According to Mayor Jim Connors, the citizens of Lake Geneva will soon be given a great opportunity to pass a referendum that will impose an extra half a percent of sales tax on themselves. For the past three years the Mayor has been trying to get this tax passed so the City of Lake Geneva can have “Premier Resort” status and he can be Mayor of a Premier Resort City. Wisconsin Dells is one of only a couple Premier Resort Cities in the state and is the model city Connor’s apparently wants Lake Geneva to become. The truly unfortunate and unspoken fact of the additional tax is that it imposes the exact same tax on the citizens of Lake Geneva and it does it year around, not just when ‘resort people’ come in for the summer.
Mayor Connor’s has been quoted in the Lake Regional News as saying “the additional tax will only apply to resort related items”. The reality underlying that poorly researched news article is that the Premier Resort Tax turns out to be just another sales tax, but renamed. It’s a special city sales tax that is added to the taxes of everything else sold that is being taxed right now. There is no new or special tax on tourists. Tourists and visitors pay the five and half percent sales tax now, just like everyone in the city pays, so when the new half a percent city tax is added, everyone will pay six percent. Not rocket science but as expensive as rocket science.
There’s one obstacle to instituting this tax.
According to State of Wisconsin Law: “a community wanting to impose and collect revenue from a Premier Resort Tax must first qualify by having a minimum 40% of its valuation being a direct result of tourism.” In other words, the state’s justification for granting this special tax to communities is obviously that the money coming in be largely from tourists and visitors. Otherwise it would be nothing more than a local addition to the regular sales tax. The state does not normally give local communities the right adds sales taxes.
Lake Geneva doesn’t come close to meeting the 40% criterion. The City of Lake Geneva is in the 25% range, which means that for the city to collect 25 cents in taxes from a tourist, it will have to collect 75cents from the citizens of Lake Geneva. The State wants it to be closer to 50/50–50 cents coming in from tourists and 50 cents from the local citizens.
However, there’s one loophole in the law that grants a possible exception to the 40% rule. It requires the citizens of the city to approve an Advisory Referendum, indicating they understand they are paying the highest percentage of the tax and are in agreement.
Watch for Mayor Connor’s and his merry band of camp followers to be out campaigning to pass this Advisory Referendum, and not telling the truth about it anymore than they are doing about the issue right now. If the referendum fails then these same misguided leaders can attempt to get the state to pass a law making referendums meaningless, like they did in Lake Geneva with respect to the building limit referendum.