Property taxes would go up under Evers' budget...for a good reason

I wanted to go over the Legislative Fiscal Bureau's analysis of Wisconsin property tax bills under Governor Tony Evers' budget. Especially because Republicans will lie and deceive over what it actually does.

One main part of Evers' budget would give more flexibility to local governments than they currently have, which should lead to fewer Scottholes and service cuts.

The Governor's recommended changes relating to increasing the minimum allowable levy increase from 0% to 2% as well as the Governor's recommendation to repeal the negative adjustment for revenues from covered services are the only proposed changes to the levy limit program that would have a measurable effect on county and municipal levies. Increasing the minimum allowable levy increase to 2% would increase municipal levies by an estimated $16.2 million in 2019(20) and $32.7 million in 2020(21). This provision would also increase estimated county levies by $11.4 million in 2019(20) and $23.1 million in 2020(21). Repealing the negative adjustment for fees for covered services would increase municipal levies by an estimated $0.4 million in each year, but would have no estimated effect on county levies in the biennium....

Based on reports filed with DOR, gross property tax levies are estimated to total $11,198.1 million on a statewide basis for 2018(19). This represents a 1.7% increase relative to the 2017(18) statewide total of $11,016.1 million. After applying state tax credits, net property tax levies are estimated to be $9,876.4 million, an increase of 1.2% compared to the 2017(18) total of $9,760.0 million. Under in AB 56/SB 59, gross property tax levies would increase on a statewide basis by an estimated 2.0% in 2019(20) and would decrease by 7.7% in 2020(21). However, increases of net levies of 2.4% in 2019(20) and 2.1% in 2020(21) are estimated. The decrease in gross levies and the increase in net levies in 2020(21) are due to the Governor's proposal to shift funding from the school levy tax credit and first dollar tax credit to statewide general school aids. The following table reports these amounts by type of taxing jurisdiction.

Which will undoubtedly will lead Republicans and AM radio to trot out a talking point of "SEE! Property taxes will go up under Evers' budget! And more than they've been going up in recent years!"

But read further into the LFB's analysis, and there's some important detail to be included. That includes the fact that the LFB assumes sizable increases in property values to continue for the next 2 years.

...Increases in statewide property values have occurred each year since 2013, including increases of 3.2% in 2017, and 4.0% in 2018 for a median-valued home. The median home value is projected to continue to increase by 4.0% in 2019 and 2.9% in 2020. Comparatively, total statewide equalized values are projected to increase 4.8% in 2019 and 4.1% in 2020.

Since total [equalized property] values are expected to increase faster than the median home value, the estimated property tax change on a median-valued home is less than the estimated rate of change of statewide tax levies. Under the preceding assumptions, statewide net levies are estimated to increase by 2.4% in 2019(20) and by 2.1% in 2020(21) under AB 56/SB 59. In comparison, the estimated net tax bill on a median-valued home is estimated to increase by 2.0% for 2019(20) and by 1.6% in 2020(21) under the bill. Tax bills are estimated at $2,927 for 2019(20) and $2,975 for 2020(21) under AB 56/SB 59. Compared to current law estimates of $2,943 for 2019(20) and $2,988 for 2020(21), the estimated tax bill on a median-valued home would be $16 less (-0.5%) for 2020(21) and $13 less (-0.4%) for 2020(21) under the bill.

The most significant factor leading to the overall change in the estimated tax bill for the median-valued home varies by year. The Governor's proposal to related to schools would have the greatest effect on the tax bill in the biennium. These provisions would result in estimated reductions to the school tax on the median-valued home of $25 in 2019(20) and $32 in 2020(21), after factoring in the current law credits in that year.

Oh, that sounds a bit different. Instead of a total increase of $117 in property taxes under the current laws that were passed under Scott Walker and the Wisconsin GOP, they'd increase by a total of $104.

In addition, if you plug in the numbers from the LFB, they show a drop in property tax rates for each of the next 2 years.

Projected property tax mill rates, LFB 2019-2021
Dec 2018 bill $17.195 per $1,000 of value
Dec 2019 bill $16.856
Dec 2020 bill $16.649

That's more than a 3% decrease in rates, which isn't bad. Granted, $104 in additional property taxes isn't a decline, but it's also below the projected rate of inflation for 2020 and 2021, and it's barely half the rate of the projected increase in property values.

And as State Senator Jon Erpenbach points out, individuals will actually get something in Evers' budget that helps their communities.

Actually, according to the LFB, property taxes would BE LESS under @GovEvers' budget than current law, and he is still able to end 8 years of stagnant special education funding by the GOP, invest in infrastructure and improve health care. https://t.co/SKL8poaTqL

— Jon Erpenbach (@JonErpenbach) April 9, 2019

That's a notable change from the Walker years, when there might be few extra dollars taken off their bills (well, until they were inevitably raised via referendum), but things got notably worse by almost any other measure. I'll take that trade.