Education

Wisconsin Governor Signs Tax Change Bill

October 21, 2013

By Jason Stein

Just 10 days after his initial call for action, Gov. Scott Walker signed into law Sunday a property tax relief bill projected to save $13 for the typical homeowner this December.

The two-year, $100 million increase in state school aid drew praise from Republican lawmakers, criticism from Democrats and votes from both as it shot through the Legislature last week. The additional school aid payments are expected to push down property tax bills.

The first-term GOP governor announced just before 3 p.m. on Twitter that he had signed the bill at the Rice Family Farm in the Town of Burlington, notching a political victory as he heads into a potentially competitive 2014 re-election race.

The tax cut will be larger in some school districts than in others. An analysis by the nonpartisan Legislative Fiscal Bureau found that homeowners in about 80 of the state's more than 420 school districts won't receive any appreciable increase in state aid from the bill to lower their local property taxes.

For districts that are seeing an increase in aid, the amount will vary:

  • Milwaukee Public Schools would receive an estimated $2.9 million in additional aid for property tax relief, a 0.6% increase over its current general school aid, according to the fiscal bureau.
  • The Menomonee Falls School District would see a much larger percentage increase, receiving an estimated $150,736, or 2.1% more than currently expected.
  • Funding for the Mequon-Thiensville School District would remain essentially flat, with just $292 more for that district.
  • Wauwatosa schools and Waukesha schools will see state increases of 2.5% and 1.8%, respectively.

Mary Burke, a Democratic gubernatorial candidate and former state commerce secretary, criticized the plan as doing nothing more than offsetting a portion of Walker's cuts to state school aid in the 2011-'13 biennial budget. Those cuts forced property taxes to go up, Burke said.

"Offering the average homeowner a mere $13 back to cover Walker's property tax hike really doesn't help Wisconsin families at all," she said.

The state Assembly voted, 82-12, to approve the bill on Thursday, with all Republicans and 25 Democrats voting in favor, after many of the Democrats sharply criticized the GOP approach on the proposal. The Assembly Democrats who voted no all were from the Milwaukee and Madison areas.

On Tuesday, the Senate had approved the property tax measure, 28-5, with all GOP lawmakers and 10 Democrats in favor.

The property tax relief and several other economic bills being pushed by Walker and GOP lawmakers will lower the balance in the state's main account by $120 million in the current two-year budget and add $180 million to the projected shortfall in the next budget, according to estimates by the fiscal bureau.

The tax cuts will push down the December tax bill on the median-valued home by 0.4% on average, compared to current estimates, to $2,925. Next year, taxes under Walker's legislation will rise modestly so that over two years they will be about $11 more than they are now on the typical home but still lower than they otherwise would have been.

The legislation will increase state aid to local schools by $100 million over the next two years but not allow them to increase their total spending, which is limited by state-imposed caps. That will force school officials to lower property taxes.

The property tax relief will flow through the state's complicated school aid formula, which uses a variety of factors, such as a school district's property values, to divvy up state aid in different districts.

Assembly Speaker Robin Vos (R-Rochester) said that the aid formula is the best method to use since it provides help to the parts of the state that need it the most. But he said that in the future Assembly Republicans would like to tinker with the formula to ensure that fewer districts around the state are left out.

But he said he had no specifics.

"We haven't even gotten into that," Vos said.

Democrats have taken issue with the timing of Walker's plan, coming on the heels of Burke's entry into the 2014 race.

(c) 2013 Journal Sentinel

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