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January 15, 2013 | 01:28 PMLYONS TOWNSHIP — This much is known.
Town of Lyons residents living within the Lake Geneva school districts saw their tax rates increase by nearly 17 percent this year. What was learned at the Lyons Town Board meeting on Monday is that the increase was unpredicted, unprecedented and certainly unwelcomed. The 70 or so seats in the board meeting room were taken up mostly by irate homeowners and 30 or more spectators stood along the walls.
The rate increase has been laid at the door of a late summer ruling in Walworth County Circuit court that lowered assessments of the 225 condominium hotel rooms at The Timber Ridge Lodge (see story page 2A). Timber Ridge is within the Lake Geneva Elementary and Badger High School districts. It was also laid at the door of a bad economy that caused the values of the condominium rooms to drop at Timber Ridge. According to the Walworth County Treasurer's Office, town residents living within the two Lake Geneva school districts saw their tax rates increase from $15.39 per $1,000 of equalized assessed valuation in 2012 to $18.01 per $1,000 this year, an increase of about 17 percent.
The rate for town purposes increased from 72 cents per $1,000 of assessed valuation to 79 cents.
Town residents living within the Burlington School District saw a 4-percent increase in their property tax rates, according to Town Clerk Karla Hill. That part of the town was not affected by The Timber Ridge Lodge decision.
Homeowners at the meeting indicated that the unexpected increase pushed their property tax bills anywhere from $600, to $800 to $1,000 more than last year's taxes.
The Timber Ridge court decision saw the town responsible for repaying the condo owners $450,000 in overpaid taxes for the 2011 and 2012 tax years. But, according to Town Clerk Karla Hill, that's not the problem. The town's share of that bill is about $17,000. And although the town had to pay the money up front, the town will be reimbursed by the other taxing districts, including the two school districts.
What's the problem?
The decision also lowered the total assessed valuation of town properties within the two school districts by $27 million. But even that isn't really the problem, Hill said.
The decision was handed down Aug. 15 and wasn't filed with the clerk of courts until Sept. 15, and that is the problem, according to a state Department of Revenue official who was at the meeting.
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Claude Lois (pronounced "Loys"), administrator of the DOR's division of state and local finance, said the judge's decision came the same day the state collects its data to equalize assessments within school districts.
By law, Wisconsin applies tax rates to 100 percent of a property's assessed market value. But because school districts often cross municipal boundaries, and property assessments often vary from municipality to municipality, the DOR "equalizes" the assessments from municipality to municipality so school district tax rates can be applied equally to all property owners.
In this case, however, the property values were equalized without the knowledge that a portion of the town lost $27 million in property value, Lois said. Lois indicated that disconnect between equalized assessed valuation and the property tax rate approved by the school districts probably caused the radical increase in tax rates for Lyons property owners within the two Lake Geneva school districts.
In essence, said Lois, the equalization was unequal.
Accusations and answers
Angry accusations were made against the assessment company, Associated Appraisal Consultants Inc., Appleton, and assessor Paul Mauel for the valuation of the condo-tel units that was rejected by the court.
One resident suggested that the town pull a truck out of its garage and sell it to Milwaukee to make up the increase in the tax rate.
Another resident suggested the town float a bond to pay off the difference in tax rates.
Lois said that suggestion was interesting and he would raise that issue with the DOR to see if it were feasible.
Several residents called for firing the company and suing its insurance company.
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Town board members were also accused of trying to hide the court decision from the public and not warning taxpayers of the court decision's impact.
Attorney Ben Brantmeier, who represented the town in the court case, was also criticized for not appealing the decision.
Mauel, who was at the meeting, said he was a son, a father, and "as of now, a level two property assessor in the state of Wisconsin." Mauel said he did the 2008 assessments of Timber Ridge according to the professional guidelines laid down by the state of Wisconsin.
"You can fire my company and you can hire someone else and you will get the same thing," he said.
Town board members said they had no clue that the equalization would have such a dramatic effect on property taxes, said Town Board Chairwoman Joy Bartelson. The town board discussed sending out a notice about the Timber Ridge court decision, but the board had no idea of the full ramifications of the decision, and it didn't want to release any inaccurate information, she said.
Brantmeier said the time has passed to file an appeal. However, he said the court made its decision based on the best information. In fact, the court accepted the town's figures on the values of the condo rooms, Brantmeier said. If it had accepted the condo owners' figures, the town would have lost even more of its valuation.
To appeal the decision, the town would have to present better evidence, and there was no better evidence than what the town presented during the court hearing, he said.
Although several residents said they wanted a tax credit against the unexpected bump in their tax bills, Lois said that isn't how the state handles this kind of situation.
He said the state uses a correction process called a "70.57," after the statute number that authorizes it.
Because the town within the Lake Geneva districts was valued at $27 million over its current valuation, this next year, the town's valuation will drop by $54 million, which should lower taxes due in 2014, Lois said.
Lois said that state does this adjustment every year, but it's rare to have an adjustment this large.
He estimated that taxes on a home with an equalized value of $300,000 will be about $5,668 this year, but drop to $4,800 in 2014, with this year's the adjustment of the town's equalized valuation. While that might spell some relief, there is no guarantee that property owners would be made whole by that process.