2011 was a tumultuous year, but it ended very uniquely and historically in one respect: Property taxes, for once, stayed nearly the same. 

According to the respected Wisconsin Taxpayers Alliance (WTA), property tax bills increased an average of just 0.3 percent statewide this year; that’s a huge improvement over the past decade, where annual property tax levies increased an average of 4.4 percent. In fact, between 1982 and 2010, net property tax levies increased every year – as much as 12.4 percent in 1982 to as little as 2.3 percent in 2005 – except for one year, 1996. In that year, the net levy actually decreased 9.4 percent. That was the year that the state adopted the two-thirds funding of schools, which shifted a large portion of school taxes from local property taxes to the state.

This year’s nearly flat property tax levy is very good news indeed for property owners and for housing affordability in Wisconsin. It’s particularly noteworthy that this rare phenomenon was the result of a very difficult state budget introduced by Gov. Walker and adopted last summer, which balanced a massive $3.6 billion state budget by significantly cutting spending and placing stricter limits on property tax increases. 

But while good news for property owners, the combination of state funding cuts and property tax caps places real pressure on local governments that provide vital services to property owners, such as police and fire protection, garbage collection, road maintenance, snow removal, and park upkeep as well as other services that add to the quality of life most homeowners and businesses consider important. Moreover, the cuts and caps create real fiscal problems for K-12 schools, the quality of which is directly linked to the quality of housing in a given area and vice versa. Yet the stricter levy caps were necessary. Without them, state funding reductions could have resulted in significant property tax increases.

So as REALTORS^®, how do we balance the need to keep property taxes, as well as homes, affordable - with the need to adequately fund our schools and our vital local services? In other words, how do we find the property tax sweet spot?

The WRA spent three years participating in a project called the Wisconsin Way to answer that exact question. The effort created a comprehensive set of proposals to revolutionize the way we tax, spend and invest in Wisconsin. Along with a coalition of diverse organizations, including the teachers union, county and municipal government organizations, we developed a blueprint for change that advanced a set of novel ideas for reforming Wisconsin, which included how to find the property tax sweet spot. 

The reforms we proposed may not have been perfect, but they were the right discussions focused on the right issues. The reforms included significant reductions in Wisconsin’s over-reliance on property taxes to fund schools and local governments. They also included efficiencies in local government management and delivery of services, consolidation of school district administration, new revenues to replace the property tax, new tax incentives for economic development, and new funding and operations for the university system, to name just a few. For details on the Wisconsin Way’s Blueprint for Change, visit www.wisconsinway.org. 

Now more than ever, we need big ideas for big reforms. Someday, hopefully sooner rather than later, Wisconsin will move past recall elections, political unrest and partisan gridlock and eventually focus on real reforms like those we recommended in the Wisconsin Way - especially those long overdue reforms to our antiquated system of over-taxing real property. It’s time to change the false choices that pit parents, teachers, taxpayers, local officials, government employees, businesses and homeowners against one another. It’s time for major reforms that will move Wisconsin forward.