Aggregate property taxes collected in the southeast Wisconsin region fell by 3 percent ($121 million) from 2014 to 2015, with each of the seven counties in the region seeing individual declines – the first time that has happened since at least 2000, according to a new report from the Public Policy Forum.
The decrease in the region’s aggregate tax levy was accompanied by an even larger (5.4%) decrease in the aggregate gross tax rate for property owners in the region, from $23.93 per $1,000 of equalized value in 2014 to $22.63 in 2015. This is the first year the region’s tax rate has declined since 2008, according to the report.
According to the report, the “decline in levies resulted largely from the passage of Wisconsin Act 145.” That legislation – signed into law in March 2014 – provided more than $400 million in additional state aid for the state’s technical colleges, with a corresponding requirement that property taxes across the state be reduced by a roughly equivalent amount.
In the southeast Wisconsin region, Act 145 helped produce a $137 million decrease in property taxes levied by technical colleges, which caused the percentage of the region’s aggregate gross levy that is derived from technical colleges to decline from 7 percent in 2014 to 3.5 percent this year, according to the report.
“The state’s effort to provide property tax relief via a change in the funding framework for technical colleges has succeeded…(but) it also has created a larger obligation for state taxpayers to finance the state’s technical college system,” the report states. “This increased pressure on state resources contributed to the substantial challenges faced by lawmakers during the recently concluded deliberations on the 2015-17 state budget.”
The substantial decrease in the region’s property tax rate is attributed not only to the reduction in levies, but also to growth in property values, according to the report. The 2015 property tax rates are closely tied to 2014 property values, which increased by 2.6 percent. Recently released data from the Wisconsin Department of Revenue show that in 2015, property values in the region increased for the second consecutive year (after five consecutive years of decline).
Every county in the region experienced an increase in property values, though there were disparities in increases across the region. For example, property values in Kenosha County increased by 4.8%, while those in Milwaukee and Walworth counties increased by only 0.7%.
The City of Milwaukee was one of only 26 municipalities in the region that did not experience an increase in overall property values from 2014 to 2015. Property values declined in Milwaukee by 0.6 percent.
The Public Policy Forum report was sponsored by Baird. It can be downloaded from the Forum’s website at www.publicpolicyforum.org.
