In a 5-2 decision, the Supreme Court upheld the dismissal of plaintiffs’ claims for declaratory judgement in a case protesting the formation of two tax incremental districts (TIDs) in the city of Eau Claire. The case sets a precedent for other TID and tax credits such as Foxconn to proceed.

The plaintiffs claimed that:

1. The city did not establish a lawful purpose for the TIDs under Wis. Stat. § 66.1105(4)(gm)4.a because it did not give evidence for its findings of blight in the TID area.
2. The city’s joint review board did not reasonably conclude that development would not occur without the TID (Wis. Stat. § 66.1105(4m)(b)2).
3. The city unlawfully allowed developers to use cash grants from the TID to destroy historic properties (Wis. Stat. § 66.1105(2)(f)1.a) because the development agreement did not explicitly prohibit them from using the grants for this purpose.
4. The city violated the Uniformity Clause of the Wisconsin Constitution (Art. 8 § 1) because the cash grants effectively reimbursed developers for their property taxes, thus taxing the developers at a more favorable rate than identically assessed properties.

The Court decided the plaintiffs did not present claims upon which relief could be granted because:

1. The statutory language does not require the city to provide evidence for findings of blight. Other closely related sections near the TID statutes explicitly state when there must be itemized evidence for findings of blight, but the TID section does not. Overall, the Court held that findings of blight are legislative determinations and not justiciable issues of fact or law.
2. The statutory language does not require the joint review board’s assertion that development would not occur without the TIDs to be backed by itemized evidence. Again, the Court held that the joint review board’s conclusions are legislative determinations and not justiciable issues of fact or law.
3. The historic buildings were already demolished, and the complaint failed to present facts showing the developer used tax incremental financing (TIF) funds to reimburse demolition costs.
4. The list of costs that may be covered by cash grants in Wis. Stat. § 66.1105(2)(f)1.a-n does not include property taxes, and the plaintiffs’ complaint did not establish the grants were used or were intended to be used to reimburse property tax payments. Since constitutional challenges must be demonstrated “beyond a reasonable doubt,” the plaintiffs did not provide enough facts to present a claim for relief to be granted.

On the first two claims, the Supreme Court remanded the case to the circuit court for certiorari review, since there is no statutory appeal process for reviewing TID formation.

In their dissent, Justices R. Bradley and Kelly parted with the majority on each of the four claims.

On the plaintiffs’ first and second claims, the dissent said the majority mistakenly characterizes the city’s finding of blight and joint review board’s approval as legislative determinations. The dissent agreed that the city’s authority to create TIDs is a legislative determination, but the preconditions of that authority (e.g. finding of blight) are not, and taxpayers must have a judicial avenue to challenge the accuracy of the city’s findings.

On the third and fourth claims, the dissent disagreed with the majority by arguing that the plaintiffs’ complaints are sufficient under Wisconsin’s notice pleading law (Wis. Stat. § 802.02(1)(a)). However, the dissent noted that TIF cash grants do not act as tax rebates and thus do not violate the Uniformity Clause.