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Property tax increases send chill to homeowners
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Recent Legislators at Work
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December 22, 2010 | 07:59 AM
As Wisconsin enters the deep freeze of winter and temperatures drop, one thing is unaffected and on the rise: your property taxes. At the end of the year, property owners are reminded of how much they are required to pay in order to fund their local municipality, school district, and technical college. We all know taxes are necessary to fund essential and vital programs, but taxpayers are drawing a line in the sand, and many want the Legislature to restore a meaningful property tax freeze next session.
The nonpartisan Wisconsin Taxpayers Alliance predicts net state property taxes, on average, will increase by about 4.9 percent in 2010, and school district taxes, on average, will increase by 3.4 percent. In Wisconsin, property owners account for nearly 4.5 percent of personal income, the highest in 14 years. As the economy remains soft, taxpayers are being pushed to their limit and are scaling back even more in order to pay their property taxes. I receive many phone calls, e-mails and letters from constituents who wish to remain in their home, but are finding it difficult to do so based on the tax burden. We must change that.
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. The outgoing governor made no effort to make the levy limit permanent. In fact, in his last budget he dramatically relaxed the property tax constraint and gave local units of government more flexibility to raise tax levies. That flexibility has led to the increase of the property tax levy limit of 3.2 percent for municipalities, which is three times what they were 25 years ago — $2.37 billion versus $601 million.
Wisconsin's property tax burden generally hovers between the eighth and tenth highest in the nation. But that ranking could increase, as the 2009-11 state budget also 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. There has been a great deal of discussion regarding changes to the overall school funding formula, but I believe any such changes must include a reinstatement of the QEO.
Property tax relief is always a hot topic of discussion. One point I have heard from many constituents is to limit or reduce the property tax burden for senior citizens as they get older. However, Wisconsin is somewhat limited in this regard, as the State Constitution would have to be amended in order to do so. That process could take a few years and may pit older taxpayers against younger taxpayers.
Because of that, I continue to work on income tax relief initiatives for seniors, such as my tax-free pension income bill and graduated personal tax exemptions for persons over the age of 65. Providing income tax relief to seniors would certainly allow them to offset any potential increase in their property tax bill.
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, we must enact meaningful property tax reforms, and work towards additional tax relief measures for all income earners. As year-end traditions go, a burgeoning tax bill should not be among them.
Kedzie can be reached in Madison at P.O. Box 7882, Madison, WI, 53707-7882, or by calling toll-free (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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