Thursday, November 17, 2011

Walker reforms didn't lower state tax levies

Lower property assessments responsible for statewide tax levy decrease

Gov. Scott Walker, in the midst of a recall signature drive against him, is already coming out swinging, sending out TV campaign ads on Monday Night Football and claiming his methods are "working" for the state.

His latest talking point is that his reforms helped lower state property tax levies by more than $47 million this year. Because of this, many people are likely to see lower tax bills, in effect vindicating Walker's entire plan (in his own mind) to remove bargaining rights for state workers in Wisconsin.

"Our reforms are protecting taxpayers while keeping our schools great," Walker said.

Yet, besides the fact that the $47 million across the state only saves the average property owner $18 per household, there's a serious flaw in Walker's reasoning. When you take a look at the state's average mill rate -- or the rate per $1,000 that assessed property gets taxed at -- you actually see an increase rather than a decrease from last year to this year. In other words, school property taxes, on average, went up under Walker's reforms.

Here's the mill rate for the previous school year:

And here's this school year's mill rate:

Not a huge tax increase, on average, across the state...but hardly the enormous tax cuts that Walker is making them out to be.

"But how can this be?" you might be asking yourself. "How can tax levies go down while tax rates go up?" The answer to that question isn't so difficult to ascertain, especially given that it involves a crisis that's hitting the nation overall: property values are sinking across the state, and tax increases aren't increasing fast enough to keep up with the depreciating value of our homes. As a result, what looks like property tax cuts across the board is actually nothing more than a loss in revenue the effects of property assessments being lower this year than last.

Wisconsin isn't benefiting from any "reforms" Walker put into place; on the contrary, Walker is actually benefiting from lowered values on his constituents' properties. It isn't a reform of any kind that's responsible for the levy decrease, and Walker is hardly the "golden boy" of Wisconsin he'd like you to think he is -- rather, he's just the beneficiary of some amazing dumb luck.

1 comment:

  1. Walker is the beneficiary of lower property values and amazing, dumb luck? With critical thinking skills like that I'll bet you attended a public school. Next time you get paid we need to play some three card Monte so I can show you how this works.

    Local school levies are the biggest part of the property tax bill in Wisconsin. When schools spend less because they are no longer contractually obligated by outrageous collective bargaining agreements to buy health insurance at artificially high rates from WEA (the insurance company owned by the teachers union) then the tax levy goes down, in this case by $50 million dollars.

    The "average mill rate" is a red herring and the idea that tax increases somehow can't keep up is outright fabrication. State law requires average assessment ratios to be within 10 percent of market value but they are not adjusted dynamically. Every four years or so the county updates valuations for everyone in the tax district and the mill rate is recalculated on the total assessed value (this is the short story.) The fact some communities have updated community assessments since last year due to lower property values generating a "higher average mill rate" is meaningless. It makes absolutely no difference if every house is valued at $100k or $500k and the mill rate is high or low because the total dollars needed by the city, county and schools is a constant.

    Thankfully Walker and the republicans have balanced the budget (Doyle and the democrats couldn't even limit spending increases to the rate of inflation) but we are far short of the fundamental reforms needed in the public schools where for the last 30 years spending on public education (US) has literally increased exponentially while test scores and drop-out rates show no improvement. It should be obvious by now that in union run monopoly public schools financial inputs do not yield cognitive outputs.