MacIver News Service | April 17, 2013[Madison, Wisc…] Governor Scott Walker has proposed a property tax freeze in his 2013-2015 state budget, but rising home values across the state could mean increased property taxes according a new analysis released by the Legislative Fiscal Bureau last week.
Governor Walker’s 2011-2013 budget included a property tax freeze and back in February before the Legislature, the Governor once again introduced a budget that “will hold the line on property taxes.”
However, rising home values mean a median-value home owner will see their property tax bills increase by $25 next year and $18 in Fiscal Year 2015 (FY15), according to the first analysis conducted by the non-partisan Legislative Fiscal Bureau (LFB) on property tax policies in the governor’s budget proposal.
The current projected increase in home values will end the troubling four years of declining home values. Last year the median-value home dropped to $151,148 from $157,692, which helped lead to a $9 decrease in the average property tax bill for the year.
While individuals saw a decrease in their property tax bills this year, the gross property tax levy still increased by $86.5 million over last year to $10.47 billion, an increase of 0.8 percent. The Legislative Fiscal Bureau’s paper suggests this could be due to new construction.
Over the next two years, the Legislative Fiscal Bureau predicts the median home value in Wisconsin will rise to $152,400 for FY14 and to $154,800 for FY15. This steady increase is one of the reasons for the estimated $25 and $18 increase in average property tax bills over the biennium.
LFB also predicts new construction will continue to boost the levy, estimating the gross property tax levy will increase $152.4 million in FY14 and $146.2 million in FY15 under the proposed limits. This is a 1.5 percent and 1.4 percent increase respectively over the previous year.
The report from LFB states, “the limit allows initial levy increases for each municipality and county based on the percentage change in each jurisdiction’s tax base due to net new construction that occurred in the jurisdiction during the prior year.”
Under Governor Doyle’s last budget, 2009 Wisconsin Act 28, local property taxes were allowed “a minimum increase of 3 percent,” which resulted in a statewide property tax increase of more than a billion dollars.