Property Taxes Will Rise Slightly

It’s December, so that no-holiday-greetings envelope – your property tax bill – is either in your mailbox or will be soon.

Why do Wisconsin homeowners dread opening that statement? “Surveys show it to be the most unpopular tax and often the lead concern of state residents,” the Wisconsin Taxpayers Alliance said in a report earlier this year.

In his July-through-September campaign for President, Republican Gov. Scott Walker bragged about his record of controlling property taxes. Specifically, Walker predicted that the property tax bill on an average Wisconsin home would fall for a fifth straight year when December bills are mailed.

But a Nov. 19 memo to legislators from the non-partisan Legislative Fiscal Bureau (LFB) said Walker’s campaign-trail prediction won’t come true. Instead, the LFB said: The net (after tax credits) property tax bill on the median-valued Wisconsin home will total $2,847 – a $16 increase from last December.

That’s a one-year increase of 0.6 percent and the first increase in four years, according to LFB. Last December’s tax bill on that home fell by $95 – or 3.2 percent, for example.

LFB estimated the taxable value of that typical home at $152,719 this year, a 1.4 percent increase over 2014. But the home’s value this year was still 5.3 percent below 2010, thanks to the wrenching drop in property values statewide caused by the Great Recession.

Other factoids about Wisconsin property taxes:

*Homeowners paid 68 percent of all property taxes levied this year, according to the Fiscal Bureau. That percentage was slightly lower than the 70 percent that homeowners paid 10 years ago, LFB reported. The bureau’s July 27 report on property taxes on an average home prompted Walker’s campaign promise that they would drop for a fifth straight year. Instead, LFB Director Bob Lang said in the Nov. 19 update, changes in the statewide mix of property values means that “more of the tax levy will be borne by existing homes.”

*Wisconsin ranked 10th in the nation in its property tax burden in 2013, the last year for which figures are available, said Dale Knapp, WTA research director.
   *Property taxes took 3.6 percent of all personal income this year – the lowest percentage since 1946, WisTax added. Why? “State-mandated levy and revenue controls [on schools and local governments] were the main cause.”

Despite the small one-year increase in property taxes on that average Wisconsin home, the governor has made major progress in controlling property taxes, said Walker aide Laurel Patrick:

“Before Gov. Walker took office, property taxes on a median-value home had increased 27 percent over a decade,” Patrick said.

“Since 2011, Gov. Walker has implemented important reforms and made significant investments that put taxpayers first,” Patrick added. “Today, property taxes are lower than they were in 2010 and we have lowered the overall tax burden on our hard-working families, small businesses and seniors by $4.7 billion at the end of this budget.”

The Fiscal Bureau agrees with Patrick that this month’s tax bill on that median-valued Wisconsin home is smaller than the one the homeowner opened in December 2010. LFB says that December 2010 tax bill was for $2,963 – $116 more than the estimate of this month’s bill — meaning property taxes declined by 3.9 percent since then.

Patrick made one more point: This year’s increase in property taxes on that home “is being driven by the rise in home values, which is a positive economic indicator.”

In its report, WisTax described Wisconsin’s political fights over property taxes as “seven decades of drama.” Since the 1940s, whenever soaring property taxes angered homeowners, elected officials in the Capitol reached for “top-down action to contain the growth.”

Since 2001, the Taxpayers Alliance added, both Republican and Democratic leaders have “provided for limited or no growth in either property taxes or state aid, the principal sources of income for local governments.”

That means, when state officials act to control property taxes, the losers are cities, towns, villages and counties – and especially school districts. This year, K12 schools levied $4.75 billion in property taxes – half of the total net levy of $9.48 billion, the WTA reported.

A footnote in the Fiscal Bureau’s Nov. 19 update contains this warning: “The tax bill impacts in individual municipalities could vary considerably.”

Translation: The tax bill in your mailbox could be much higher – or much lower – than the $16 one-year statewide average.  Now…the envelope, please.

Steven Walters is a senior producer for the nonprofit public affairs channel WisconsinEye. Contact him at stevenscwalters@gmail.com