Give taxpayers more time

Wisconsin needs to reform the property tax system to give property owners more time to prepare for large jumps due to reassessments and market adjustments.

Many long-time property owners in rural Taylor County got a shock this December as they saw property taxes jump with increases over 100% in some cases. What made the increases especially painful was the short time that many residents had to prepare for the increases.

The town of Medford, the county’s most populous community outside the city of Medford, did not finalize its tax roll until November 13 at its board of review meeting where property owners had a chance to formally contest their assessments. The open book, which is where residents have a chance to review and work with the assessor to make informal corrections, was held on October 23.

Combined, these deadlines did not leave property owners much time to prepare for the large property tax increases that could be expected with significant jumps in property assessments. Property owners budget throughout the year for their property taxes, projecting it to remain similar to what it was the year before.

State lawmakers for the past three decades that revenue caps have been in place have gone through great efforts to attempt to stabilize tax bills to reduce the chances of a December surprise.

Wisconsin needs to take the next step and cap the amount of any single-year increase to 30% and utilize state reserves to make up the difference for local units of government. While this is still a significant increase, it would give time for taxpayers to adjust to the increases due to skyrocketing home and property values.

In addition, the state should impose a deadline for assessment rolls to be finalized in mid-summer. Assessments finalized after the end of June should be delayed to the following year. This would give at least six months for property owners to know what their assessments would be and to budget for potential increases. Giving people under two months to prepare for a tax hike is needlessly cruel.

While there were a number of factors at the state and local level which contributed to the increases, by far the largest driver was a wholesale reassessment that occurred in many towns. These reassessments were driven by substantial increases in the equalized values for the municipalities which were in turn driven by property sales and people’s willingness to pay more for rural homes and property.

Wisconsin assessors work under the fundamental tenant of capitalism that something is worth what someone else is willing to pay for it. How this translates into soaring tax bills is that the state uses property sales to determine the equalized values of municipalities. State laws require assessed values, the amount used to determine what people actually pay, to be somewhat close to the equalized value percentage- wise. The challenge is that people who have purchased or developed property recently are much more likely to be close to the so-called fair market price of the equalized value, than those who have had their property for a long time. Wisconsin’s constitution requires all residents to have equal treatment so there are times when painful reassessments need to take place to ensure that some property owners aren’t carrying an unfair burden for others.

What the state can do is take action to soften the blow and give taxpayers more time to adjust to the increased load while keeping local municipalities whole.