A recent report showing property taxes in Wisconsin as a percentage of personal income are the lowest since 1946 is something Gov. Scott Walker no doubt will trumpet as he travels the nation seeking the Republican presidential nomination.
According to a recent report from the nonpartisan Wisconsin Taxpayers Alliance, property taxes will consume 3.6 percent of Wisconsin residents’ personal income this year, down from 4.2 percent in 2010-11.
This is good news for many homeowners, especially retirees whose incomes no longer are growing but who hope to stay in their homes as they spend down their savings.
Wisconsin has long had comparably high property taxes. According to the nonpartisan Tax Foundation, Wisconsin had the fifth-highest rate of property taxes as a percentage of housing value in 2013 and 12th highest property taxes per capita in 2012.
Walker deserves some credit. Act 10, furiously disparaged by public employees in 2011, freed local governments to lower the amount they pay toward many employees’ retirement and health insurance. But according to the Wisconsin Taxpayers Alliance, another significant reason for the latest drop in property taxes was a decision last year by Walker and the Legislature to “buy down” the state technical colleges’ tax levies by nearly $400 million. That decision, coupled with state-imposed revenue limits on the tech colleges, resulted in a 49 percent drop in technical college property taxes.
Walker’s critics are anything but impressed. They argue that state-imposed levy limits coupled with the tax cuts are harming the quality of K-12 public education and the UW System, the latter of which is preparing buyouts and other cutbacks to deal with a $250 million reduction in state aid.
Also, while Walker and the GOP-controlled Legislature last year bought down $400 million in tech college costs, in the just-passed state budget they borrowed $850 million to balance the state transportation budget. That money will have to be repaid with interest.
Finally, critics argue that the average person’s tax savings aren’t enough to stimulate the state’s economy but cumulatively are large enough to negatively impact the quality of our schools and municipal services.
Whether these are legitimate complaints or so much whining remains to be seen. For now, however, many homeowners are pleased to learn that the WTA estimates that the average per-capita property taxes this year are down 10 percent from peak levels to $677 for municipalities and 17 percent to $664 for counties.
As for public schools, inflation-adjusted per-student revenues that stood at about $12,000 in 2003 are now $11,620, according to WTA estimates.
The debate over the wisdom of Walker’s moves will continue to simmer, but politically his efforts to lower property taxes are wise. That’s because it’s the most visible tax — delivered to our mailboxes in a lump-sum figure, unlike income and sales taxes, which many people don’t know their annual cost.
— Don Huebscher, editor