Real estate taxes in Wisconsin are not progressive, as the Wisconsin Constitution, Section VII, Finance, reads, in pertinent part, as follows:
“Rule of taxation uniform…… Section 1. The rule of taxation shall be uniform but the legislature may empower cities, villages or towns to collect and return taxes on real estate located therein by optional methods…..Taxation of agricultural land and undeveloped land, both as defined by law, need not be uniform with the taxation of each other nor with the taxation of other real property.”
The Wisconsin Supreme Court affirmed the uniformity clause in 1998, holding that “For the purposes of the uniformity clause, there is only one type of property that is taxable and the burden of taxation must be borne as nearly as practicable, based on value.”
As such, the ability to pay real estate taxes can only be considered when the property is either undeveloped or agricultural land. Wisconsin tax rates on uniform property are generally between 1.7 to 2.0 percent. In Minnesota, real estate properties are taxed by their use. Commercial properties pay a higher rate, about 3.2 percent, while residential properties pay closer to 1.2 percent. The logic is that commercial properties are used to generate income so these properties have a greater capacity to pay taxes while homesteads, used primarily as residences, do not. Wisconsin does not follow this fairer rule.
Constitutional amendments in Wisconsin can only be initiated by a majority vote in the Legislature, followed by the calling of a constitutional convention or referendum vote. Over 30 years ago, the question of uniform taxation was put to the voters and narrowly defeated. The chance for a change to the real estate tax system in Wisconsin, given the current political realities, is slim to none. The challenges of collecting taxes on commercial properties are further being adversely affected by big box retailers employing the “dark store” theory. Currently, Menards in St. Croix Falls is seeking a reduction in property tax valuation of $2,414,059 or 28.7 percent. The appeal is currently scheduled for trial this year. Walmart in St. Croix Falls is seeking a large reduction administratively prior to initiating a lawsuit. The New Richmond Walmart is currently litigating a demand for a reduction in valuation of 31.4 percent or $3,566,800.00 These demands for lower taxation by large corporations are rampant in Wisconsin. Of course, taxes not paid by these corporations will need to be paid by us, the owners of residential property.
The Wisconsin Legislature has been decreasing funding for schools in recent years. Some comments have been made in this newspaper about increased state funding in recent years. These comments must be taken in context, since state school funding has increased from a new lower base so even “increased” funding is still way behind historic levels. In fact, state school increases of $635.00 per student (1800 enrollment) for the next three years are dependent on the success of the vote; these contingent amounts would be $1,143,000.00 or an average of $381,000.00. Clearly, the Legislature wants local taxpayers to pay for their own schools.
At this point, proper funding for operational purposes for the Osceola School District depends on the passage of the proposed referendum in which we vote to tax ourselves. Education is too important to the health of our society, economy and democracy. Despite the perceived “unfairness” of the current tax system, I will be voting ‘Yes’ on the upcoming referendum and I hope you do too!
Town of Alden