GREEN BAY, Wis. (WBAY) - The Brown County Taxpayers Association and a Brown County resident are suing to stop the county's 0.5% sales tax that went into effect on New Year's Day.
The lawsuit filed in Brown County Circuit Court on Tuesday is seeking a court injunction to stop collection of the 0.5% sales tax and to declare the tax "void and unenforceable."
The suit alleges the sales tax is illegal because it's intended to raise money for specific projects, including public safety, roads and infrastructure, the jail and mental health programs, a morgue, the expo center, county parks and fairground, library, and a STEM research center.
Plaintiffs argue state law lets counties raise a county sales tax to reduce property taxes.
The Brown County Taxpayers Association said in a written statement on Wednesday that the matter should have gone to a referendum.
"We disagree with the way in which this was rushed through the approval process. The County Executive announced his sales tax plan on May 2 and the County Board rushed to approve it on May 17, with one of the county's listening sessions scheduled for Mother's Day. During that approval process, numerous misrepresentations were made regarding how much of the sales tax is paid by non-residents. We asked county leadership to put this matter to a referendum which would have enabled thorough discussion and investigation of the proposal, but county leadership was not willing to permit the citizenry to weigh in on the matter. They were in a hurry to get their arms around that revenue stream of $147 million. We are convinced that if this matter had gone to referendum, it would have been rejected. We want the law followed and believe that is not happening," said Rich Heidel, President of the Brown County Taxpayers Association.
A state attorney general's opinion in 1998 says the sales tax can also pay for new spending in lieu of raising property taxes. According to the lawsuit, that opinion has never been tested in court and wouldn't apply in Brown County because the county is already near its tax levy cap so it couldn't raise property taxes anywhere near that amount.
However, county leaders say the taxpayers association isn't seeing the whole picture, that it is lowering property taxes by not putting the bill on just Brown County residents.
The county says by generating $147 million over six years using this half-percent sales tax, they get to use money spent by visitors to Brown County to help fund these projects, and while it is in effect the property tax rate remains the same.
The county warns if the half-percent sales tax goes away, it would mean more out of pocket for Brown County property owners.
"If the sales tax is not funding those projects, we would have to bond for those projects. That would be taking out a credit card for $225 million in debt. That would cost us an estimated $40 million in interest payments alone," Brown County Corporation Counsel David Hemery said.
"The projects have to be paid for. They are approved, and we will move forward, but you have to look at best financial choice on how to pay for it: Use a half-percent sales tax, or do you send it all back to the property tax rolls? It gets that simplistic when you get into legal, but that is what it comes down to. Either we pay cash or put it back on the property tax rolls of the people of Brown County and pay interest," County Supervisor Patrick Evans said.
The taxpayers association says its more than 100 dues-paying members, including businesses and individuals and fellow plaintiff Frank Bennett of Green Bay, are financially harmed by the "unlawful county sales tax."
The county and state Revenue Secretary Richard Chandler are named as defendants. They have 45 days to respond to the lawsuit.
Online court records show no hearings have been scheduled yet on the lawsuit.