Report explores link between state property tax limits, municipal spending

State-imposed limits that tie municipal property tax increases to new construction are affecting local government spending overall as well as in specific areas such transportation and development, according to a new analysis by the Wisconsin Policy Forum (WPF).

Under the current limits, municipalities generally may only increase their total property tax collections, or levies, by the rate of new construction each year. The report notes that state aids, the other main source of municipal revenues, have been flat or declined in recent years.

WPF researchers found that high-growth communities have been able to raise property tax levies and total spending more than slower-growing communities. The report also found significant differences between these communities in the types of services that experienced spending growth. Combined, these findings suggest an unintended consequence of linking levy limits to new construction in which only high-growth communities have the financial capacity to invest in services that help precipitate further growth, while low-growth communities are locked into that status.

The report, “A Growing Divide,” is the second in a two-part series on property taxes. The first report, released in March, examined the impacts levy limits and new construction rates had on municipal finances....

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Ken Notes: Part of this is an educational process. When working for Lafayette County, I found many communities did not have even a basic understanding of how to make incentives work for them while others were willing to give away the farm with no plan for a solid return on investment.

We need to better educate our elected officials and city officials on the tools in there box, i.e. TIF, WEDC Programs, Industrial Revenue Bonds, HUD, and the list goes on. Finally the "professors" that are covering these topics have little or no field experience and I promise the written policies and laws do not take into account the ways these tools can be used most effectively.



- - Volume: 6 - WEEK: 30 Date: 7/27/2018 7:47:09 AM -