As property tax bills arrive this month, Wisconsinites are often left wondering, "Why is my bill so high?"
A new report from the Wisconsin Taxpayers Alliance (WISTAX), "Investigating Residential Property Taxes" answers this and other property tax-related questions.
Several factors are responsible for Wisconsin's relatively high residential property taxes: Greater reliance on local service delivery here than in other states; more units of government using the property tax; few local alternatives to the property tax; and the state's constitution "uniformity clause" that requires most property to be taxed the same.
Historically, Wisconsin local governments, rather than the state, provided most public services. In 1960, 74 percent of state-local spending here was done at the local level; as recently as two years ago, local spending still accounted for more than half of the total.
To fund those services, local governments in Wisconsin depend almost entirely on the property tax. Only counties have another significant revenue option in the 0.5 percent sales tax. Other states with local spending like Wisconsin use other taxes, particularly the sales tax, to help pay for services.
Wisconsin also has more units of government using the property tax than many other states. Until this year, property tax bills included levies from at least five: K-12 schools, municipalities, counties, technical colleges, and the state. The state is eliminating its portion of the property tax bill beginning this year.
In 2015, Wisconsin was one of 32 states with all five units on the tax bill; 18 had fewer "fingers in the pie."
Finally, the Wisconsin constitution, which requires all property to be taxed uniformly, effectively prohibits the state from targeting tax relief to certain property types, such as residences. Many states give homeowners breaks by shifting the burden onto other types of property owners.
Taxpayers are also often puzzled why their property taxes have increased more than the "average" or "median-valued" home in their community, or why their taxes increased more than their neighbors. The report explains several factors at work - variations among communities and between individual properties; local governments that may levy more than others; and shifting property values.
The WISTAX report, "Investigating Residential Property Taxes," is available now by visiting www.wistax.org; emailing firstname.lastname@example.org; calling 608.241.9789; or writing WISTAX at 401 N. Lawn Ave., Madison, WI 53704-5033.
Now in its 85th year, WISTAX is a nonpartisan organization dedicated to public policy research and citizen education.