Evers wanted to stop property tax hikes for schools, seniors. WisGOPs chose to let it happen

Wanted to go a bit deeper on the state budget and what's coming for property taxes. The biggest chunk of your property tax bill in Wisconsin likely comes from K-12 schools, as their main sources of funding come from the state and local property taxes.

On K-12, the final budget did get a long-overdue boost to special education funding, but it didn't give any additional general funding to districts over the next 2 years. And that's likely to mean property taxes will going up more for next year.

That includes $500 million to special education by increasing the reimbursement rate from 32 percent to 42 percent in the first year and 45 percent in the second year.

But when the budget was signed on July 3, without an increase in general school aid, education leaders were surprised. They say while the increase in state support for special education will free up money for districts, it is not enough to solve budget problems caused by the strains of inflation.

“The state of Wisconsin currently has a $4.2 billion surplus, but no new general state aid has been provided to help schools meet rising costs,” said Madison Metropolitan School District Superintendent Joe Gothard.

MMSD is expecting to see a decrease of nearly $12 million in general aid compared to last year, which will result in a $12 million increase in property taxes, Gothard said.

As a homeowner in the Madison School District, that's not something I'm looking forward to (although at least I'll be able to maybe write off some of those higher taxes due to the higher SALT Cap...maybe).

Also, this is where Gov Evers' creative veto from 2 years ago to lock in a $325-per-student increase in districts' revenue limits plays a role. The good news from this is that the schools will be able to get more resources (even if it likely won't keep up with inflation). But because of a $0 General Aid increase from the state, that means the increased resources would be paid for overwhelmingly with property taxes.

Higher property taxes for schools wasn't something Gov Evers wanted when he submitted his budget back in February, as the Legislative Fiscal Bureau noted.

Based on reports filed with DOR, gross property tax levies are estimated to total $13,638.1 million on a statewide basis for 2024(25). This represents a 4.2% increase relative to the 2023(24) statewide total of $13,086.7 million. After applying state property tax credits, net property tax levies in 2024(25) are estimated to be $11,899.5 million, an increase of 4.5% compared to 2023(24) total of $11,382.1 million. Under [the Governor's Budget Bill], gross property levies would increase on a statewide basis by an estimated 2.0% in 2025(26) and by an estimated 2.9% in 2026(27), while net property taxes would increase on a statewide bases by an estimated 1.3% in 2025(26) and by an estimated 2.4% in 2026(27). The following table reports estimated statewide gross and net property tax amounts.

Under current law, for 2025(26) and 2026(27), gross levies are estimated to increase by 8.2% and 6.7% for school districts, by 2.6% in each year for technical college districts, by 3.7% in each year for municipalities, and by 2.3% in each year for counties. Under [the Governor's Budget Bill], as shown in the following table, statewide 2025(26) and 2026(27) levies would increase by an estimated 1.6% and 3.7% for school districts, by 1.6% and 2.6% for technical college districts, by 3.0% and 2.7% for municipalities, and by 1.4% and 1.6% for counties. The lower estimated levies under the bills compared to current law are primarily due to the increase in general school aids provided to school districts.

Since the GOP-led Legislature refused to give Evers most of these initatives to lower property taxes, we will be operating under the "Current Law" scenario for the tax bills we'll be getting in 5 months. Which means your property taxes are going up.

As the budget talks entered their final days, I got this mailing.

And who is the "Wisconsin Homeowners Alliance"? They're basically a front group for the Wisconsin Realtors Association, a group that is usually backing regressive GOP politicians. But this mailing from the Realtors clearly seemed to back Gov Evers' plans to use more state tax dollars to pay for schools, and lessen the burden of property taxes. Let's see if those Realtors put their money in 2026 where their mouths are in 2025.

I'll also note that there was no increase in the Homestead Credit for either the maximum write-off, or in the maximum income level to receive that credit. That leaves the income limit at $24,680 - the same as it has been for 12 years, with no adjustments to inflation (thanks Scott Walker and Robbin' Vos!). The LFB notes that the lack of adjustment to the higher costs and prices of the 2020s means that a lot of Wisconisnites now are getting a smaller Homestead Credit or no Homestead write-off at all, which makes for a double hit with higher amounts of property taxes.

Increased claims in tax year 2009 (over $121 million) were most likely a result of the Great Recession and associated economic slowdown, which caused more individuals to be eligible for the credit. Since the tax year 2000 increase in the maximum income factor, the only formula change occurred in tax year 2010, when the income threshold, maximum income, and maximum property tax factors were indexed for inflation, and the dependent adjustment was increased from $250 (which had been in place since 1989) to $500. In response, the credit's cost increased from $121.1 million in tax year 2009 to $125.2 million for tax years 2010 and 2011. The indexing provision was in effect for only one year, and was sunset beginning in 2011. Without subsequent changes in the formula factors, the credit's cost has decreased since 2011. Had the formula factors been adjusted annually for inflation since 2011, the maximum credit for tax year 2024 would have been $1,650 instead of $1,168 (41% higher).

The continued decline in total claimants, and credits claimed, in 2021 and 2022 could be partially attributable to the significant cost-of-living adjustments applied to Social Security payments in those years. These adjustments were the result of high inflation during 2021 and 2022, mainly driven by pandemic-related economic factors. The adjustment for 2022 (8.7%) represented the largest inflation adjustment to Social Security payments since 1981. Under the homestead credit, household income increases as Social Security payments increase. To the extent household income increases above the income threshold of $8,060, claimants receive lower credit amounts or are disqualified altogether.

This is where I will remind you that Gov Evers asked to increase the income limit and amounts for the Homestead Credit for the 4th straight budget - this time asking for full credit to $19,000 of income, and allowing Wisconsinites who make up to $37,500 to receive at least a partial write-off. And for the 4th straight budget, the GOP Legislature said "No."

It's remarkable to me that after decades of hitting the Dems for "higher property taxes", the Wisconsin GOP were the ones that have chosen to allow a large property tax hike in the Winter of 2025. Maybe they were too rushed by the idiocy coming from DC that caused them and Gov Evers to have to play "beat the clock" on the budget earlier this month to lock in more Medcaid funding, and both the WisGOP Legislature and the Governor will try to improve some budget issues that might need to be cleaned up.

But there isn't much breathing room left in the budget as it stands, with a cushion barely above $700 million projected for the end of biennium. So how would either Evers or the WisGOP Legislature find the funds to stop this property tax increase from happening? And Evers was the only one of those 2 that actually wanted to stop the tax hike from happening, which means that most if not all the blame has to go to the WisGOPs that shrugged their shoulders and sent the bill to Wisconsin property taxpayers.