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    Tax procedure provisions unconstitutional, Wisconsin Supreme Court rules

    Joe Forward
    Legal Writer

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    March 29, 2011 – Municipalities cannot block de novo review of tax assessment decisions by assessment review boards, the Wisconsin Supreme Court majority recently held in a 4-3 decision.

    Tax procedure provisions unconstitutional, Wisconsin Supreme Court rules

    Supreme court majority rules that municipalities cannot opt-out of statutory provisions that give taxpayers a right to de novo review of tax assessment decisions.

    By org jforward wisbar Joe Forward, Legal Writer, State Bar of Wisconsin

    Tax procedure provisions unconstitutional, 
Wisconsin Supreme Court rules March 29, 2011 – Municipalities cannot block de novo review of tax assessment decisions by municipal tax assessment review boards, the Wisconsin Supreme Court majority recently held in a 4-3 decision.

    In 2008, the Wisconsin Legislature passed 2007 Wis. Act 86, which allowed municipalities to adopt ordinances that prevent de novo review of tax assessment decisions by review boards but created a new form of circuit court review, “enhanced certiorari review.”

    Before 2008, taxpayers could challenge tax assessment decisions through de novo review or common law certiorari review. De novo review allows courts to review decisions independently of the record established by the tax assessment review board. Under common law certiorari review, circuit courts are limited to a review of the record already established.

    Enhanced certiorari review under Act 86 gave taxpayers additional rights associated with the review board proceedings, like a 60-day extension of the initial hearing date, but still limited the circuit court’s independence upon review of the review board’s decision.

    The City of Milwaukee’s Common Council unanimously adopted an “opt-out” ordinance in April 2008. Three months later, Metropolitan Associates filed a class action lawsuit against the City of Milwaukee, challenging the constitutionality of the “opt-out” provisions of Act 86.

    In Metropolitan Associates v. City of Milwaukee, 2011 WI 20 (March 25, 2011), the Wisconsin Supreme Court majority – in an opinion written by Justice Michael Gableman – ruled that Act 86’s opt-out provisions violate the Equal Protection Clauses of the Wisconsin and U.S. constitutions.

    Specifically, the majority ruled that taxpayers in opt-out municipalities receive significantly different treatment than taxpayers in other municipalities and the difference in treatment lacks a rational basis.

    Chief Justice Shirley Abrahamson filed a dissenting opinion, joined by Justices Ann Walsh Bradley and N. Patrick Crooks. The State Bar’s Taxation Law Section filed an amicus brief in the case, supporting the position of Metropolitan Associates.

    Nankin revisited 

    In the 2001 case of Nankin v. Village of Shorewood, 2001 WI 92, 245 Wis. 2d 86, 630 N.W.2d 141, the supreme court struck down a provision that prevented taxpayers in counties of 500,000 or more from seeking de novo review of tax assessment decisions.

    Preventing taxpayer access to de novo review solely based on population, the court ruled in Nankin, unconstitutionally denied those taxpayers equal protection of the laws.

    In Nankin, the court reviewed the difference between de novo review and common law certiorari review to determine the law’s constitutionality. Here, the majority reviewed the difference between de novo review and enhanced certiorari review under Act 86.

    Applying the same three-step analysis applied in Nankin, the supreme court majority ruled in Metropolitan Associates that Act 86’s opt-out provisions violate a taxpayers right to equal protection of the laws because they treat a distinct class of citizens differently than others similarly situated, and no rational basis exists for the different treatment.

    “While Act 86 requires opt out municipalities to grant their taxpayers additional rights during Board of Review proceedings, Act 86 limits both the type and scope of circuit court review these taxpayers may seek,” Justice Gableman wrote.

    In addition, the majority noted that under enhanced certiorari review, circuit courts must presume a review board’s assessment is correct absent a “sufficient showing” of incorrectness.

    “Even with the additional rights granted under Act 86, the Board of Review proceedings continue to favor municipalities over taxpayers, just as they did in Nankin,” Justice Gableman wrote. “For one, the sixty-day hearing date extension under Act 86 runs the risk of forcing complex property disputes into being heard much more quickly than such disputes would typically be heard in a de novo action.”

    Thus, it ruled that all of Act 86’s modifications to Wis. Stat sections 70.47, 73.03, and 74.37 are unconstitutional, but severable from other provisions of Act 86.

    The State Bar’s Taxation Section filed its amicus brief under a similar view, noting that in some complex cases, “the compressed and relatively informal [Board of Review] procedures simply do not afford taxpayers the opportunity fully to develop and present their case at the [Board of Review] stage to assure judicial review is based upon a full and fair record.”


    In her dissent, Chief Justice Shirley Abrahamson concluded that “treatment of taxpayers in ‘opt-in’ districts under 2007 Wis. Act 86 is not significantly different from the treatment of taxpayers in taxation districts operating under Wis. Stat. section 74.37(3)(d).”

    Even if taxpayers are treated differently, she argued, “a rational basis exists for enabling taxing districts to determine whether to enact an ordinance to ‘opt-in’ under 2007 Wis. Act 86.” She noted that unlike Nankin, the classification is not based on county population.

    “A legitimate purpose of this law is to increase the efficiency of the tax assessment challenge process for taxpayers and taxation districts,” Chief Justice Abrahamson wrote. “Put simply, there is a legitimate government interest in efficiently handling tax assessment challenges.”

    Abrahamson argued that taxpayers unhappy with a municipality’s decision to opt-in have recourse at the ballot box.


    Alan Marcuvitz, Robert Gordon, and Andrea Roschke of Michael Best & Friedrich LLP, Milwaukee, represented Metropolitan Associates. City of Milwaukee Attorney Grant Langley and Vincent Moschella, deputy city attorney, represented the City of Milwaukee.