Watch Oral Arguments in Important TIF Case Before Supreme Court
Recorded by WisconsinEye
League of Wisconsin Municipalities
By Claire Silverman, Legal Counsel, League of Wisconsin Municipalities
Last Friday, the Wisconsin Supreme Court heard oral arguments in Voters with Facts v. City of Eau Claire, a case that has the potential to affect Wisconsin’s Tax Increment Financing (TIF) law, Wis. Stat. § 66.1105. The League of Wisconsin Municipalities filed a joint amicus brief with the Cities of Milwaukee and Madison, and the Wisconsin Towns Association in this case. Amicus briefs were also filed by the Wisconsin Department of Justice, the Eau Claire Area Chamber of Commerce, and jointly by the Wisconsin Realtors Association, NAIOP-WI, and the Wisconsin Economic Development Association.
The case involves a challenge by Voters with Facts, an unincorporated association of citizen volunteers and Eau Claire taxpayers, along with various individuals and LLCs who pay Eau Claire property taxes (Voters), to the City of Eau Claire’s creation of a new tax increment finance district (TID) and its amendment and expansion of an existing TID in conjunction with the Confluence Project, a collaborative public-private effort to redevelop the City’s downtown area at the confluence of the Eau Claire and Chippewa Rivers. The project includes, among other things, a state-of-the-art performing arts center and student housing.
Among other things, Voters claimed that the requisite determinations that the property was blighted and would not have been developed “but for” TIF assistance were merely conclusory recitations rather than based on actual findings, and that a cash payment to the developer/property owner operated as a subsidy or rebate in violation of the Wisconsin Constitution’s Uniformity Clauseand the constitutionally-based public purpose doctrine. Voters sought a declaratory judgment voiding the City’s actions as unlawful. Alternatively, Voters sought review by certiorari.
The circuit court dismissed Voters’ claims for a variety of reasons, including that Voters lacked standing and that Voters’ constitutional challenges were precluded by existing case law upholding the TIF law constitutional. The court of appeals affirmed in part and reversed in part. The court of appeals agreed with the
circuit court that Voters could not seek a declaratory judgment because Voters’ complaint failed to allege noncompliance with any statutory directives and showed the City made the required statutory findings. The court also held that Voters lacked standing because they did not allege specific harm and that Voters did not sufficiently allege a violation of the Wisconsin Constitution, on the basis of either uniformity clause principles or the public purpose doctrine. However, the court held that Voters would have standing to bring a certiorari action and sent the case back to circuit court. The Wisconsin Supreme Court accepted Voters’ Petition for Review.
Oral arguments are held after the parties have submitted briefs in the case. They give the justices an opportunity to ask the attorneys to address any remaining questions and give the attorneys one last chance to persuade the justices that their clients should prevail. Sometimes justices use questions at oral argument to help persuade their colleagues as to how the case should be resolved. The most interesting oral arguments are those where the justices and the attorneys representing the parties engage in a true dialogue; this was such a case. The attorneys had barely introduced themselves when the justices began peppering them with questions. WisconsinEye recorded the oral arguments and they can be viewed here.
Douglas Hoffer, Eau Claire Assistant City Attorney, argued on behalf of the City which ceded 10 minutes of argument time to Wisconsin Solicitor General Misha Tseytlin. Attorney Rick Esenberg of the Wisconsin Institute for Law and Liberty (WILL) argued on behalf of Voters.
We anticipate a decision in June 2018.
 Article VIII, section 1 of the Wisconsin Constitution requires that the method or mode of taxing real property must be applied uniformly to all classes of property within a tax district.
 The Public Purpose doctrine requires that public funds be expended for a public purpose.
 A declaratory judgment is a decision declaring rights and interpreting laws.
 Certiorari is a more limited review in which the court reviews the record created by the municipality and considers the following: (1) whether the municipality kept within its jurisdiction, (2) whether it proceeded on a correct theory of law, (3) whether its action was arbitrary, oppressive, or unreasonable and represented its will and not its judgment, and (4) whether the evidence was such that it might reasonably make the order or determination in question.
 The Wisconsin Supreme Court upheld Wisconsin’s TIF Law, concluding it did not violate the uniformity clause or the public purpose doctrine in Sigma Tau Gamma Fraternity House Corp. v. City of Menomonie, 93 Wis. 2d 392, 288 N.W.2d 85 (1980).