Case Name: Jerusalem Empowered African Methodist Episcopal Church v. Milwaukee

Type of Case: Taxation, Religious Freedom

Court: Milwaukee County Circuit Court

Case Number: 2012-CV-8079

Filed On: July 25, 2012

Current Status: Judgment for plaintiffs; 74.35(2m) declared unconstitutional as applied; property declared tax exempt; taxes declared void

Jerusalem Empowered African Methodist Episcopal Church (“JEAMEC”) is a small, relatively new church on Milwaukee’s northwest side with a predominantly African-American congregation. In late 2008, they purchased their current church building on Good Hope Road from a Lutheran church, which had held the land tax-exempt for almost 50 years.

After granting a tax exemption for the entire 4.4-acre parcel in 2009, the City of Milwaukee changed its mind and decided to levy thousands of dollars of property taxes on 2 of those acres in 2010 and again in 2011. Over the church’s protestations, Milwaukee claimed that those acres were “excess,” concluding that JEAMEC was not using them for the “necessity” or “convenience” of the church.

WILL filed a formal claim in January, 2012, with Milwaukee challenging the exemption denial. WILL pointed to nine nearby churches that were not being taxed for open fields larger than JEAMEC’s and described in detail the numerous uses JEAMEC made of that “excess” land, including:

  • Outdoor worship services
  • Youth bible camp
  • Outdoor bible studies
  • Free health clinics
  • Back-to-school supply drives
  • Crime awareness and prevention programs
  • Fundraising and evangelism outreach programs like car washes and barbecues

In April, 2012, Milwaukee again denied JEAMEC’s claim for an exemption. Because we believe that government should not be turning to churches – who are making legitimate charitable and benevolent use of their land – when other revenues are declining, we filed a lawsuit in July, 2012, challenging those taxes.

Milwaukee filed a motion to dismiss, arguing that the lawsuit could not be brought because the church had not first paid the disputed tax, as required by Wis. Stat. § 74.35(5)(c).  The court agreed that the statute barred JEAMEC from challenging its tax exemption denial, but refused to dismiss the church’s constitutional challenge to that statute.  JEAMEC argues that requiring a property owner who cannot afford it to pay a tax before the owner may go to court to challenge the tax exemption denial deprives the property owner of due process, equal protection, and the guaranteed right to a remedy under the U.S. and Wisconsin constitutions.  It will now be given an opportunity to prove those claims.

After engaging in substantial discovery, we learned that after the City had already denied our claim, the City’s chief assessor ordered a property appraiser to review comparable churches in the neighborhood and prepare a written report.  After visiting those nine churches we had identified, agreeing that they were the appropriate properties to serve as comparables, and reviewing JEAMEC’s use of its land, the appraiser and his partner both concluded that JEAMEC’s land should be entirely exempt, like every other church with a small amount of land used for church activities.  Despite that opinion from its own experts, the City continues to deny JEAMEC a full tax exemption, recently rejecting JEAMEC’s claim for a 2012 tax exemption, without explanation.

On September 16, 2013, after holding a hearing on a summary judgment motion brought by the church, the court ruled in the church’s favor.  The court issued a ruling holding that:

  • 74.35(2m) is unconstitutional, as applied to JEAMEC, because it violates the church’s right to due process of the law under the Wisconsin and U.S. Constitutions;
  • 74.35(2m) is unconstitutional, as applied to JEAMEC, because it violates the church’s right to a remedy under the Wisconsin Constitution;
  • JEAMEC’s property is tax exempt; and
  • The 2010, 2011, and 2012 taxes levied by the City against JEAMEC’s property, as well as all interest and fees on those amounts, are declared void.

From the transcript of the court’s ruling:

“This is a benevolent organization, tax exempt; everybody agrees with that.  The City has not disputed the fact that solely because of their financial circumstances they are incapable of meeting the pre-condition to challenging the lawfulness of the tax, the determination that this portion of their property was subject to property taxes.  They are incapable of meeting that pre-condition to challenging that determination.  Thereby, that pre-condition absolutely and completely bars them access to procedural protection which the Constitution requires that they have access to.

They are deprived because of their financial circumstances of a meaningful opportunity to be heard with respect to whether this determination was or was not lawful.  You can’t do that under the Constitution.”

In other words, we achieved complete success for our clients!

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