Keep property tax assessment local
Wisconsin needs to keep the assessment for property taxes at the municipal level rather than giving more power to Madison bureaucrats.
When it comes to talking about property taxes, Wisconsin residents traditionally have a large serving of whine with their cheese. Property taxes are not something anyone really wants to pay, but they are essential for the maintenance of things like roads, schools, libraries, fire departments, police and other local government services.
The key question is how to fairly distribute those costs over a community so that everyone pays their fair share.
This is where anti-property tax groups like the Wisconsin Policy Forum are attempting to sow distrust of the current system by implying there are free-riders who are not paying their fair share due to assessed values being kept artificially low compared to the inflated home and land prices being paid across the state.
To do this they cite recent statistics showing the gaps between the so-called “fair market” value and the assessed value of homes. According to their most recent report, state data shows more than 800 municipalities in the state have assessed values for the collective properties within their borders that are lower than 80% of their market value – the largest gap since at least 2011.
The “market value” they are referring to is the state’s equalized value estimate which is based on overall real estate sales in the past year. Equalized values are set by the state while assessed values are set at the local, municipal level with thirdparty assessors looking at individual properties and property categories at the local level to determine property values. State law also provides strong protections for property owners through the open book and board of review process to examine the entire tax roll and argue before a local board if they feel their assessments are out of line. They also have the right to go to circuit court to dispute the process.
Issues arise when home prices skyrocket, like they have done in recent years, or when there are relatively few sales of high-value parcels in an otherwise stable housing pool. At the state level they are looked at as being indicative of the value of the entire local market, while locally they would more correctly be viewed as outliers.
As to the question of fairness in tax distribution, concerns in this area are overblown as government tax rate increases have been well behind inflation, as pointed out by Wisconsin Policy Forum in a recently released study.
Picture taxes to be paid as a giant pie. Tax assessment determines how big each individual’s piece of the pie will be. With state laws tying local government levy increases based on real growth, as opposed to inflationary growth, the size of the overall pie matters less on the local level. The same amount of money will be needed to pay police officers or plow the roads regardless if the pie is small or large.
The only sure-fire way to reduce property tax burden on individual property tax payers is to increase the number of taxpayers sharing the burden. This is one of the reasons why municipal and regional economic leaders focus on growing local economies through housing efforts and business expansion. As anyone who has carried a heavy load knows, the more hands you have sharing that load the lighter it is for everyone.
Wisconsin’s property tax system is complex, but it fundamentally works on a basic level to ensure everyone pays their fair share of the cost of keeping communities running and schools in session.
Don’t attempt to fix something that isn’t broken.