City of Milwaukee v. Lindner

• Decision Date: 28 October 1980
• Docket Number: No. 80-1643-OA,80-1643-OA
• Citation: 98 Wis.2d 624,297 N.W.2d 828
• Parties: CITY OF MILWAUKEE, a Municipal Corporation; City of Madison, a Municipal Corporation; City of Eau Claire, a Municipal Corporation; Village of Black Earth, a Municipal Corporation; City of Cumberland, a Municipal Corporation; City of Marshfield, a Municipal Corporation; City of Monroe, a Municipal Corporation; City of West Bend, a Municipal Corporation, Petitioners, v. Kenneth E. LINDNER, Secretary of the Department of Administration, State of Wisconsin; Department of Administration, State of Wisconsin; Mark E. Musolf, Secretary of the Department of Revenue, State of Wisconsin; Department of Revenue, State of Wisconsin, Respondents.
• Court: Wisconsin Supreme Court

Page 828

297 N.W.2d 828

98 Wis.2d 624

CITY OF MILWAUKEE, a Municipal Corporation; City of Madison a Municipal Corporation; City of Eau Claire, a Municipal Corporation; Village of Black Earth, a Municipal Corporation; City of Cumberland, a Municipal Corporation City of Marshfield, a Municipal Corporation; City of Monroe a Municipal Corporation; City of West Bend, a Municipal Corporation, Petitioners, v. Kenneth E. LINDNER, Secretary of the Department of Administration, State of Wisconsin; Department of Administration, State of Wisconsin; Mark E. Musolf Secretary of the Department of Revenue, State of Wisconsin; Department of Revenue, State of Wisconsin, Respondents.

No. 80-1643-OA.

Supreme Court of Wisconsin.

Argued Oct. 17, 1980.

Decided Oct. 28, 1980.

James B. Brennan, City Atty., Thomas E. Hayes, Deputy City Atty., Milwaukee, argued for petitioners; Henry A. Gempeler, City Atty., and John E. Rothschild, Asst. City Atty., on brief for city of Madison;Frederick W. Fischer, on brief for city of Eau Claire; John N. Kramer, Village Atty., Fennimore, on brief for village of Black Earth; Daniel D'Amico, City Atty., on brief for city of Cumberland; John H. Stauber, City Atty., on brief for city of Marshfield; William J. Schmitz, City Atty., on brief for city of Monroe and Thomas O'Meara, Jr., Acting City Atty., on brief for city of West Bend.

Gerald S. Wilcox, Asst. Atty. Gen., argued, with whom on the briefs was Bronson C. La Follette, Atty. Gen., for respondents.

Burt P. Natkins, Legal Counsel, and LeRoy A. Lokken, Asst. Legal Counsel, Madison, for League of Wisconsin Municipalities, filed amicus curiae brief.

Daniel T. Kelley and Hansen, Eggers, Berres & Kelley, S. C., Beloit, for Wisconsin Alliance of Cities, Inc., filed amicus curiae brief.

STEINMETZ, Justice.

This court, by order dated September 10, 1980, granted the petitioners' petition for leave to commence an original action for a declaratory judgment with regard to the authority of the secretary of the Department of Administration under sec. 16.50(2), Stats., to reduce shared revenue payments to municipalities. The facts in the case are not in dispute, the parties having filed an "Agreed Statement of Facts" with the court.

The agreed facts will be referred to in the decision.

ISSUE

(1) Does sec. 16.50(1) and (2), Stats., authorize respondents to reduce payments to municipalities under secs. 79.03 and 79.16(3) below amounts appropriated by the legislature for distribution to all municipalities on November 17, 1980?

STATEMENT OF THE CASE

Under the state budget law for the biennium July 1, 1979, to June 30, 1981, the legislature appointed the sum of $413 million to the "shared revenue account" for distribution to all municipalities in fiscal year 1980-81 pursuant to sec. 79.03(2) and 79.03(4)(f), Stats. ¹ The legislature also appropriated a "sum sufficient" for the personal property tax relief transfer payment to be made in fiscal year 1980-81 to all municipalities pursuant to sec. 79.16(3). ² Under the formula established to determine the sum sufficient, the respondent Department of Revenue has estimated that $57,315,400 would be transferred to the "shared revenue account" for distribution in this fiscal year.

The respondent Lindner, based on the certification of respondent Musolf, is to make a November distribution from the "shared revenue account" pursuant to sec. 79.03, Stats., on the third Monday in November. Under sec. 79.16(3), the personal property tax relief transfer payment is to be distributed to municipalities along with the November distribution of shared revenues. Under current estimates of the respondents, there will be sufficient revenue available in the general fund to make all payments to municipalities in November of 1980 in accordance with appropriations of the legislature for that purpose. Indeed, based upon respondents' estimates, there will be sufficient revenue available in the general fund to meet all expenditures contemplated under appropriations of the legislature during that quarter.

Based in part on revised estimates submitted by respondent Musolf for the fiscal year 1980-81, respondent Lindner has projected a budget deficit for the fiscal year 1980-81 of $145.4 million. This means that under current estimates of the respondents, there will not be sufficient revenue available in the general fund during the second quarter of calendar year 1981 (fourth quarter fiscal 1980-81) to meet all expenditures contemplated by appropriations of the legislature as reflected by the biennium budget. Based upon the projected deficit at the close of fiscal year 1980-81, respondent Lindner has directed a 4.4% reduction to be made in allotments against local tax relief and general purpose revenue appropriations for the fiscal year 1980-81. In implementation of this directive, the respondents intend to apply a uniform 2.1% reduction in the November payments to all municipalities under sec. 79.03(2), Stats., and a uniform 4.4% reduction in the November payments to all municipalities under sec. 79.16(3).

Respondents claim authority to make the aforementioned reduction in the November distribution to all municipalities under sec. 16.50(2), Stats.

The "Municipal and County Shared Tax Account" was established at sec. 79.01 Stats., by ch. 125, Laws of 1971. It was changed into a Shared Revenue System by ch. 29, Laws of 1977.

Ch. 125, Laws of 1971, completely revised the method of sharing state collected taxes with local units of government. Beginning in 1972, the local share of the income taxes, utility taxes, liquor taxes and motor vehicle registration fees were placed in the Municipal and County Shared Tax Account. This account became the "Municipal and County Shared Revenue Account" established at sec. 79.01(2), Stats., ³ by sec. 887, ch. 29, Laws of 1977, and was then funded by a system of fixed appropriations.

Ch. 34, Laws of 1979, made further refinements in the Shared Revenue System. Sec. 79.03(4)(f), Stats., ⁴ was amended to provide that the appropriations to the shared revenue account were fixed at $372 million for 1979-80 and $413 million for 1980-81.

Thus a system whereby local revenue sharing would fluctuate with the rise and fall of state revenues was changed to a system of fixed appropriations. As state revenues increased, greater amounts of funds would be available for other state purposes. As state revenues decreased, lesser amounts of funds would be available for other state purposes.

It is obvious from this legislative history that the Wisconsin legislature introduced a measure of stability in local government revenues by the fixed appropriations of $372 million and $413 million for 1979 and 1980, respectively.

A formula for adjustments for future years was established by ch. 29, Laws of 1977. Beginning in the 1981-82 fiscal year the shared revenues will be adjusted by the annual percentage increase in general fund revenues, with the annual increase of not more than 12% nor less than 5%. Sec. 79.03(4)(c), Stats. ⁵

Elaborate formulae have been established in ch. 79 for distribution of shared revenues in four types of payments: ⁶

(1) Per capita payments

(2) Utility payments

(3) Aidable revenue payments

(4) Minimum guaranteed payments.

The legislature made it clear in the 1979 budget bill at sec. 905m, ch. 34, Laws of 1979, amending sec. 79.03(4)(f), Stats., in making the appropriation to the shared revenue account as to the intent that the moneys provided were to be distributed. The section is stated in mandatory terms: "... In 1979 and 1980 the total amount to be distributed ... shall be $372,000,000 and $413,000,000, respectively." (Emphasis added.)

Sec. 16.50(1) and (2), Stats., reads as follows:

"16.50 Departmental estimates. (1) EXPENDITURES. Each department except the legislature and the courts shall prepare and submit to the secretary an estimate by quarters of the amount of money which it proposes to expend upon each of its divisions, activities, functions and programs. The secretary may waive the submission of estimates of other than administrative expenditures from such funds as he determines. Estimates shall be prepared in such form and at such times as the secretary requires. Revised and supplemental estimates may be presented at any time under rules to be prescribed by the secretary.

"(2) ACTION THEREON BY SECRETARY. The secretary shall examine each such estimate to determine whether appropriations are available therefor and can be made without incurring danger of exhausting such appropriations before the end of the appropriation period and whether there will be sufficient revenue to meet such contemplated expenditures. The secretary also shall examine each estimate to assure as nearly as possible that the proposed plan of program execution reflects the intentions of the joint committee on finance, legislature and governor, as expressed by them in the budget determinations. If satisfied that such estimate meets these tests, he shall approve the same; otherwise he shall disapprove the same, in whole or in part, as the facts require. If the secretary is satisfied that an estimate for any period is more than sufficient for the execution of the normal functions of a department, he may modify or withhold such estimates. It is the intent of the legislature that this section be strictly construed by the secretary to the end that such budget determinations and policy decisions reflected by such determinations be implemented to the fullest extent possible within the concepts of proper management."

Where a statute is unambiguous, the court must give effect to its ordinary and accepted meaning as stated in National Amusement Co. v. Dept. of Revenue, 41 Wis.2d 261, 266, 163 N.W.2d 625 (1969):

"There are some rules of construction which are fundamental to this case. First, when statutory language is clear and unambiguous,

" '... no judicial rule of construction is permitted, and the court...