The “dark store loophole” probably isn’t near the top of your list of burning issues. Unless you’re a public official or a close follower of tax issues, you may not even know what it is, but it is popping up with increasing frequency.
Simply, attorneys for many large retailers are squabbling with local governments in Eau Claire and elsewhere around the state about the values of their properties for tax purposes. They argue that those property values should be based on similar stores that are closed and vacant, not on what the owners of the operating stores paid for the land and buildings.
As these retailers sometimes succeed in lowering their assessments and property taxes, those costs get shifted to residential property owners — who else? — to pay for public services. According to the League of Wisconsin Municipalities, which lobbies on behalf of the state’s cities and villages, residential property owners in Wisconsin pay 68 percent of all property taxes, compared with 50 percent paid by Minnesota residence owners.
The League of Wisconsin Municipalities obviously wants the dark store loophole eliminated, and many state legislators reportedly agree, but the retailers aren’t without political muscle, and the haggling over assessments of large retailers’ properties continues statewide.
Obviously, the shuttered Kmart, Mega East and Shopko stores in Eau Claire aren’t worth as much as a large, thriving retailer. But if some courts agree that the thriving stores should be valued the same as a shuttered store, then homeowners should get the same deal.
How is that possible? Well, the owner of a three-bedroom ranch home in a middle-class neighborhood should be able to single out a three-bedroom home that is vacant and rundown in some other part of town and apply the “dark house loophole.”
Or, perhaps, the many senior citizen “snowbirds” who head south for the winter could argue the “dark house loophole” for the months they aren’t here. Think about it; why would someone in Arizona care if the snow gets plowed here? Same goes for paramedic service; if they keel over in Phoenix, the EMTs in Eau Claire aren’t going to respond. So why should they pay taxes for those months at the same level as someone living here?
We’ve all contemplated this argument in some form. If I don’t use a public service, why should I be taxed for it? Education is the big one for childless couples or those whose kids have aged out of the system.
Sure, most of us grouse about examples of “government waste” that we hear about and perhaps have even seen or witnessed. But in the end, we pay taxes because there are things we all want that can best be provided if we all pitch in. Police officers, jails and courts, fire protection, first responder services, primary and secondary education, and keeping our streets plowed are some of the major categories.
There are good reasons a functioning large retailer should pay higher taxes than the owner of a shuttered store. If there’s a “cardiac arrest in Aisle 5,” who gets called? If a shoplifter gets busted and needs to be arrested and prosecuted, who gets called? If a fire breaks out in a stockroom, who will race to try to put it out, maybe risking their lives in the process? If a large retailer needs workers who can read, write, run a cash register and otherwise display sufficient education to do the job, who pays for that? If the roads to the retailer are clogged with snow, who is responsible for clearing them?
The answers are obvious. Of course, the owners of the shuttered Shopko or Kmart aren’t particularly worried about any of those things because they’re not operating.
Residential property owners have incentives to keep their properties looking nice, even if that means higher assessments and taxes. Obviously, if the day comes that they want to sell, their investment will be worth more. And if their neighbors all feel the same way, they all benefit because the neighborhood develops a reputation as being clean and safe, further enhancing future sale prices. There’s also the pride factor; most people want to live in places that aren’t eyesores.
Similarly, owners of retail properties want to make a good impression on customers so they’ll come back, even if that raises the assessed value of their stores. Sure, price and product selection are crucial, but so are clean aisles and facades, friendly, knowledgeable staff, and easy access and parking.
All of these things can lead to increased profits, a portion of which gets channeled to providing the aforementioned public services. The combined property taxes from owners of homes, businesses and industries help make our communities stronger, more attractive to potential newcomers and existing residents.
Unless I’m missing something, I can’t believe the vast majority of state lawmakers from both parties don’t feel the same way. They should clean up the “dark store loophole” and not go into secret “caucuses” and fret about who may or may not give to their next campaign.
Yeah, like that’s going to happen.
Huebscher is a contributing columnist and former Leader-Telegram editor.