Governor Walker Calls Special Session To Cut Property Taxes by $100M
By Tom Larson
On Thursday, Governor Walker called for a special session to cut property taxes by $100 million. Due to higher than expected revenues collected by the state, Governor Walker and legislative leaders decided to use the money for property tax relief by distributing $100 million to school districts through equalized aids over a two year period, with $60 million allocated in year 1 and $40 million in year 2.
A “special session” can be called by the governor at any time and is limited to the issues specified in the call. Governors generally call special session to highlight specific issues. Special sessions are subject to the same rules and procedures as a regular legislative session. Moreover, they often run concurrently with the regular legislative session and may take place the same day as the regular floor period.
On Tuesday, the legislature’s Joint Finance Committee and the Senate voted to approve the proposed property tax cut. The legislation (SSSB 1) will now move to the Assembly for a vote on Thursday. The Governor hopes to sign the bill into law within the next week to ensure that the property tax cut will be implemented in time for this year’s property tax bills.
In addition to the property tax cut, the special session will include a few other proposals including authorizing the creation of a TIF district in the Town of Somers – which is adjacent to the future site of the Amazon.com distribution center, authorizing the Town of Brookfield to create a TIF district, and doubling the state historic rehabilitation tax credit to 20 percent.
TIF Decrement Bill Passes Senate With Unanimous Support, But May Face Hurdles In Assembly
Last week, the TIF Decrement bill (SB 252) passed the Senate (33-0) with no opposition. SB 252, which is one of NAIOP-WI’s top legislative priorities for this session, would allow municipalities to lower the base value of a tax increment district if the property is demolished or property values have declined. The legislation is important for approximately 30 communities throughout Wisconsin that have struggling TIF districts due toe the downturn in the economy over the last 5 years.
Despite the bill’s broad bi-partisan support in the Senate, several key members of the Assembly have expressed concerns with SB 252. Specifically, they would like to see changes in the TIF law to provide greater protections for property taxpayers. These changes may include specific debt ratio requirements in the project plan, requiring the developer to provide guarantees equal to the project increment, or prohibiting expenditures after 10 years from the date the TIF district was created.
Representatives from NAIOP-WI are in ongoing discussions with legislators and other key stakeholders in hopes of finding a compromise that would address the concerns raised about property taxpayers without discouraging or lessening the economic viability of TIF districts at the local level.