The tax credit that was supposed to save property owners from increased taxes because of a delayed state budget was vilified Monday at the Superior school board meeting.
As a result of the state budget being finalized after the Department of Public Instruction informed districts of their state equalization aid, the $79.3 million difference between the DPI aid figures and the amount approved by the legislature is being given back to taxpayers under the school levy tax credit formula.
Superior's board members and administrators said that credit doesn't help Superior as much as the equalization aid formula would.
Equalization aid is supposed to give additional money to districts where taxpayers have least ability to pay. The credit does the opposite, said William Rehnstrand, budget and insurance committee chair.
The credits disproportionately favor districts with more valuable property and are not helping districts with less property value but high numbers of students, he said.
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Both equalization aid and the school levy tax credit give tax relief to property owners, but they give it in different parts of the state, said Jack Amadio, business manager.
Under equalization aid the money mostly goes to districts like Superior that have low property value in relation to students. Tax credits go to districts where the property values are much higher and the district doesn't get much equalization aid, he said.
Superior property owners are paying about $74,000 more in property taxes under the credits than they would if the state funding increase was in the form of equalization aid.
In the Northwood school district, where property values are high and the district receives very little state aid, property owners will see about $92,000 more in property tax relief.
The most extreme cases are in the Elmbrook and Milwaukee school districts. Taxpayers in Elmbrook will see about $1.5 million more in tax relief while taxpayers in Milwaukee will see about $1.6 million less relief under the tax credits.
The tax credit was the solution legislators decided on to solve the state aid problem, but the boon to high-property districts was part of legislator's logic, Amadio said.
"They knew what they were doing. It's all part of politics; you're going to try and help your own," he said. "It's upsetting to the fact that they talk about no new taxes that they want to do down there ... they turn around and increase our property taxes and give relief to the districts that have the largest property values."
State Sen. John Lehman, D-Racine, is proposing a bill to fix the problem by changing the distribution of the school levy tax credit to the general equalization aid formula. Racine taxpayers would be out $666,000 tax savings under the credit formula.
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"The budget delay created a situation that resulted in winners and losers where under the education budget everyone had agreed to there were none," he said in a statement. "This bill is a simple fix to rectify the situation."
The bill would need to move through both houses and be passed before the DPI's Dec. 1 deadline to certify the levy credit. That's not likely to happen, said Christina Kintop, legislative committee chair.
Anna Kurth covers education. Call her at (715) 395-5019 or e-mail akurth@superiortelegram.com .
