Property taxes levied by Wisconsin school districts have increased by the highest rate in a decade, driven in part by changes in the state budget and school district referendums.
A report by the nonpartisan Wisconsin Policy Forum shows school districts across the state have levied $5.21 billion in property taxes in bills sent out this month, a 4.5% increase over the $4.99 billion they levied last year.
The year-over-year increase is the largest since a 6% increase in 2009. Property taxes are the largest state or local tax in Wisconsin, and local governments and school districts rely heavily on them to fund basic services such as education, fire departments and police.
The figures compiled by the Policy Forum provide one of the first pictures of Wisconsin’s property tax landscape after nearly a year of split control of state government, with Democratic Gov. Tony Evers and a Republican-controlled Legislature in control.
The numbers come after Evers and Republicans managed to approve about $570 million in new spending for public schools, far below Evers’ initial request for an increase of about $1.4 billion, including a $606 million increase for special education.
The 4.5% school levy increase follows a decade of smaller annual school levy hikes under former Republican Gov. Scott Walker and the Republican Legislature.
Complex factors contribute to the amount of money school districts can levy in property taxes. Since 1993, the state has limited the amount of money school districts can receive per pupil from property taxes and state general aid. Districts aren’t able to exceed those amounts without having voters approve the increased spending through a referendum.
School districts aren’t required to go to referendum to increase property taxes in every scenario. For example, if the amount of money a school district receives from state general aids decreases in a given year, the school district can increase property taxes to make up for the lost amount of state aid without a referendum.
The state generally increases the total amount of per pupil revenue school districts can receive in a given year from property taxes and state aids. If it doesn’t increase that revenue ceiling — which was the case in the 2015-16 school year — but increases state aid, some school districts may need to reduce property taxes to remain below the total revenue limit set for their districts.
Wisconsin’s increased school tax levies come as school districts have increasingly turned to referendums to fund construction projects or increases in operating budgets. An April Policy Forum report found Wisconsin voters by that point in 2019 had approved $783 million in spending out of a total $1.2 billion on the ballot.
In November 2018, voters approved 94% of ballot questions worth $1.37 billion across 57 school districts.
Public polling shows voters have increasingly prioritized school funding. The Marquette Law School Poll since 2015 has shown voters have favored increasing spending on public schools over reducing property taxes.
The Policy Forum report found just eight of the state’s 421 school districts account for more than a third of the $224 million increase in levies this year. Five of those districts with the largest dollar increases in taxes are the Madison, Sun Prairie, Middleton-Cross Plains, DeForest and Verona school districts.
Sun Prairie approved a $164 million referendum for a second high school, and DeForest approved $125 million for a new elementary school and other building projects earlier this year.
Middleton-Cross Plains approved a $143.7 million building expansion referendum in 2018. Verona approved a $181.3 million referendum for a new high school in 2017, though much of that is funded by the closing of a tax-incremental financing district around Epic System Corp.’s headquarters.
Madison voters approved a $41 million facilities referendum in 2015 and the next year a $26 million operating referendum, which is fully phased in as of this year. The School Board is considering a $315 million building referendum and $36 million operating referendum in November.
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