Fair property tax formula confusing
Roger Pitt explains assessments, equalization
By Roger Pitt
After 40 years dealing with budgets, I almost understood the convoluted process in calculating the tax rate levied against property.
Explaining the process was even more difficult as mentor/editor to new staff members, and even veteran reporters, who wrote one or two budget stories a year.
It is not what is facetiously called a sexy story that immediately grabs attention. It is part of the real news, because budgets and taxes determine the services and cost that impact your everyday life.
Dave, Bill, Steve and Roger, who gather Fridays – recognized the importance of the subject (between yawns) as a timely information topic.
The Department of Revenue (DOR) reported 2016 equalized valuation of all state property at $505 billion, three percent more than the prior year. Equalized values are based on data Jan. 1, 2015 to Jan. 1, 2016.
Your tax bills are being determined at this time by school districts, counties, state and local municipalities – city, town and village – in the process of creating budgets.
Wisconsin has a two-tiered process: local assessments and state equalization. The process of establishing full values for property is referred to as “equalization.”
Because local assessors may value property at different percentages of market value, the rule of uniformity would be violated if the assessed values were used to apportion levies for taxation districts with property in more than one town, city or village. Jan. 1, 2008, there were 1,851 municipalities and 1,908 taxation districts.
Equalized values provide a more equitable distribution for the apportioned tax levies, based upon the proportion of full property value each one bears in relation to the taxing jurisdiction’s full value.
State law requires assessed value within a taxation district be within 10 percent of the full (equalized) value at least once during any given five year period.
Many people helped educate me about the budget process, starting in 1964 – totally clueless about budgets, taxes and other duties as a reporter.
George Groher was treasurer for New London and responsible for calculating the tax rate and collecting the taxes at his office in old city hall.
My mother Connie had a similar position with Amherst Junction and struggled with determining the tax rate. George had a side business of doing that, but took time to explain the process to me to share with mom.
Later Dick Yerkey, New London School District numbers cruncher, was a go-to for information about schools and Jim Villiesse, New London clerk-treasurer, on taxes, budgets and financing. Judy Radke and Sue Tennie, now help out with needed.
This column is also timely because the current budget process is affected by valuations.
Clintonville City Administrator Chuck Kell notes Clintonville had a $! million drop in equalized value last year.
The impact is that there is less of a tax base (value of property) and holding spending at the same level would require more revenue, about $85,000, or increase the levy to balance a budget.
The recent state report shows a decrease in real estate value by $9,264,100. The equalized value in 2015 was $204,046,100 and the 2016 value is $194,782,000 – a decrease of about five percent. Total equalized valuation dropped from $218,476,000 to $209,051,000.
New London gets two reports from the DOR because it is in Waupaca and Outagamie counties. Total 2015 assessed valuation is $374,020,000 compared to equalized values of $359,115,700. Property in Waupaca County was $255,693,200 assessed to $244,953,200. In Outagamie it was $118,326,800 to $114,162,500, respectively.
The municipalities are responsible for collecting taxes for all of the other taxation districts. The bills are now computerized and mailed out by the county – this area Waupaca or Outagamie.
School districts include property in several municipalities, assessed at different values. The same is true for technical college, county and state levies based on equalized valuations.
The tax bill includes a list of taxation districts and assessments, the percent of the total levied by each district and tax rate of each.
Taxes not paid in full by the Jan. 31 deadline are then turned over to the county to collect and pay the taxation district levies.
Finally giving up trying to explain the process, I gave an outline to reporters about writing a budget story – spending, the budget; the levy, tax money to balance the spending, and the rate per $1,000 assessed valuation, for the taxpayer to estimate their tax bill. The planned numbers are compared with the current numbers.
Trying to explain the tax system creates only more confusion. The fact is nobody likes paying taxes – especially this one because it is the only one you pay once a year.