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December 30, 2009
Property Tax Increases Send A
Chill to Homeowners
As holiday traditions now come
to end, another tradition, of
sorts, is just beginning: the property tax
bill. Each year, at the end of
the year, Wisconsin property
owners are reminded of how much
they are required to pay in
order to fund their local
municipality, school district,
and technical college.
More times than not, any holiday
spirit left is quickly replaced
with anger and frustration, as
property taxes continue on a
seemingly endless rise. The
non-partisan
Wisconsin Taxpayers Alliance
predicts net state property
taxes, on average, will increase
by about 4% in 2009, and school
district taxes, on average, will
increase by 6%. In Wisconsin,
property owners account for
nearly 40% of the tax revenue.
Earlier this year, the
Legislative Fiscal Bureau – the
agency responsible for providing
unbiased information and
analysis to the Legislature on
all fiscal matters – issued a
stunning memo, whereby property
taxes in Wisconsin could
increase by more than $1 billion
over the next few years due to
the enactment of the 2009-11
biennial state budget.
According to the Bureau, taxes
on a $165,000-median valued home
would increase $91 this year and
$134 next year. Typically, tax
increases of any kind are
not welcome, but during
this time of economic
instability, the sting is even
worse.
Adding even more insult to
injury is the realization by
many that property values are
falling, yet taxes on those
properties continue to climb.
The amount of property taxes you
pay are dependent on two
factors: the value of your
property and the tax rate. The
value of your property is
determined by an assessment,
which is conducted by the local
municipality. The frequency
varies from one community to the
next, and some assessments are
performed as frequently as every
few years.
Currently, Wisconsin’s property
tax burden generally hovers
between the ninth and eleventh
highest in the nation. But that
ranking could increase, as the
Governor's budget eliminated a
major tax-control component to
public education funding: the
Qualified Economic Offer, or QEO.
Under the state’s school funding
structure, the QEO allowed for
reasonable pay increases for
public school teachers, while
being mindful of the property
taxpayers who fund public
education.
Another tax relief initiative
that was essentially done away
with was a meaningful property
tax freeze. Over the last few
years, the Legislature adopted
and the Governor reluctantly
approved a temporary, three
year, levy limit on municipal
spending. By controlling what a
municipality could spend, the
amount of money collected from
property taxpayers was limited,
and in some cases, reduced.
Ironically, in the dead of
winter, the freeze quickly
thawed, as no action was taken
by the Governor or the Democrat
Majority Party to make it
permanent. The budget
dramatically relaxed the
property tax constraint and gave
local units of government more
flexibility to raise tax
levies. That flexibility is
estimated to increase the
property tax levy limit 3.7
percent in 2009-11 for counties
and 4.7 percent for
municipalities., on average.
We all know taxes are a
necessary evil and an obligation
exists to fund essential or
vital programs. But at the same
time, elected officials at every
level must ensure government
lives within its means and does
not use the tax code as a way in
which to fund questionable
projects or redistribute
personal wealth. If we, as a
state, are ever to regain our
economic balance and entice
businesses and residents to stay
or locate in Wisconsin,
significant property tax
reforms must be enacted. As year-end traditions
go, an ever-burgeoning property tax bill should
not be one of them.
-30-
Sen. Kedzie can be reached in
Madison at P.O. Box 7882,
Madison, WI 53707-7882 or by
calling toll-free 1 (800)
578-1457. He may be reached in
the district at (262) 742-2025
or on-line at
www.senatorkedzie.com
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