; and

Whereas, this tax exemption is part of a more that century long system of reciprocal immunity under which owners of federal bonds are, in turn, not required to pay state and local income tax on the interest they receive from federal bonds; and

Whereas, this federal tax exemption provides a significant difference between public sector and private sector debt financing; and

Whereas; municipalities benefit from this tax exemption through substantial savings on the interest cost of borrowed money; and

Whereas; the benefit of lower capital costs attributable to tax exempt financing are passed on to property tax payers through reduced rates, greater local investments, or both; and

Whereas; from time to time Congress and the President have proposed legislation to tax – or alter the federal tax exemption of – interest on municipal bonds; and

Now, Therefore, Be It Resolved, that the League of Wisconsin Municipalities in conference assembled on October 18, 2012, opposes any efforts by Congress and this, or any future,

Conference Resolution No. 2012-5
Preservation of Municipal Utility PILOTs
Whereas, state lawallows municipalities to receive payment in lieu of taxes (PILOTs) from municipal water and electric utilities, and PILOTs to municipalities have been authorized since at least 1918; and

Whereas, Public Service Commission (PSC) regulations establish a formula for determining the maximum allowable PILOT for any municipal utility, which is the municipal and school tax rates applied to the gross book value of the plant plus materials and supplies; and

Whereas, under current law the governing body of a municipality owning a public utility has the discretion to determine the appropriate level of PILOTs; and

Whereas, 511 municipal water utilities made PILOT payments totaling $92.9 million in 2011 and 82 municipal electric utilities made PILOT payments totaling $19.3 million in 2011; and

Whereas, on January 25, 2012, the PSC opened an investigation into PILOTs paid by municipal electric and water utilities, and on September 28, 2012 the PSC staff released a draft report concluding that:

• PILOT payments can be a significant component of municipal water utilities’ revenue requirements, averaging 14.9 percent.
• The current method for calculating water utility PILOTs may be a disincentive to replacing aging utility infrastructure and making improvements necessary to ensure adequate service.
• PILOTs for most municipal water systems exceed the amount that they would otherwise pay as a gross receipts tax if they were private for profit utilities.

Whereas, there are several compelling reasons municipal utilities should make PILOTs to their municipalities that were not acknowledged in the PSC staff report, including:

• PILOTs provide historically stable and essential revenue that is used to improve police, fire and other critical public services; lower property tax rates; and pursue other policy goals.
• PILOTs are a way for tax exempt entities to financially contribute towards the cost of municipal services and reduce somewhat the burden on property tax payers.
• Financial risk is deserving of financial reward. Municipalities, as the owners of utilities, should receive a dividend in return for the considerable investment they make and risk they incur in establishing utilities.
• Municipal utility facilities directly benefit from public services provided by municipalities, such as police, fire, and snow plowing.
• Municipal utility facilities are located on land within the municipality that could otherwise be privately developed and the owners paying property taxes.

Whereas, PILOTs and gross receipts taxes are fundamentally different and there is no substantive benefit intrying to skew the outputs so they are reflective of each other.

Now, Therefore, Be It Resolved, that the League of Wisconsin Municipalities in conference assembled on October 18, 2012, opposes any efforts by the PSC, the state Legislature, and the Governor to eliminate or limit PILOTs from municipal water and electric utilities.