Property taxes see biggest jump since 2007 despite influx of cash for local governments

MADISON – Wisconsin is set to see its largest increase in property taxes since the Great Recession — but the actual effect on homeowners will be cushioned by a boost to two state tax credits that lower the amounts homeowners and businesses must pay.

That's according to a new report from the Wisconsin Policy Forum, which analyzed preliminary figures from the state Department of Revenue to project a 4.7% increase in gross property taxes as bills go out this month — the largest increase since 2007.

The actual increase is likely to be closer to 2% or 3%, the report found, due to increases to two state tax credits included in the 2023-25 budget.

The budget increased the school levy tax credit by $255 million and increased the state lottery tax credit by $15.9 million. Both of those measures reduce the amounts taxpayers will pay while still allowing for revenue increases for schools and local governments.

The increase also comes despite a historical bipartisan deal that boosted shared revenue — money the state sends to counties, towns, villages and cities that local governments can use freely. That deal gave a minimum 20% increase to municipalities with a population under 110,000. Counties and the state's two largest cities, Milwaukee and Madison, received at least a 10% increase in shared revenue.

"The rise shows the effects of inflation, local efforts to raise property taxes to fund education, and changes in the state budget to allow schools to capture at least some new revenues to cope with high inflation," the report noted.

In addition to inflation, the report noted that local governments are struggling with longstanding capital backlogs and a tight labor market.

Those pressures are likely to remain, the report noted, as federal COVID-19 relief funding for local government services ends in 2024.

Wisconsin is projected to end its current budget in June 2025 with a $4 billion surplus and $2 billion in its rainy day fund.

Jessie Opoien can be reached at jessie.opoien@jrn.com.