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Capitol Newsletter: Twists along the road to property tax relief
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Two of the biggest winners in the recently adopted Republican school-aid increase are Democratic-leaning districts in Dane County.

Middleton-Cross Plains will get an additional $570,272 more in the first year, boosting its state aid to $9.7 million. That amounts to a 6.2 percent boost, the largest percentage increase among the state's school districts.

Madison will get a $2.28 million, or a 4.6 percent, increase for the current school year. By comparison Milwaukee, the largest school district, will see an increase of $2.9 million in state aid. That's six-tenths of a percent, and it will boost Milwaukee's total to $534 million.

The legislation provides a $100-million increase in state aid to school districts that will reduce property tax bills in the next two years. The measure provides $40 million for the tax bills that will be mailed out next month and $60 million for the tax bills sent out in December of 2014.

Homeowners in the Oconomowoc district, located between the state's two largest cities, will benefit from a $476,586 increase in school aids, or 5.8 percent. But not all Milwaukee suburban districts, which generally lean Republican at election time, fared as well in this year's increase. The Waukesha school district gets an additional $898,894 for a 1.8 percent increase. Waukesha County is among the most-Republican areas in the state.

Mequon-Thiensville, another notably Republican-leaning suburban district, will get only a $292 increase in state aid, according to the estimates made by the non-partisan Legislative Fiscal Bureau. Ashwaubenon, near Green Bay, will get just a $907 increase in state aid, according to the estimates.

Rural areas, especially those in northern Wisconsin, generally will receive only small increases. Bayfield will get $38 of the $40 million. Crivitz's increase is $73; Cassville gets $140 more; Florence's aid will increase by $104; and Gibraltar Area in Door County will get just a $1 increase.

Statewide, the average homeowner will see a $13 reduction in school property taxes under the Republican plan. For 2015 the legislation would provide an average $20 reduction. The greater the assessed value of a property, the greater the individual property tax relief.

The $13 statewide figure assumes a home valued at $150,000. But the owner of property assessed at $500,000 would get a $44 tax savings this year and a $64 savings next year. But those are statewide averages; the district-by-district breakdown indicates there may be significant differences in impact.

Student enrollment and property values in a district are factors in the amount of state aid. Fewer students and the growth of vacation homes have limited state aid to many districts in northern Wisconsin.

Democrats offered a multi-point alternative to the GOP school-aid plan, but it was quickly rejected by Republicans. It would have put the $100 million into the state's rainy day fund in part because the Fiscal Bureau has estimated the state another $725 million will be needed for general-fund expenditures in the next biennium, thanks to already enacted laws.

Democrats also proposed accepting federally funds to expand Medicaid, saving $119 million in state funds in the next two years. The Democratic plan would have applied the savings to homestead property-tax relief and a different approach to general property tax relief. Homestead property tax relief, which dates to the 1960s, helps low-income people. Democrats wanted the aid tied to the rate of inflation.

The Democratic approach also would have provided a $45 credit on each improved parcel of land in Wisconsin, regardless of the value of the property or its location. That contrasts with putting the money into the school-aid formula under which the value of the property determines the amount of aid.

Action came quickly. In June the Republican-controlled Legislature also acted quickly when it approved a $30-million tax break for parents of children attending private schools. For 2014 tax returns filed in 2015, it provides up to a $4,000 income-tax deduction reflecting tuition for each child in private elementary and middle schools. It also provides up to a $10,000 deduction for each child in a private high school.

Using income tax deductions, the biggest break goes to those who pay the top state income-tax rate. The $30-million, private-school tuition tax break is nearly 9 percent of the $345 million in general purpose revenue tax cuts coming on line in 2014-2015.



- Matt Pommer, a 35-year veteran of covering state government in Madison, writes the weekly State Capitol Newsletter for the Wisconsin Newspaper Association. His column is published Monday in the Times.