Homeowners in many Dane County communities are seeing only modest increases in their property tax bills this month, while some have even seen their taxes go down, thanks largely to an unprecedented infusion of federal aid, a healthy lottery credit and continued state-imposed limits on local government levies.
Overall, “it’s one of the smaller increases in recent years,” said Jason Stein, research director for the nonpartisan Wisconsin Policy Forum. “But it’s going to depend on what’s happening in the local community, whether or not the school district had a referendum.”
Perhaps the most obvious trend is that lottery credits — revenue from lottery sales used to offset property taxes — are reducing property taxes for owners of their primary residence much more than last year, Dane County treasurer Adam Gallagher said.
Overall, the lottery credit is delivering $343.6 million to state homeowners for property taxes levied this year and payable in 2022, compared with $237 million last year, according to the state Department of Revenue. Statewide, the credit on tax bills is an average $229, a 38% increase from 2021.
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“The lottery credit this year is the highest amount ever certified for distribution in the lottery’s 33-year history,” DOR Secretary Peter Barca said.
In the city of Madison, the total tax bill for the average assessed home in the Madison School District is rising about $124, or 1.76%, to $7,206. That compares with an increase of about $293, or 4.3%, in 2020. In 2019, the bill rose about $374, or 5.8%.
Those sums reflect tax bills after the school tax credit is applied but before deducting the state lottery credit, which rose 57% to $303 this year for the average-value $335,200 home in Madison, and another credit for building improvements. The city’s $40 vehicle registration fee, also known as a wheel tax, now in its third year, does not appear on property tax bills.
Madison, Dane County and the Madison schools increased property taxes for Madison property owners, but Madison Area Technical College slightly lowered taxes.
The Madison School District imposed the highest percentage and dollar increase, as well as the highest overall tax, a 2.6%, or $97 increase to $3,855 for the average-value home. The city’s portion of the tax bill rose 2.2%, or $60, to $2,787 on that home.
Overall, the city is collecting $259 million more in taxes this year, a 1.2% increase over the current year.
“The relatively low increase in property taxes reflects continuing recovery of our local, regional and state economies, unprecedented federal recovery funding, and prudent and effective investment of local tax dollars in services that are critical to our residents,” city finance director David Schmiedicke said.
As usual, individual bills will vary, driven by changes in values and local factors such as referendums or growth in the tax base, officials stressed. Some municipalities also add charges, such as for trash collection or recycling, improvements to streets or sidewalks, or unpaid bills.
New construction dropped
For years, Madison’s growth has enabled the city to modestly increase property taxes while remaining under state levy limits.
In Madison, real estate values rose 5.9%, with a 6.7% increase in the value of residential properties, including single-family homes and apartment buildings with up to three units. The value of commercial properties, including offices, hotels and big apartment buildings, rose 4.3%, according to the city assessor’s office.
New construction increased a steady $509 million, down from the $622 million last year, $606.3 million in 2019, $604 million in 2018, and a record $750 million four years ago. New construction is vital because tight state revenue limits restrict how much the city can increase tax collections to the amount generated by net growth, which is the value of new buildings, additions and remodeling minus the value of demolished properties.
The drop in new construction, partially a result of not having either materials or personnel to build early in the pandemic, allowed an estimated levy increase of just 1.5%, or about $2.4 million, for operating purposes in the 2022 budget.
School spending a factor
As usual, the cost of education greatly affects property tax bills this year.
At the state level, aid increased while there was no increase in revenue limits, which “put a very big downward pressure on school property taxes,” Stein said.
Statewide, new bills show gross property taxes for the state’s K-12 schools rising just 0.3%, from $5.38 billion to $5.4 billion, the smallest percentage increase in district levies since 2015, policy forum research shows. Of 421 districts, 212 will increase levies, 200 will decrease them and nine will keep them the same.
In Dane County, eight of 22 school districts wholly or partly in the county had passed recent spending referendums, and 12 increased their tax levies, ranging from a 0.8% bump in Cambridge to a 9.7% increase in Lodi. Levy decreases ranged from 0.2% in Middleton-Cross Plains to a 17.9% drop in Marshall, according to the policy forum.
In Madison, which passed spending and borrowing referendums in 2020, the levy rose 1.96% to $356.9 million in 2021-22.
Although referendums are contributing to higher tax bills, they “mean money for education at a time when school systems are stressed,” Stein said.
Meanwhile, the state delivered a significant influx of funds into technical colleges with a requirement the money be used to lower property taxes. Levies for the state’s 16 technical colleges will fall by 3.4%, just the second decline since 2000, due to the additional state money, according to policy forum research.
For the tax bill on the average-value Madison home, it helped Madison Area Technical College decrease taxes 6.48%, or $18.87, to $272.16.
It’s tempting to compare tax bills from one municipality to another, but communities assess properties at different rates compared with their fair market value. That makes it hard to compare tax rates — the amount charged per $1,000 in valuation that determines one’s overall bill — between communities. But by factoring in how close to fair market value each community’s assessments are, it’s possible to compare tax rates on a typical home.
In Madison, for example, the total tax bill for a $250,000 home in the Madison School District assessed at 100% of its fair market value was $5,336, among the highest in the county.
The highest was $5,593 for a Madison home of the same value in the Verona School District, followed by $5,590 for a Fitchburg home in the Verona School District and $5,423 for a Madison home in the Sun Prairie School District.
Among villages, the highest was $5,537 in the village of Belleville in the Belleville School District, and among towns, the highest was $4,640 in the town of Perry in the New Glarus School District.
The lowest for a $250,000 home was $2,933 in the town of Christiana in the Cambridge School District.
Tax bills began arriving in mailboxes in mid-December. The deadline for owners to pay at least the first installment of their property taxes is Jan. 31.
The initial deadline is the same in Madison, but the city has switched from the option of paying two installments to four, with the second installment due March 31, the third May 31 and the final on July 31, which is the same final due date as other municipalities in the county.
A fair way to compare taxes
|Municipality||School District||2021 assessed value tax rate per $1,000*||2021 assessed ratio to fair market value||2021 fair market value tax rate per $1,000||2021 tax on a home worth $250,000|
|Sun Prairie||Sun Prairie||$21.77||0.938||$20.43||$5,106.64|
|Average, all cities||$19.87|
|Average without Edgerton **||$19.99|
|Average without Edgerton or Madison **||$19.69|
|Black Earth||Wis Heights||$24.57||0.782||$19.20||$4,801.13|
|Blue Mounds||Mount Horeb||$19.04||0.892||$16.98||$4,244.91|
|Cottage Grove||Monona Grove||$20.57||0.977||$20.10||$5,025.50|
|Cross Plains||Mid-Cr Plains||$21.19||0.948||$20.10||$5,023.92|
|Mount Horeb||Mount Horeb||$20.69||0.833||$17.25||$4,311.78|
|Average, all villages||$18.74|
|Black Earth||Wis Heights||$21.20||0.835||$17.70||$4,424.29|
|Blue Mounds||Mount Horeb||$15.13||0.892||$13.50||$3,374.95|
|Cottage Grove||Monona Grove||$16.94||0.999||$16.92||$4,230.47|
|Cross Plains||Mid-Cr Plains||$18.67||0.797||$14.88||$3,719.45|
|Sun Prairie||Sun Prairie||$19.12||0.837||$16.01||$4,002.40|
|Average, all towns||$15.02|
|* Tax rates include county, municipal, school district, technical colleges, any special tax districts and the state school credit.|
|** Because only a small portion of Edgerton is in Dane County, including it with other Dane County cities distorts that comparison.|
Dean Mosiman's memorable stories from 2021
As the community emerged from the COVID-19 pandemic, it's been amazing to witness the creativity, dedication to causes and resilience that give hope and promise. I chose stories that reflect that dynamic, some involving long-held dreams, including pieces about a vision for the next Downtown in the wake of the pandemic and protests against racism, and the Bayview Foundation's plans for redevelopment of low-income housing into what will be one of the coolest neighborhoods in Madison. A proposal for an 18-story housing tower that would have razed the historic Wonder Bar with its gangster lore on the South Side revived a movement to save the building with the final chapters of the saga yet to be written. After fits and starts, the Wisconsin Historical Society chose a site for a long-sought, $120 million museum at the top of State Street. And I was able to document the move of a homeless man from the once sprawling homeless encampment at Reindahl Park near East Towne to the city's first tiny shelter encampment in an industrial area on the Southeast Side.
There's been so much more -- the plight of event venues amid the pandemic, the Urban League of Greater Madison's proposed Black Business Hub and the unveiling of plans for the Center for Black Excellence and Culture, both on the South Side, new investments and initiatives to address gun violence, the coming of bus rapid transit and a transit network redesign.
It will be something to watch so many of these ventures come to fruition in coming years.
With hard lessons from the pandemic and protests, Madison looks to forge a more diverse, inviting Downtown.
The nonprofit Bayview Foundation is poised to launch a $50 million, low-income redevelopment that could become one of the city's coolest neigh…
McGrath Properties original proposal for an 18-million redevelopment, the tallest residential building in the city, would have razed the Colis…
The Wisconsin Historical Society, after picking a site for a new $120 million museum at the top of State Street, unveiled plans that show a gl…