State assessment shakeup proposed
The Wisconsin Department of Revenue is working on draft legislation that would require the state's 72 counties to take over responsibility for the assessment process. Currently 1,851 cities, villages and townships handle their own property assessments.
"Wisconsin is really the last state with so many municipalities doing their own assessments," said Stephanie Marquis, communications director for the Wisconsin Department of Revenue (WDOR).
Most states in the U.S. require counties to handle the assessment task. Only a handful of states, mostly on the east coast, leave the assessment job to local municipalities.
According to Jean Adler, WDOR deputy administrator, the proposal for consolidation of the assessment process has been in the works for years. There are state studies on the topic as far back as 1973, she said, and the studies were done by Democrats and Republicans alike.
"The concept is not new," Adler said. "We just want to bring more transparency, efficiency and fairness to the system. There is a consensus that there's a problem that needs to be fixed."
With each municipality responsible for its own assessment process, state officials claim there is too much room for inequity across Wisconsin.
And while some municipalities conduct revaluations on a regular basis, others may not complete a significant inspection and re-assessment process for upwards of a decade.
That can lead to significant differences in valuations for properties in the same county, thus forcing high-valued property owners to pick up more than their fair share of local tax bills.
Adler said the ultimate goal of new system will be to establish the "full market values" of properties and base taxes off that number. Currently assessments are determined and then the state uses a formula to establish an "equalized value" that taxes are based on.
It will be much less complicated when one value is on people's property tax statements, Adler explained.
Since the state began collecting feedback on its assessment proposal, Adler said the reaction from county and municipal officials has been mixed.
Hudson Mayor Dean Knudson is opposed to the plan.
"This is an expensive, ill-conceived plan based on the faulty premise that big one-size-fits-all solutions from Madison will be more efficient," Knudson replied by e-mail when he was asked to comment on the proposal.
He said there is no evidence to support the idea that tax dollars would be saved if counties handled the assessment process.
"Unfunded mandates like this one from the Doyle administration will only serve to increase everyone's taxes," Knudson said. "...Mandating annual reassessment of 20 percent of the property each year is like mandating re-shingling of one-fifth of the homes in the county each year, whether they need it or not."
Currently, local governments do reassessments as needed to state within 10 percent of fair market value, Knudson noted.
One suggestion from some local officials is that municipalities be allowed to form "consortiums" and hire one assessor to complete the work for many communities.
Adler said the state may allow such a change, because reducing the number of entities completing assessments will improve the fairness and the standardization of the revaluation process.
Some counties have objected to the idea of taking over the assessment process because no state funding appears to be part of the legislative package.
Adler acknowledged that the proposed mandate would not be funded by the state, but noted that the cost of the assessment process is currently being shouldered by municipalities. The cost of the process will merely be shifted to another local taxing entity.
"There is money being spent on this process," she said. "It's just that the municipality will no longer pay for it. The taxpayer should not see a significant effect from doing this."
David Fodroczi, planning and zoning director for St. Croix County, said the state proposal has been discussed briefly by the Planning and Zoning Committee.
He expects committee members to draft a resolution opposing the plan and then approve it in February. The resolution will then be forwarded to the full County Board at its February or March meeting for action.
He noted that the Wisconsin Towns' Association and Wisconsin Counties Association have already raised objections to the idea.
"The general sense is that, while there may be some need for improvement (in the system), they're skeptical about switching it to the county," Fodroczi said. "It's a large cost item with no funding attached."
The legislation would require the formation of a new county department, Fodroczi explained, which would likely mean higher county taxes.
Despite the objections, Fodroczi said county officials understand the motivation behind the proposal. Improving fairness and efficiency in the assessment process is an important goal, he said.
Fodroczi said WDOR officials "got an earful" from municipal officials at the recent feedback sessions held around the state. He said he's unsure how the department will respond to the concerns expressed.
New Richmond City Clerk Joe Bjelland understands the financial burden the proposal might have on counties, but he supports the move.
Bjelland said his city's recent revaluation process was "terrible," noting that officials heard many complaints from residents after tax statements were mailed out.
If the county had one assessment process, and updates were completed more regularly, taxpayers would feel more comfortable with the fairness of the numbers, Bjelland explained.
As the system is now, however, there are too many differences in how each municipality handles assessments, Bjelland added.
"It seems to me it makes sense for the county to do it all," he said. "There might be a bigger expense for the county initially, but eventually it would work out."
Adler said her department hopes to draft a bill that legislators can consider during the 2010 session, which runs through May.
The new system will go into effect on Jan. 1 of the year following passage of the measure.
If the bill is eventually approved by the Legislature, Adler said the shift to county or consortium assessments will take place over a five-year, phase-in period.
Eventually, new assessments for properties would be completed every year. Actual on-site inspection of every property would occur once every five years (with 20 percent of the homes and businesses in a county being revaluated each year).