Property values way up in Wisconsin, but property taxes barely budge.

With local budget season underway, the Wisconsin Policy Forum had a timely report this week which showed that property values in the state 2022 blew upward at rates that they'd never seen.

Total property values in Wisconsin grew by a record 13.8% in 2022, marking the largest increase in decades of data, according to a newly released interactive tool from the Wisconsin Policy Forum...

In the seven-county southeast Wisconsin region, overall equalized property values increased by 12.9%, the most for the region in the available data going back to 1985. Every county in the region experienced a double-digit increase in total property values, led by Walworth County at 15.8%.

Dane County overtook Milwaukee County to become the largest in the state in terms of property values. However, the city of Madison still trails the city of Milwaukee in this measure. Total values in the city of Milwaukee grew 11.6% as of Jan. 1, 2022, slightly less than the previous year's growth of 12.3%. Total values in the City of Madison grew by even more at 17.2%, the most since at least 1985.

Residential property values statewide were up 14.9%, the largest increase since at least 1985. Residential values in southeast Wisconsin increased at a slightly lower rate of 13.5%, but also achieved the highest growth rate since at least 1985. In Dane County, residential property grew 14.5%, also slightly below the state average but still the most on record.

But that doesn't mean that people's property taxes are going to blow up by double digits this Winter. That's because Wisconsin limits how much in additional taxes a community can get, and only allows for the rate of growth of NEW CONSTRUCTION, not the houses and office buildings that alreaady exist.

The result of these levy limits was a property tax increase in 2021 of less than 2%, and 2022 probable will repeat that, regardless of the higher prices and home values.

Meanwhile, gross property tax levies approved in late 2021 (for 2022 local government budgets) increased by 1.6% statewide. That was far less than the rate of inflation and the smallest increase since 2014.

The Policy Forum notes that property tax rates fell by nearly 5% last year, the largest drop in 16 years. But it's funny how we don't view that as a tax cut, even though we certainly would call it one if it dealt with income tax or sales tax rates.

Among other things, the Policy Forum's tools allows you to look at your community's and your district's tax levies and how much property values went up in your town for 2022.

The Policy Forum's figures are based on gross tax levies, but doesn't take into account the several ways that number is reduced further before people pay their property taxes. One of those answers came today, as we found how much this Winter's property taxes would be reduced due to ticket sales for the Wisconsin Lottery.

The projected total of the lottery tax credit for this year is $320.7 million, which is down nearly $20 million from 2021's record reduction, but still double what it was 7 years ago.

So while inflation may be blowing up the equity and home values for Wisconsin property owners, it doesn't look like their property tax bills will go up nearly as much. Which is a nice bit of relief for those people, but it also means that schools and communities aren't going to get to reap much of the benefits of their higher property values, and those local governments aren't allowed to add many more resources, even though their costs go up due to inflation and the need to raise wages to keep employees.

That seems like a quandry that needs to be fixed in the next state budget, especially given the $5 billion that is sitting in the state's bank account.