Legislative Proposal Would End Energy Efficiency Revenue Limit Exemption

In a draft memo being circulated for support from legislative colleagues, state Rep. Adam Neylon (R-Pewaukee) and state Sen. Frank Lasee (R-De Pere), are proposing legislation to end the school district revenue limit exemption for energy efficiency projects.

Currently, a school board may adopt a resolution to increase the revenue limit otherwise applicable to a school district under s. 121.91 (2m), Stats., in any school year by an amount spent by the school district in that school year on a project to implement energy efficiency measures or to purchase energy efficiency products.

The memo from the legislators includes the following rationale:

The provision was modified in 2013 to require that any savings from reducing energy costs be used to reduce debt. This is almost impossible to determine or enforce under current reporting requirements. (WASB NOTE: See DPI Emergency Rule PI-15)

Levy limit exemptions do not serve the property taxpayer, particularly exemptions that are of perhaps dubious benefit. According to DPI’s website, from July 1, 2014 to September 30, 2015, 92 times districts have exceeded the revenue caps under this exemption resulting in $39,944,335. If school districts want to spend additional funds, they should show local voters the benefits of their proposed project and ask for their approval through the use of referenda. This ensures stakeholders, those paying property taxes in the school district, that want to exceed the levy limit, have a say in their taxes being raised.

It also included an analysis of the bill draft from the Legislative bill drafting service agency:

Analysis by the Legislative Reference Bureau

This bill limits the school district revenue limit adjustment for projects to implement energy efficiency measures or to purchase energy efficiency products (energy efficiency projects) to school districts that adopted a resolution before the effective date of the bill.

Current law generally limits the total amount of revenue per pupil a school district may receive from general school aids and property taxes in a school year to the amount of revenue received per pupil in the previous school year. However, there are several exceptions to the revenue limit under current law. Once such exception is for a school district that adopts a resolution to initiate an energy efficiency project. Under current law, a school district’s revenue limit is increased by the amount the school district spends on the energy efficiency project in a school year, including amounts spent for debt service on a bond, note, or state trust fund loan used to finance the energy efficiency project. This bill limits this school district revenue limit adjustment to school districts that adopted a resolution to initiate an energy efficiency project before the effective date of the bill.

WASB is reviewing the bill draft and Delegate Assembly Resolutions and will provide further information when available.