Common Council

Opposing property tax exemptions

This coming Tuesday the council will consider a resolution I authored opposing state legislation that would provide a property and sales tax exemption for broadcast facilities. The bill, AB5, has bipartisan sponsorship and is supported by the Wisconsin Broadcasters Association. Studio equipment, cameras, recorders, remote trucks, office equipment would all be exempt. Digital broadcasting equipment is already exempt under a law passed in 2000.

Don't expect to hear about this on your local TV news, for obvious reasons.

If passed, this new exemption would cost the city of Madison about $220,000 per year--that's almost three police officers, or all of our lifeguards and ice rinks.

This is part of a growing and disturbing trend by the legislature of carving out special-interest tax breaks. I consider these particular exemptions more egregious, because there is no public purpose or "benevolent organization" that gets the break. Nobody has been able to explain to me why these exemptions are fair or justified.

Wisconsin used to have a pretty fair system of taxation, with a balance between property taxes and income taxes. Cities collect property taxes directly, and income taxes indirectly because the state collects them and distributes a portion to local governments. As recently as 2000, Madison was funded 64% by property tax and 21% by state aid. (The rest is direct city-generated revenue, everything from parking tickets to building permits to room tax to dog licenses.) 

In the past dozen years or so, things have changed. State aid to cities has been declining, putting more pressure on property taxes. In 2013, state aid accounts for only 13% of city funding, and property taxes are 72%. You can see this on your tax bill. In my six years on the council, city spending has gone up 24% while the property tax levy has gone up 31%. That's a 28% difference in growth rates, directly caused by the decrease in state aid.

How has the legislature responded? By putting strict limits on cities' ability to increase property taxes, and by making more property exempt.

People often ask me why their property taxes go up while city services are reduced. This is why.

-Mark C.

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I welcome your questions and comments about this or any other city issue. Please contact me at district19@cityofmadison.com or 608-695-5709.

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