MONROE - The city of Monroe is one of several area municipalities whose slow construction market is putting a crimp on how much it can levy in property taxes this year.
Wisconsin counties, cities and municipalities are limited by how much they can increase their property tax levy. Under a budget bill approved last year, a municipality next year can only increase its levy by an equal percentage of net new construction growth to its equalized value, or 2 percent, whichever is greater. Thus, if a municipality has only a 1 percent growth in new construction, such as Monroe did last year, it will be allowed to increase its levy by just 2 percent. In order to surpass that levy limit, local governments would have to go to referendum.
New construction numbers referred to are net construction numbers, which are the value of new buildings and improvements to land minus losses in value due to demolition or removing buildings or other improvements.
Monroe's new construction in 2007 was just over $6.5 million, bumping up the 2007 total equalized value of $637.8 million by 1.022 percent. Brodhead found itself in a similar situation, with $2.4 million in new construction representing a 1.5 percent increase in the city's 2007 equalized value of $164 million.
For Green County, there was $52.3 million worth of new construction, a 2.003 percent increase. The county's total equalized value in 2007 was $2.6 billion.
Villages throughout the county also saw minimal new construction growth - with a few notable exceptions. Showing less than a 2 percent change were Monticello, .929 percent; Browntown, .778 percent; and Albany, 1.077 percent. But New Glarus had $4.9 million in new construction, a 3.055 percent change and Brooklyn posted a whopping 10.328 percent increase on $2.8 million in new construction.
Lafayette County showed a similar trend. The city of Darlington showed just a .382 percent increase on $333,500 in new construction last year. Shullsburg had a 1.533 percent increase on $736,100 in new construction. Lafayette County as a whole had $16.4 million in new construction, a 1.856 percent increase on the county's $886.2 million in equalized value.
With the exception of Belmont (a 2.626 percent increase), villages in Lafayette County fell below the 2-percent mark. Blanchardville even showed a negative increase, posting a loss of $81,300 in new construction on $31.7 million equalized value.
Overall, townships fared better, likely a reflection of the trend to build in more rural settings. Many in Green County showed new construction above the 2-percent threshold, including Mount Pleasant (5.168 percent), York (4.616 percent) and Washington, (3.623 percent.)
What impact the levy limit will have on local budgets will become apparent in the coming weeks as governments work on their 2009 budgets.
"It will certainly have an effect," Green County Finance Director Rhonda Hunter said, noting it's still too early to say what that effect will be. Department heads have until the end of this week to submit their proposals to Hunter's office, which will compile information into an overall budget. The finance committee will begin looking at the budget next week, she said.
Budgeting always is a struggle and the county always tries to limit spending, she said. Last year, the levy increased 9 percent, but the increases the three previous years were 5, 2 and 0 percent.
"We'll just have to wait and see" how initial budget numbers look, Hunter said. "If it comes in too high, we're going to have to cut.
"It's going to be difficult," she said.
The 2-percent tax levy limit is for this year only. The state's 2007-2009 budget signed into law last October included a provision that the 2007 municipal property tax levy could increase by 3.86 percent. That limit was dropped to 2 percent for the 2008 tax levy. The levy limits will end in 2009.
Wisconsin counties, cities and municipalities are limited by how much they can increase their property tax levy. Under a budget bill approved last year, a municipality next year can only increase its levy by an equal percentage of net new construction growth to its equalized value, or 2 percent, whichever is greater. Thus, if a municipality has only a 1 percent growth in new construction, such as Monroe did last year, it will be allowed to increase its levy by just 2 percent. In order to surpass that levy limit, local governments would have to go to referendum.
New construction numbers referred to are net construction numbers, which are the value of new buildings and improvements to land minus losses in value due to demolition or removing buildings or other improvements.
Monroe's new construction in 2007 was just over $6.5 million, bumping up the 2007 total equalized value of $637.8 million by 1.022 percent. Brodhead found itself in a similar situation, with $2.4 million in new construction representing a 1.5 percent increase in the city's 2007 equalized value of $164 million.
For Green County, there was $52.3 million worth of new construction, a 2.003 percent increase. The county's total equalized value in 2007 was $2.6 billion.
Villages throughout the county also saw minimal new construction growth - with a few notable exceptions. Showing less than a 2 percent change were Monticello, .929 percent; Browntown, .778 percent; and Albany, 1.077 percent. But New Glarus had $4.9 million in new construction, a 3.055 percent change and Brooklyn posted a whopping 10.328 percent increase on $2.8 million in new construction.
Lafayette County showed a similar trend. The city of Darlington showed just a .382 percent increase on $333,500 in new construction last year. Shullsburg had a 1.533 percent increase on $736,100 in new construction. Lafayette County as a whole had $16.4 million in new construction, a 1.856 percent increase on the county's $886.2 million in equalized value.
With the exception of Belmont (a 2.626 percent increase), villages in Lafayette County fell below the 2-percent mark. Blanchardville even showed a negative increase, posting a loss of $81,300 in new construction on $31.7 million equalized value.
Overall, townships fared better, likely a reflection of the trend to build in more rural settings. Many in Green County showed new construction above the 2-percent threshold, including Mount Pleasant (5.168 percent), York (4.616 percent) and Washington, (3.623 percent.)
What impact the levy limit will have on local budgets will become apparent in the coming weeks as governments work on their 2009 budgets.
"It will certainly have an effect," Green County Finance Director Rhonda Hunter said, noting it's still too early to say what that effect will be. Department heads have until the end of this week to submit their proposals to Hunter's office, which will compile information into an overall budget. The finance committee will begin looking at the budget next week, she said.
Budgeting always is a struggle and the county always tries to limit spending, she said. Last year, the levy increased 9 percent, but the increases the three previous years were 5, 2 and 0 percent.
"We'll just have to wait and see" how initial budget numbers look, Hunter said. "If it comes in too high, we're going to have to cut.
"It's going to be difficult," she said.
The 2-percent tax levy limit is for this year only. The state's 2007-2009 budget signed into law last October included a provision that the 2007 municipal property tax levy could increase by 3.86 percent. That limit was dropped to 2 percent for the 2008 tax levy. The levy limits will end in 2009.