As property tax bills arrive this month, Wisconsinites are often left wondering, “Why is my
bill so high?” A new report from the Wisconsin Taxpayers Alliance (WISTAX), “Investigating Residential Property Taxes” answers this and other property tax-related questions.
Taxpayers are also often puzzled why their property taxes have increased more than the “average” or “median-valued” home in their community, or why their taxes increased more than their neighbors’. The report explains several factors at work.
First, averages tend to mask variations among communities and between individual properties. Some local governments may levy more than others, which means both total tax collections and taxes on individual properties will be higher.
Shifting values also have an impact. If the value of an individual property rises more than other properties in a community, a homeowner may end up paying a larger share of the total tax “pie.” Similarly, if the total value of one municipality in a county or school district rises while other values decline, residents of that municipality may also be responsible for a bigger share of the total county or school district collections.
Wisconsin officials are moving ahead with aggressive plans to upgrade I-94 south of Milwaukee despite uncertainty over a key source of federal funding for the project.
The improvements, including the addition of an extra lane in both directions of the freeway, took on new urgency this year with Foxconn Technology Group’s plans to build a massive electronics plant in the Village of Mount Pleasant, east of the freeway.
“We think that we have a really nice project that fits the requirements of the grant,” said Brett Wallace, director of the southeast region of the state Department of Transportation.
The state is pinning its hopes for the expanded freeway and related work on a $246.2 million federal grant from the U.S. Department of Transportation that would pay for about half the remaining cost.
But Wisconsin is making a big ask: The state Department of Transportation is seeking one-sixth of $1.5 billion available in the federal government’s grant program, known as the Infrastructure for Rebuilding America, or INFRA.
Wallace acknowledged the state is seeking a big share of the money.
But he said the state’s application meets important criteria federal authorities are looking for. A major selling point: the economic benefits of improved traffic flow in and around the Foxconn project and the burgeoning I-94 commercial corridor that includes Amazon and Uline operations in Kenosha County.
On Thursday, the Federal Communications Commission (FCC) voted to restore the longstanding, bipartisan light-touch regulatory framework that has fostered rapid Internet growth, openness, and freedom for nearly 20 years.
The Declaratory Ruling, Report and Order, and Order adopted by the FCC are as follows:
- Restores the classification of broadband Internet access service as an “information service” under Title I of the Communications Act—the classification affirmed by the Supreme Court in the 2005 Brand X case.
- Reinstates the classification of mobile broadband Internet access service as a private mobile service.
- Restores broadband consumer protection authority to the Federal Trade Commission (FTC), enabling it to apply its extensive expertise to provide uniform online protections against unfair, deceptive, and anti-competitive practices.
- Requires that Internet Service Providers (ISPs) disclose information about their practices to consumers, entrepreneurs, and the Commission, including any blocking, throttling, paid prioritization, or affiliated prioritization.
These provisions takes effect upon approval by the Office of Management and Budget of the new transparency rule that requires the collection of additional information from industry.
Republicans struck a deal on a sweeping tax overhaul Wednesday, including steep corporate and individual rate cuts, and hope to have legislation on President Donald Trump’s desk by next week.
The agreement includes a 37 percent top tax rate for individuals, Senate Majority Whip John Cornyn (R-Texas) said, lower than either the House or Senate called for earlier. The corporate tax rate would be 21 percent, higher than the 20 percent in each chamber’s separate legislation, and would start in 2018 instead of being delayed until 2019 as the Senate proposed.
“Pass-through” businesses that pay taxes through the individual side of the tax code would get a 20 percent deduction, and businesses would get to immediately write off investments for the next five years. The corporate alternative minimum tax, which business groups had fought hard to get squelched in a final deal, is out, sources said. The AMT for individuals is retained, though fewer people are expected to pay it as the exemption would be raised to $1 million for couples.
The estate tax, long a target for elimination by Republicans, would be kept, Cornyn said, though the exemption would be doubled.
The final legislation would also end Obamacare’s mandate that all Americans have health insurance or face a fine.
There was also a deal to allow homeowners to deduct the interest on up to $750,000 in mortgage debt, down from $1 million now. Negotiators dropped a House plan to tax as income college tuition waivers for graduate students working as teaching or research assistants.
That agreement would allow taxpayers to choose a property tax deduction along with either an income or sales tax deduction, with a $10,000 limit, according to a source familiar with the plan.
Republicans plan to release the details of the agreement by the end of this week, a GOP aide said. They still need to finish writing the legislative text, and get a final budgetary accounting by the official Joint Committee on Taxation.
President Donald Trump plans to make what his staff members called a “closing argument” for tax-overhaul legislation Wednesday as congressional Republicans consider last-minute revisions to key provisions. Here are the latest developments, updated throughout the day:
- Cutting the top individual income tax rate to 37 percent, which would help address top earners’ complaints about losing certain tax deductions, but could also damage claims by Trump and others that the measure is mostly aimed at middle-class relief.
- Setting the corporate tax rate at 21 percent, instead of the 20 percent proposed in both the House and Senate bills. The current corporate rate, 35 percent, is the highest among industrialized economies. Trump had initially sought a 15 percent rate, then said he wouldn’t accept any rate higher than 20 percent. But earlier this month, he suggested he was open to a number as high as 22.
- Adopting the Senate’s general method of cutting tax rates for partnerships, limited liability companies and other so-called pass-through businesses, but revising the particulars. The Senate bill would create a 23 percent deduction for pass-through business income, but a potential compromise would cut that deduction to 20 percent. Combined with a lower individual income rate, the change would still provide roughly the same amount of relief for owners of the most lucrative pass-through businesses.
- Capping the mortgage-interest deduction at loans of $750,000 or less. The House bill proposed a cap of $500,000. The Senate bill left the current $1 million cap in place.
Negotiations remained fluid Tuesday night, and details were subject to change. Final compromises may emerge Wednesday ahead of a planned public meeting of a joint House and Senate conference committee that’s charged with preparing the final, compromise legislation.
“If everything works right,” the Senate would vote on the final package Monday, the House would vote Tuesday and Trump would sign the bill by Wednesday of next week, said House Majority Leader Kevin McCarthy of California.
To draw attention to a loophole utilized by big-box commercial retailers to significantly reduce their property tax assessments, local government officials have designated December 11, 2017 as “Dark Store Day.”
Local officials statewide are calling on state legislators to stop this tax shift to other taxpayers, mainly homeowners, by scheduling a vote in January on Senate Bill 291 and Senate Bill 292, which close the dark store loophole.
“As local officials, we are calling on our state legislators to stop this tax shift,” said WCA Executive Director Mark O’Connell. “We are requesting they schedule a vote in January on Senate Bill 291 and 292.”
SB 291 closes a gap in Wisconsin’s property assessment laws that allow single tenant commercial properties, like Walgreens and CVS, to argue that the value of their property is not what it appears to be. As a result of a 2008 Supreme Court ruling, chain drug stores have been paying taxes on their properties in Wisconsin at half their actual fair market selling price; a discount unavailable to residential and owner-occupied commercial properties.
SB 292 nullifies a related but different tax avoidance tactic. National big box retail chains and other commercial property owners are challenging their assessed values using the “Dark Store Strategy” to argue that their thriving businesses must be assessed for tax purposes as though they were a vacant, boarded up property. The Indiana legislature and Michigan courts have recently invalidated the dark store theory in those states. SB 292 makes it clear that the Dark Store loophole is closed in Wisconsin.
“Without a doubt commercial businesses provide value to local communities. However, property taxes are needed to provide services local taxpayers and businesses require and expect,” said O’Connell. “This issue is not about local governments collecting more in property taxes. Plain and simple, this is about keeping property tax bills as equitable and low as possible for all taxpayers, not just commercial retailers.”
Governor Scott Walker today called on the Federal Communications Commission (FCC) to finalize rules increasing access to broadband internet by advancing television white space technology. Television white space is the unused spectrum between broadcast television stations which can deliver high-speed internet to underserved areas of Wisconsin.
“Fast, reliable internet access has the power to help businesses reach new markets, create jobs, and improve educational opportunities by connecting students in innovative and engaging ways,” said Governor Walker. “Our budget provides an additional $35.5 million for broadband expansion, but there is an opportunity to do more, which is why we are calling on the FCC to finalize rules advancing this technology.”
The FCC is considering rules which could result in at least three white space channels in every U.S. market to provide broadband Internet. If approved, the private sector is poised to provide underserved communities with access to robust, affordable broadband.
The leaders of the Wisconsin State Legislature are creating the first ever legislative commission, the Blue Ribbon Commission on School Funding. Under the leadership of co-chairs Rep. Joel Kitchens (R-Sturgeon Bay) and Sen. Luther Olsen (R-Ripon), the commission will examine how tax dollars are distributed to schools and make recommendations to better meet the needs of students across Wisconsin.
“The school funding formula was first created in the 1970’s and a review hasn’t been done in 20 years,” said Speaker Vos. “Times have changed, state demographics have changed, and of course, schools have changed; it’s time to examine the way we pay for schools.”
“Every child should have access to a quality education in Wisconsin,” said Sen. Fitzgerald. “With declining enrollments in more than half of the state’s school districts, a thorough analysis is necessary to ensure the process is transparent, equitable and delivers excellent schools today
and in the future.”
The Blue Ribbon Commission on School Funding involves members of the legislature and experts in the field of education. The commission will hold its first meeting this month. Beginning next year, the commission will travel around the state conducting public hearings to learn more about school funding issues in Wisconsin. Recommendations will be given to legislative leaders before the end of the session.