Tag Archives: property taxes

These Republicans want to raise your property taxes

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There’s a gang of Republicans looking to raise property taxes throughout the state. They are State Senators Joe Leibham (Sheboygan) and Dale Schultz (Richland Center), joined in their tax-boosting ways by Republican State Representatives Daniel LeMahieu (Cascade) and Richard Spanbauer (Oshkosh). Independent Bob Ziegelbauer(Manitowoc)  also is part of the taxing gang.

These bright lights of property tax restraint (hah!) want to create yet another new property tax exemption that would actually increase property taxes for everyone who does not qualify for it.
And who is it the Raise-Your-Taxes Gang of Five wants to endow with a nice gift by slipping the rest of us the bill? Why, it’s that crucial driver of economic development — nonprofit-owned resale shops!
Yes, in the happy land of cutting tax breaks for your friends, the bill these gents introduced last week would allow any nonprofit business (which can be quite lucrative!)  to operate used-good stores and weasel out of paying property taxes on it. Since it still takes money to pay for things like police and fire protection and libraries, the rest of us pick up the amount dodged by the nonprofit resale owners. Here’s the best part: the nonprofit would not actually have to do anything considered charitable or community-enhancing with its resale shop to earn this tax break — the shop would would simply have to exist. What a deal!
(Note to property tax-paying non-profit organizations — if this bill passes, you might want to throw a few pairs of old jeans on a shelf, put price tags on ‘em and call yourself a resale shop. Presto! No property tax bill!)
So much for the property tax burden and how it should be reduced.
Guess just for friends of the five and not for the rest of us.

Story Hill assessments down 5%

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The average assessment for a single-family home in Story Hill was down 5% this year, according to City Assessment Commissioner Mary Reavey.

“For 2008 there were four sales in the neighborhood,” Reavey wrote in an email.  “Sales transactions were down city wide and the Story Hill area is not an exception to this. The neighborhood is not negatively impacted by foreclosures.  There are no open filings and there was only one foreclosure during 2008.”

The neighborhood, for assessment purposes, includes 252 properties.

The decline in values does not mean property taxes in the neighborhood will go down. The average assessment citywide dropped 7.2% citywide, meaning Story Hill’s property values, as a proportion of the entire city’s, actually grew. Properties of higher relative value bear a larger share of the property tax burden.

The city’s assessment write-up for the neighborhood is below.

2009-sh-assessments

City property values plunge $1.5B; service cuts, rate hikes loom

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City property values are projected to plunge $1.5 billion, leaving an $11.8 million revenue hole in the 2010 budget, according to information from City Assessment Commissioner Mayor Reavey.

That 5% decline in value means less money for pothole patching, police, firefighters, libraries and other city services unless Mayor Tom Barrett and the Common Council enact a significant increase in the property tax rate.

“The picture is very grim at this point,” said Ald. Michael Murphy, chairman of the Common Council’s Finance and Personnel Committee. “You do see some increases in the housing market nationally, but locally, there’s still pain to come.”

Adopting a budget that keeps the tax levy at $237 million, the same amount as this year, would require a 43-cent, 5.3% increase in the property tax rate, according to Milwaukee Rising calculations. The rate would rise from $8.09 per $1,000 assessed valuation for this year to $8.52 per $1,000 for 2010.

A 3% levy increase, expected to be the maximum allowed by law, would generate $7.1 million in new taxes and require an 68-cent, 8.4% property tax rate increase.  The rate would rise from $8.09 per $1,000 assessed valuation for this year to $8.77 per $1,000 for 2010, Reavey said.

The city’s taxable property value is projected to decline from $29.3 billion to $27.8 billion, Reavey wrote to Murphy, who requested the information.

The city is facing enormous fiscal pressures, including a large pension contribution, in 2010.

Murphy said he and Barrett already have informally agreed to freeze hiring, except for public safety positions, until the end of the year.  That should reduce the city’s payroll by about 250 employees, he said.

“Services will not be as quickly responded to as in the past because there will be fewer and fewer people to do the work,” Murphy said.

Levying to make up the $11.8 million would be difficult, he said.

“There’s a limit to what you can tax people when they are losing their jobs,” he said.

Some city residents probably may be facing higher tax bills whether or not the city increases the levy.

“Because of the diversity of city neighborhoods, even your preference of keeping the tax rate level will create a tax shift this year to properties that do not go down as much as the citywide decrease in value,” Reavey wrote. “This is not unlike the rising market of the past where the tax burden of property going up higher than the citywide average assumed a greater tax burden than the previous year.”

Property owners will get their assessment notices next month.

The total number of open foreclosures and bank or city-owned properties was 6,532 at the end of February, Reavey wrote. Their total assessed value was $737 million.

“In many cases it is the same areas of the City where we saw substantial increases in assessed values in the recent past that we see the strongest impact of foreclosures and other negative influences today,” she wrote.

The precise impact of foreclosures is not clear, Reavey said. While they do affect value, each one must be analyzed to determine how much, she said. Her office is aware of properties that were sold by a bank and then resold for much more by the purchaser, she said.

“No matter how the Mayor and Council decide to tackle this budget, it will be challenging,” she said.

This week’s depressing housing sales stats

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On the bright side, this week’s JS listed a lot more housing sales than last week’s did, indicating the market is not totally dead.

And while last week’s listings had sales prices averaging 43% less than assessment, this week’s listed sales were below assessments by a mere 35% on average.

OK, so the bright side is still pretty darned dark.

Here are the basic stats for this week’s listings: 43 properties sold (although one is excluded from the analysis because the address did not show up in the assessor’s data base), 18 from foreclosure (the analysis, like last week’s assumes bank ownership = foreclosed property). The average sales price was $39,028 below assessment.

Here is the chart — click on it for a larger image.

The home sales math really hurts

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One.

That’s how many of 34 Milwaukee home sales listed in Sunday’s Journal Sentinel was for more than the assessed value of the property. It’s listed in blue in the picture below.

Twenty.

That’s of how many home sales involved foreclosed properties.

On average, the 34 properties sold for 43%, or $45,571, under assessment.

Ouch. The implications for the city budget and the distribution of the property tax burden are huge. Maybe warm weather sales won’t be so skewed, but these numbers are not good.

A few caveats — the paper actually lists 36 sales, but the assessment for one property, 9727 W. Lolita, was for $50,000. The home there is new and the assessment is for the lot only, so that property was excluded from the analysis. Another property, 6709 W. Monona Pl., is not in the assessor’s data base, so that one also was rejected as well.

Another assumption is that if a previous owner is listed as a financial institution, the property was foreclosed upon.

Click on the picture for a larger image.