BUDGET MACHINATIONS OVER TAX
CUTS LEAVE SCHOOL DISTRICTS
ABOUT EVEN, BUT ALLOW FOR
FEDERAL COVID RELIEF DOLLARS TO
FLOW INTO WISCONSIN.
BUDGET WRITERS BROUGHT DOWN
PROPERTY TAXES.
THEY THEN BACKFILLED SCHOOL
FUNDING WITH STATE DOLLARS.
THAT MAINTAINED EL ELIGIBILITY FOR
FEDERAL FUNDS WHICH WOULD HAVE
BEEN FORFEITED HAD WISCONSIN NOT
OBLIGED TO THE MAINTENANCE OF
EFFORT THRESHOLD FOR FUNDING OF
SCHOOLS.
PROPERTY TAXES ARE A VEXING AND
IMPORTANT DRIVER FOR HOMEOWNERS,
SCHOOL AND POLITICIANS.
ZAC SCHULTZ UNRAVELS THE WAY IT
WORKS.
>> IF YOU LIVE IN WISCONSIN,
THERE'S ALMOST NO ESCAPING THE
PROPERTY TAX.
EVEN IF YOU DON'T OWN A HOME,
YOU'RE PAYING YOUR LANDLORD'S
PROPERTY TAX BILL THROUGH YOUR
REPRESENT AND THAT BILL CAN BE
BIG.
<!32768> IN
>> JASON STEIN IS RESEARCHER
DIRECTOR AT THE POLICY FORUM AND
STUDIES THE MATTER.
WISCONSIN STANDS OUT IN HOW MUCH
WE RELY ON THE PROPERTY TAX.
>> WE RELY VERY HEAVILY ON THE
PROPERTY TAX TO FUND LOCAL
GOVERNMENT.
>> COUNTIES, TOWNS, VILLAGES
SCHOOL DISTRICTS COLLECT TAXES
TO FUND SERVICES LIKE POLICE AND
FIRE, PARKS, ROADS AND THE
COURTS.
WHEN YOU OPEN YOUR BILL, YOU CAN
SEE WHERE YOUR MONEY IS GOING
AND HOW IT ALL ADDS UP.
HOW MUCH YOU PAY IS BASED ON THE
VALUE OF YOUR PROPERTY.
LET'S LOOK AT TWO HOMEOWNERS IN
THE CITY OF ONALASKA LOCATED
NORTH OF LA CROSSE ON THE
MISSISSIPPI RIVER.
THE OWNER OF THIS $800,000 HOME
IN THE BLUFFS OWED NEARLY
$14,000 IN 2020.
DOWN THE HILL, THE OWNER OF THIS
$170,000 HOME PAID $2700.
>> SO IF YOU ASK ANY HOMEOWNER
IN WISCONSIN, HEY, WHAT'D YOU
PAY IN PROPERTY TAXES LAST YEAR,
THEY'RE GOING TO BE ABLE TO GIVE
YOU A NUMBER THAT IS CLOSE OR
EVEN EXACT TO WHAT THEY PAID.
>> ONE REASON IT STANDS OUT IS
IT COMES IN ONE LARGE BILL.
YOU PAY SALES TAX ON EACH
TRANSACTION.
YOU PAY YOUR INCOME TAXES ON
EACH PAYCHECK.
THE PROPERTY TAX STANDS ALONE.
>> YOU COMBINE BOTH THE SALIENCE
AND THE ACTUAL SIZE OF IT AND IT
TENDS TO LOOMS PRETTY LARGE IN
PEOPLE'S MINDS.
>> IN THEORY, PROPERTY TAX
LEVIES ARE SET AT THE LOCAL
LEVEL BY SCHOOL BOARDS AND CITY
COUNCILS.
BUT IN REALITY PROPERTY TAXES
ARE CONTROLLED AT THE STATE
LEVEL BY POLITICIANS AND THE
LEGISLATURE.
>> THE GOAL OBVIOUSLY IS TO KEEP
PROPERTY TAXES LOW.
>> REPRESENTATIVE TONY KURTZ IS
A REPUBLICAN ON THE JOINT
FINANCE COMMITTEE WHICH WRITES
THE STATE BUDGET.
>> I THINK EVERYBODY, ESPECIALLY
MY AREA, WHEN YOU GET THAT
PROPERTY TAX BILL, EVERYBODY
HOLDS THEIR BREATH.
>> REPUBLICANS FIXATE ON
PROPERTY TAXES BECAUSE THAT'S
WHAT THEIR VOTERS TELL THEM TO
DO.
>> I KEPT HEARING DON'T RAISE MY
PROPERTY TAXES.
SO IN MY AREA, THAT'S A
SENSITIVE ISSUE.
>> THE STATE HAS TRADITIONALLY
CONTROLLED PROPERTY TAXES IN TWO
WAYS, BY USING THE STATE BUDGET
TO HELP PAY FOR SERVICES
PROVIDED THROUGH GENERAL AID TO
SCHOOLS AND SHARED REVENUE FOR
LOCAL GOVERNMENTS AND BY USING
STATE LAW TO ELIMINATE LOCAL
CONTROL AND ENFORCE REVENUE
LIMITS, PREVENTING PROPERTY
TAXES FROM INCREASING.
PUBLIC SCHOOLS HAVE BEEN UNDER
REVENUE LIMITS SINCE THE 1990s
WHEN THE STATE PROMISED TO PAY
TWO-THIRDS OF THE SCHOOL'S COST
IN EXCHANGE FOR A CAP ON
PROPERTY TAXES.
WHILE THE STATE RAIRG LIVES UP
TO ITS END OF THE BARGAIN, IT
DOES SET HOW MUCH THE CAPS CAN
RISE.
>> THINK OF THAT AS A BUCKET OR
CONTAINER.
>> KENT ELLICKSON IS THE
DIRECTOR OF FINANCE FOR THE
SCHOOL DISTRICT OF ONALASKA.
HE COMPARES THE BUDGET TO A
BUCKET AND THE REVENUE LIMITS
CAP THE SIZE OF THE BUCKET.
>> SO THE STATE SETS THE SIZE OF
THAT BUCKET AND THEY DETERMINE
HOW MUCH THEY'RE GOING TO FILL
UP THAT BUCKET.
>> ELLICKSON SAYS AFTER THE
STATE FILLS PART OF THE BUCKET,
THE SCHOOLS LEVY PROPERTY TAXES
TO FILL THE REST.
IF THE BUCKET ISN'T BIG ENOUGH,
THEY ASK THEIR TAXPAYERS TO PASS
AN OPERATING REFERENDUM TO
INCREASE THE REVENUE LIMIT.
>> IT HAS BEEN DECADES OF
FUNDING WITH CONTINUAL OPERATION
REFERENDA.
THAT SUPPORTS A SIGNIFICANT
CHUNK OF OUR BUDGETS.
>> CITIES, VILLAGES, TOWNS AND
COUNTIES HAVE BEEN UNDER LIMITS
SINCE THE 2000s.
THAT WAS ZEROED OUT UNDER
GOVERNOR SCOTT WALKER.
THE TAX LEVY CAN ONLY INCREASE
BY THE VALUE IN NEW
CONSTRUCTION, WHICH IS A VERY
SMALL NUMBER IN MOST
MUNICIPALITIES.
>> THIS PAST YEAR WAS 1.5%.
THAT DOESN'T RECOGNIZE
INFLATION.
>> STEVE O'MALLEY IS LA CROSSE
CBT ADMINISTRATOR.
>> WE'VE SEEN LITTLE GROWTH IN
STATE REVENUE.
>> STATE AND FEDERAL MANDATES
REQUIRE THEM TO MAINTAIN
HIGHWAYS, THE JAILS, THE COURTS
AND PROVIDE HUMAN SERVICES.
>> YOU HAVE TO CUT BUDGETS,
POSITIONS.
WE'VE DECREASED THE NUMBER OF
FULL-TIME EMPLOYEES WITHIN
LA CROSSE COUNTY, AS HAVE MOST
COUNTIES ACROSS THE STATE.
>> O'MALLEY SAYS THE STATE
SHOULD INCREASE SHARED REVENUE
BECAUSE HE DOESN'T WANT TO
INCREASE PROPERTY TAXES.
>> IT'S JUST THE HIP HYPOCRISY.
THEY DON'T HAVE TO PAY FOR WHAT
THEY MANDATE COUNTIES TO
PROVIDE.
>> THOSE LIMITS ARE GOING TO
STRANGLE US.
>> THE TECHNICAL COLLEGES MAKE
UP ANOTHER LINE ON YOUR TAX BILL
BILL.
WESTERN TECHNICAL COLLEGE COVERS
AN 11-COUNTY AREA.
THEY HAVE LIMITED AUTHORITY TO
RAISE PROPERTY TAXES WIPED OUT
BY GOVERNOR WALKER.
>> WE WERE ACCOUNTABLE UNDER A
SYSTEM AND IT WAS A SYSTEM THAT
WORKED AND IT WAS A
REPRESENTATIVE SYSTEM BECAUSE IT
REPRESENTED OUR COUNTIES.
>> HE SAYS THE LEVY LIMITS HURT
THEIR ABILITY TO OFFER NEW JOB
TRAINING PROGRAMS THAT ARE
REQUESTED BY LOCAL EMPLOYERS
BECAUSE THEY DON'T HAVE THE
MONEY TO CREATE NEW CLASSES.
HE SAYS PEOPLE FOCUSED ON THEIR
TAX BILL NEED TO UNDERSTAND A
SMALL INCREASE CAN LEAD TO MORE
JOBS.
>> SO ANYTIME YOU SAVE THEM $6,
$7, $8 ON THAT TAX BILL, THAT
FEELS GOOD.
WHEN YOU ADD IT ON THERE, YOU GO
WHAT AM I DIRECTLY GETTING FOR
THAT.
IT'S HARD FOR SOMEONE TO SAY
THERE'S A BETTER WORK.
THEY ADDED ANOTHER SECTION OF
WELDING.
IT DOESN'T TRANSFER THAT WAY.
>> WE HEAR ABOUT THAT
CONSTANTLY.
>> SENATOR MARY FELZKOWSKI IS A
REPUBLICAN ON THE JOINT FINANCE
COMMITTEE.
SHE AGREES VOTERS DON'T ALWAYS
UNDERSTAND THE LINK BETWEEN
PROPERTY TAXES AND THE SERVICES
THEY PAY FOR.
>> PROBABLY NOT.
BUT IT'S STILL THE DIFFERENCE OF
CAN I AFFORD TO STAY IN MY HOUSE
OR NOT.
>> REPUBLICANS COULD INCREASE
THE AMOUNT OF MONEY THE STATE
GIVES LOCAL GOVERNMENTS AND
SCHOOLS TO REDUCE THEIR RELIANCE
ON PROPERTY TAXES.
BUT OVER THE LAST DECADE,
THEY'VE CHOSEN A DIFFERENT
ROUTE, POURING MORE STATE MONEY
INTO PROPERTY TAX CREDITS.
THESE CREDITS APPEAR ON YOUR
PROPERTY TAX BILL AS A NEGATIVE
NUMBER, REDUCING THE AMOUNT YOU
OWE.
THE STATE USES MONEY COLLECTED
FROM SALES AND INCOME TAXES TO
PAY OFF A PORTION OF YOUR
PROPERTY TAXES.
THE FIRST DOLLAR CREDIT ADDS UP
TO $150 MILLION A YEAR STATEWIDE
AND IT'S THE SAME NUMBER FOR ALL
HOMEOWNERS IN EACH SCHOOL
DISTRICT.
THE LOTTERY CREDIT COMES FROM
PROCEEDS FROM THE LOTTERY AND
IT'S THE SAME FOR ALL HOMEOWNERS
AS WELL.
THE SCHOOL LEVY CREDIT IS THE
BIG ONE AND IT'S USED TO LOWER
THE TAX RATE IN EACH SCHOOL
DISTRICT AND THIS IS WHERE
REPUBLICANS HAVE INVESTED MORE
AND MORE MONEY, TO THE POINT
WHERE THE STATE BUDGET SPENDS
NEARLY A BILLION DOLLARS A YEAR
ON THE SCHOOL LEVY CREDIT.
>> BOTH PROPERTY AND INCOME
TAXES WILL BE LOWER IN 2018 THAN
THEY WERE IN 2010.
>> THIS ACCELERATED DURING SCOTT
WALKER'S TIME AS GOVERNOR.
HE STARTED CAMPAIGNING ON A
PLEDGE TO MAKE PROPERTY TAXES
LOWER THAN WHEN HE TOOK OFFICE.
AND WHEN FREEZING LEVY LIMITS
WASN'T ENOUGH, HE STARTED
PUMPING MORE STATE MONEY INTO
CREDITS.
REPUBLICANS INCREASED THE SIZE
OF THE SCHOOL LEVY CREDIT IN
2013, '16 AND '18.
IN 2014, THEY ADDED $420 MILLION
IN STATE DOLLARS TO THE
TECHNICAL COLLEGE BUDGET BUT
REQUIRED THEM TO LOWER PROPERTY
TAXES BY THE SAME AMOUNT.
IN 2017, THEY ELIMINATED THE
STATE FOR FORESTRY TAX.
THEY PUT MONEY INTO FUNDING THE
LOTTERY SO THAT CREDIT WOULD
INCREASE.
IN THE LAST DECADE THE STATE HAS
INVESTED $13.6 BILLION TO BUY
DOWN PROPERTY TAXES.
BUT WHO'S SEEN THE MOST BENEFIT
FROM THAT INVESTMENT?
WHO'S SAVING THE MOST MONEY?
THE PEOPLE WHO OWN THE MOST
PROPERTY, OF COURSE.
LET'S LOOK AT OUR HOMEOWNERS IN
ONALASKA.
IN 2011, THIS HOME WAS VALUED AT
$706,000 AND THE OWNER PAID
$14,000 IN PROPERTY TAXES.
OVER THE NEXT TEN YEARS, THE
HOME WENT UP $95,000 IN ASSESSED
VALUE, TO $801,000.
BUT IN 2020 THE PROPERTY TAXES
HAD GONE DOWN FROM WHERE THEY
WERE IN 2011, TO $13,992.
OVER THE YEARS, THOSE THREE TAX
CREDITS ON THE BILL SAVED THE
OWNER $14,000.
DOWN THE HILL, THIS HOME WAS
VALUED AT $108,000 IN 2011 AND
PAID $2,000.
OVER THE DECADE, THIS HOME WENT
UP $60,000 IN VALUE, BUT BY 2020
THE PROPERTY TAXES WERE UP TO
$2780.
THE THREE CREDITS SAVED THIS
HOMEOWNER JUST UNDER $4,000.
REPUBLICANS LIKE SENATOR FELL
COWSAYSIT'S OKAY IF THE WEALTHY PAY
MORE.
>> IF HE'S GOING TO PAY MORE,
HE'S GOING TO SAVE MORE.
>> REPUBLICANS SAY CONTROLLING
PROPERTY TAXES WAS ALL ABOUT
HELPING PEOPLE AFFORD TO STAY IN
THEIR HOMES.
>> WHEN WE CAN KEEP PROPERTY
TAXES LOW THAT'S GOING TO KEEP
THOSE PEOPLE ON THOSE FIXED
INCOMES.
>> BUT INCREASING THE SCHOOL
LEVY CREDIT IS NOT THE BEST WAY
TO ACHIEVE THAT GOAL.
>> IF YOU WANT TO ENSURE THAT
SAY ELDERLY PEOPLE REMAIN IN
THEIR HOMES, THEN NO.
THERE WOULD BE MORE EFFICIENT
WAYS TO DO THAT.
>> WE HAVE IT SORT OF UPSIDE
DOWN IN WISCONSIN.
>> ANDREW RESCHOVSKY IS A
PROFESSOR EMERITUS AT THE
UNIVERSITY OF WISCONSIN.
HE STUDIES PUBLIC AFFAIRS AND
ONE OF HIS STUDIES FOUND ONLY
ABOUT HALF OF THE SCHOOL LEVY
CREDIT GOES TO WISCONSIN
HOMEOWNERS.
THE REST OF THE CREDITS GO TO
OWNERS OF FARMLAND, COMMERCIAL
PROPERTY, INDUSTRIAL PROPERTY
AND OUT-OF-STATE OWNERS.
MOST OF THE CREDIT GOES TO
WEALTHY PROPERTY AREAS.
>> THE WAY THE LEVY CREDIT
WORKS, THEY GET A LARGER
PROPORTION OF THE TOTAL CREDIT.
>> THE PROFESSOR SAYS IF THE
GOAL IS TO HELP LOW-INCOME
HOMEOWNERS PAY THEIR PROPERTY
TAXES, THE SOLUTION IS NOT
THROUGH THE PROPERTY TAX BILL,
BUT THROUGH THE INCOME TAX
RETURN.
>> THE HOMESTEAD CREDIT IS WHAT
IS CALLED A CIRCUIT BREAKER.
>> THE HOMESTEAD CREDIT KICKS IN
IF THE PROPORTION OF YOUR
PROPERTY TAXES IS HIGH COMPARED
TO YOUR INCOME.
BUT COMPARED TO OTHER PROPERTY
TAX CREDITS, IT'S VERY LIMITED.
>> OVER THE LAST TEN YEARS, THE
NUMBER OF PEOPLE GETTING THE
CREDIT HAS HALVED.
>> IN FACT, THE HOMESTEAD CREDIT
IS THE ONE AREA OF PROPERTY TAX
RELIEF REPUBLICANS HAVE CUT OVER
THE LAST DECADE, DOWN 45% FROM
WHERE IT WAS IN 2011.
>> IT'S TINY.
TINY AMOUNT OF MONEY RELATIVE
EXAMPLE TO THE SCHOOL LEVY
CREDIT.
>> IN THE SAME DECADE WISCONSIN
SPENT $13 BILLION TO LOWER
PROPERTY TAXES.
THE STATE SPENT JUST $1 BILLION
ON THE HOMESTEAD CREDIT.
>> THE IRONY IS THAT BY THAT
FOCUS, WE ARE NOT ACHIEVING THE
POLITICAL GOAL THAT THE
LEGISLATORS WANTED IN THE
BEGINNING, WHICH WAS TO TARGET
THOSE PEOPLE WHO REALLY NEED
RELIEF.
>> REPORTING FROM ONALASKA, I'M
ZAC SCHULTZ FOR "HERE AND NOW."
>> YOU HEARD ZAC REPORT ON LEVY
LIMITS PLACED ON SCHOOLS AND
LOCAL GOVERNMENTS.
REPUBLICAN BUDGET WRITERS KEPT
THOSE CAPS IN PLACE IN T