February 2017

UNITED STATES – February 2017

NEW JERSEY - BIG-BOX STORES CAN HAVE THEIR CAKE, AND EAT IT, TOO ...... 2 NEW YORK - 'PROPERTY TAXES ARE BREAKING THE BACK OF THIS STATE': GOV. CUOMO ...... 3 CALIFORNIA - WHY IS THE FIRE/EMS TAX SO HIGH?...... 4 USA - THREE BIG PROBLEMS WITH SALES TAXES TODAY — AND HOW TO FIX THEM ...... 5 IT'S TIME TO SCRAP PROPERTY TAXES ...... 6 ILLINOIS TOPS US IN POPULATION LOSS ...... 7 WISCONSIN - 'DARK STORE' CASES COULD COST MILLIONS IN TAXES ...... 9 WISCONSIN - FIGHTING THE “DARK STORE LOOPHOLE” ...... 11 WASHINGTON - TAX CAP MAY BE REMOVED ...... 12 TEXAS BOMA SUPPORTS PROPERTY TAX REFORM EFFORTS THROUGH STATEWIDE ADVOCACY DAY ...... 13 PENNSYLVANIA - SHOP YOUR PROPERTY TAXES AWAY ...... 13 OREGON - LAWMAKERS’ DOUBLE PROPERTY TAX ...... 14 OREGON - LAWMAKERS SEEK TO UNWIND PARTS OF 1990S PROPERTY TAX REVOLT ...... 15 NEW YORK - GOVERNOR INSISTS COMBINING SERVICES WILL LOWER NEW YORK PROPERTY TAXES ...... 16 NEW YORK - FIXING ZOMBIE HOME PROBLEMS LOCALLY, STATEWIDE ...... 17 NEW JERSEY - LONG-DELAYED REVAL TO START SOON ...... 18 NEW JERSEY - NJ PROPERTY TAX APPEALS DOWN MORE THAN HALF IN 3 YEARS ...... 19 MICHIGAN - DETROIT EXTENDS TIME TO APPEAL PROPERTY VALUATION ...... 20 ILLINOIS - A TAX HERE, A TAX THERE, A TAX EVERYWHERE IS NO WAY TO FIX ILLINOIS ...... 21 ILLINOIS HAS HIGHER PROPERTY TAXES THAN EVERY STATE WITH NO INCOME TAX ...... 22 FLORIDA - WANT A PROPERTY TAX REFUND? CONSIDER CHALLENGING APPRAISERS’ ASSESSMENTS ...... 26 ALASKA - FORGONE REVENUE THROUGH PROPERTY TAX EXEMPTIONS GROWS ...... 27 WISCONSIN - STATE SEEKS WAY TO LIGHTEN IMPACT OF DARK STORES ...... 28 TEXAS LAWMAKERS PRESENT STATISTICS THAT DEFEND PROPERTY TAX CAP BILL ...... 31 RHODE ISLAND - COUNCIL MOVES TOWARD SINGLE TAX RATE REPEAL ...... 31 OREGON - CITIES PUSH REFORMS TO INCREASE PROPERTY TAX REVENUES ...... 33 OMAHA - DOUGLAS COUNTY ASSESSOR CONSIDER OPTIONS ON PROPERTY TAXES ...... 34 NEBRASKA - ASSESSOR RESPONDS TO GOVERNOR’S PROPERTY TAX PROPOSALS ...... 35 TEXAS BILL WOULD EXEMPT ELDERLY FROM PROPERTY TAXES ...... 36

International Property Tax Institute IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles. P a g e | 2

NEBRASKA - GOVERNOR BRINGS PROPERTY TAX PROPOSAL TO YORK ...... 37 PENNSYLVANIA - A FLAWED PROPERTY TAX SWAP IN PENNSYLVANIA ...... 38 NEVADA - FORMER NEVADA LAWMAKERS ON DIFFERENT SIDE OF PROPERTY TAX VOTE AS LOCAL OFFICIALS ... 40 NEBRASKA GOV. RICKETTS TOUTS 'MAJOR' PROPERTY TAX BILL ...... 41 WASHINGTON - CHANGE IN PROPERTY TAX FORMULA SEEN AS REVENUE STREAM FOR STATE, SCHOOLS ...... 41 WASHINGTON - 'EXTRAORDINARY REVENUE' AND RECORD TAX COLLECTIONS FOR D.C. IN '16 ...... 43 PENNSYLVANIA - LOCAL MAN STUDIES REASSESSMENTS, SUGGESTS AN AUDIT...... 44 NEW YORK - WHAT IS STAR TAX PROGRAM AND WHO QUALIFIES? ...... 46 NEW YERSEY - GOV. CHRISTIE HAS A LAST SHOT AT MAKING PROPERTY-TAX-REFORM HISTORY, SAYS CARL GOLDEN ...... 47 NEBRASKA - SPECIAL INTERESTS BLUNT PUSH FOR PROPERTY TAX RELIEF ...... 49 ILLINOIS - NE SUPREME COURT HEARS PROPERTY ASSESSMENT CASE ...... 50 ILLINOIS - OPINION: A SOLUTION TO THE PROPERTY TAX PROBLEM ...... 50 FLORIDA - GOVERNOR RICK SCOTT IS PROPOSING SPENDING $558 MILLION MORE ON PUBLIC SCHOOLS THIS COMING YEAR BUT, IT'S NOT THE STATE THAT WOULD BE PUTTING THE MONEY UP, IT'S LOCAL TAXPAYERS. ... 51 TEXAS - HOW MANY LOCAL GOVTS. LEVY A PROPERTY TAX?...... 52 NEW YORK - DE BLASIO INVOKES TRUMP TO MAKE CASE FOR NYC 'MANSION TAX' ...... 53 NEW JERSEY - HOW SHOPPING IN THIS TOWN CAN CUT YOUR PROPERTY TAXES ...... 54 CONNECTICUTT - TIME TO EXPLORE A NEW PROPERTY TAX SYSTEM FOR CONNECTICUT ...... 55 ALASKA - EVALUATING ANCHORAGE PROPERTY TAX ASSESSMENTS ...... 56 WISCONSIN - RETAILERS SEEK TAX CUTS WITH 'DARK STORE' THEORY ...... 56 ILLINOIS - ROCHESTER SCHOOL DISTRICT OPPOSES CREATION OF TIF ...... 59 ______

NEW JERSEY - Big-box stores can have their cake, and eat it, too

At first glance, having a big-box chain store like Wal-Mart or Lowe's come into town would seem to be a beneficial thing. With the added jobs such stores promise, and the anticipated boost to the property tax base, it seems like a no-lose proposition.

But there's another aspect to having these big box stores that many small and mid-size communities don't often consider, and it has to do with property tax assessments.

When one of these big-box chains builds a multi-million-dollar store, you'd assume that the amount of property taxes they pay would reflect that multi-million-dollar value. Normally, the taxable value factors in everything from construction costs, to land value, to the value of any lease involved.

But, it's not always so straightforward. These days, many big-box chains lower their tax obligations by using a tactic to drive down assessments drastically. It's known as "dark store," and it alleges that a big box has no value except for its specific, initial use.

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A glaring example of this dark-store argument at work comes from Michigan, courtesy of the Institute for Local Self-Reliance. Several years ago, Lowe's built a $10 million store in Marquette, Mich., with a taxable value set at $5.2 million. After a series of appeals using the dark-store argument, Lowe's drove the assessed value down to $1.5 million a few short years later.

When the chains cite the dark-store loophole, they claim that each store is designed to be "functionally obsolete;" that it is a special-use structure, custom built, and not intended for resale or any future leasing. So, when it comes to "comparable value" that is often used to set property assessments, a store's lawyers claim that only thing it can be compared with is a vacant, empty "dark" store.

Now, you might think that if a big-box chain decided to leave a specific location, a similar retailer might want to fill the space. But the other factors at play here are non-compete clauses and deed restrictions. These big-box chains place restrictions on their new stores limiting how the building can be used by a future occupant.

These restrictions can prohibit not only reuse by direct competitors (a Home Depot moving into a vacated Lowe's, for example), but a wide range of other potential retail uses at a site generally zoned for that purpose. So, a vacated store either remains empty or is converted to a lower-value use like indoor batting cages. Either way, this drastically lowers the value of the property and potentially could reduce values of other retail stores nearby.

These tactics are not confined to Michigan. The trend is spreading around the country. If it's not happening here in New Jersey in any sizable way, it may be only a matter of time.

This is an important consideration for communities, because if they are expending serious resources on roads and infrastructure to accommodate big-box chains, the community should be entitled to use a tax assessment that reflects the location's size, heft and multi-million-dollar sales. This is especially important in light of how big-box chains impact independent and mom-and-pop stores that usually get crushed when the big guys roll into town.

Big-box chains and developers should not be able to place such blanket deed restrictions on a property, then turn around and argue that these same deed restrictions should now result in the store being assessed as "functionally obsolete." That's having your cake and eating it, too.

Municipalities can't be left in a position where anticipated revenue from these sites is reduced by 50 percent, 60 percent or more. A successful appeal can force a town to return huge chunks of money to a mega-chain in a given year.

When it comes to these stores, it may be necessary for the New Jersey Division of Taxation to provide more clarity on valuation. At the very least, these deed restrictions and "non-compete" clauses should not factor into determining comparable value -- since it was the store operator that insisted on the restriction in the first place.

Whatever may come, communities need to consider carefully all the implications of hosting big-box stores, beyond the new jobs and the initial boost to the ratable base. Future local budgets may well depend on acting wisely.

NEW YORK - 'Property Taxes Are Breaking The Back Of This State': Gov. Cuomo

Cuomo wants to give county execs power to bring 100s of local taxing entities together and an incentive to double savings for NY taxpayers.

New York's county executives will be given the authority to convene the local taxing entities to come up with a joint plan for reducing local property taxes, Gov. Andrew Cuomo announced Thursday at a 10 a.m. press conference in Haverstraw.

"Property taxes are breaking the back of this state," he said, using Rockland and Westchester counties as examples. The average Rockland taxpayer pays $1,200 in state taxes and $9,000 in property taxes, he said; the average Westchester taxpayer pays $1,800 in state taxes and $13,000 in property taxes annually. Westchester has the highest property taxes in the country.

"It used to be you asked, could you afford the mortgage, now it's can you afford the property taxes," he said.

The state-imposed tax cap has made a difference, but not enough, he said.

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He did not recommend consolidating governments. But he did point out that New York has one of the highest percentages of local governments in the country, roughly 900 towns, 62 cities, 500 villages and 6,000 special districts — and more.

"The number of special districts has ballooned over the years," he said. "We have set up this system where everybody's separate, everyone has their own little fiefdom."

But, he said, a system set up by the Dutch and the British 300 years ago doesn't have to be slavishly held to in a world with the internet and decent transportation, and when there's a lot of change and political unrest across the country.

His proposal doesn't change the number of jurisdictions. It just gets all those jurisdictions into a room to make a plan for savings and take it to residents for a vote. "If the people don't support the plan, back in the room," he said.

"I understand the people like the identity of their local town, local village, but I don't think people care if they share a dump truck," he said. "Do you feel possessive about the sewer pipes? Do you care if they co-locate offices?"

For example, he said, there are 102 local government taxing entities in Rockland. There are 47 different offices.

"You can't tell me that you can't sit down at a table and find savings," he said.

And under the proposal, whatever savings a county comes up with at the end of the year, the state will match, he said — doubling the savings to the taxpayer.

CALIFORNIA - Why is the Fire/EMS tax so high?

For the past couple of years, there have been extensive discussions of how to best provide the Fire/EMS safety net that protects the treasured and oft visited Sonoma County Coast. The Bodega Bay Fire Protection District, the key provider for a long stretch of the area, has been a focal point in those discussions — in great part because the District has taken the initiative to explore and propose alternatives to the current, troubled system.

Central to the discussions is the fact that the citizens of Bodega Bay, through their Fire/EMS tax — which is one of the highest in the state — have been carrying the cost of protecting the non-residents and tourists who visit.

This tax is paid in addition to the area’s property tax. Why is the Fire/EMS tax so high? For two reasons:

First, the beneficial Sonoma County and State land use policies -- policies that create and nurture open space and conservation land use and state and county parks -- have severely reduced the Bodega Bay tax base; more than 50% of the land cannot be taxed at a rate sufficient to support the services it demands. On that land are high risk uses -- campgrounds, parks, cliffs, rocks, beaches, waterways, and scenic, dangerous roads and highways -- areas for which the Bodega Bay Fire Protection District provides the safety net.

Second, as a post-Proposition 13 fire district Bodega Bay receives a very reduced share of the property tax generated in Bodega Bay. The assessed value of taxed property in Bodega Bay is around $810,000,000. Mind you, that’s the land that is left to tax -- the other 50%. From that tax, the county receives around $8,000,000.

What does the county send back to the District for the safety net? Less than 1% -- $255,000. That’s the impact of being a post- Prop 13 district. Were we a pre-13 district, like many around us, we’d get back more than 12% -- around $960,000. Where does the rest of our money go? To subsidize other county programs.

We have a property tax problem. We start with a smaller pie, restricted taxable land, and receive but a sliver of tax revenue it generates.

And, that’s but the start of the problem.

Now, add 4-5,000,000 tourist visits to the area -- tourists who rely on our safety net for protection -- and you begin to see the magnitude of the problem.

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Many tourists are driven to the coast by a high power advertising program funded in great part by the TOT (Transient Occupancy Tax -- the tax levied on those who stay in an area).

Last year, the county collected more than $3,000,000 TOT in Bodega Bay. TOT is, perhaps, one of the most valid indicators of the impact tourists have on an area; it shows who is really there. Bodega Bay is one of the two most heavily tourist impacted areas in the county.

So, how much of that TOT comes back to Bodega Bay to protect the tourists from whom the money is taken? Almost none. Last year, less than $20,000 of the $3,000,000. And, it is not guaranteed. We have to compete for it each year.

So, who is paying to protect all of these visitors?

For the most part, the 1077 residents of Bodega Bay -- through our fire tax, which is one of the highest in the state.

It is the disproportionately high fire tax -- a tax driven by the fact that we have a restricted tax base, an unfair distribution of the tax moneys raised in the district, and an influx of non-residents to protect that has created the financial issues about which much has been written.

Those issues are the reason the Bodega Bay Fire Protection District has been working to create a sustainable funding base that will provide 24/7 all risk coverage, rapid response times, and sufficient redundancy to ensure that there is coverage should multiple incidents occur simultaneously.

Fire and emergency services -- no matter how provided -- are at a turning point. Some fire districts, like Bodega Bay -- with full time staff, have financial issues. Ours have been explained above. Our brother and sister volunteer companies have issues, too. It has become increasingly difficult for them to attract volunteers. Be it a product of the economy where many earners need two jobs, reducing the amount of time they have to volunteer, the aging of the population, the movement of young people from rural to urban areas where the jobs are, or the limited supply of affordable housing in the coastal areas, it is harder to recruit and keep new volunteers.

And, that is why, despite the hurdles of time and tradition, we are all engaged in a dialogue to determine how we might all join together to best serve the communities in which we live.

USA - Three Big Problems with Sales Taxes Today — and How to Fix Them

Sales tax rates are talked about frequently, but policymakers spend less time focused on sales tax bases—the basket of transactions that the sales tax applies to in a given state. That’s a shame, because there are three big problems with sales tax bases today, and policymakers have an opportunity to fix these issues.

Public finance experts generally agree that a properly-structured retail sales tax should apply to all final consumption so that you have a broad base and can levy a low rate. However, in practice most states have sales taxes that fall short of this ideal on three counts: They do not tax services They exempt many final consumer goods that should be taxed They tax business-to-business transactions that should be exempt Let’s unpack each of these problems one by one.

Most states do not comprehensively tax services as an accident of history

The first sales tax was enacted in Mississippi in 1930 as a reaction to falling property tax revenues during the Great Depression. At the time, the consumer economy was predominantly transactions of goods. As a result, when the drafters wrote the sales tax statute, it only applied to transactions of tangible personal property, the goods sector. Forty-four states and D.C. followed Mississippi in enacting sales taxes in the following decades, and all but three (Hawaii, New Mexico, and South Dakota) for the most part adopted a goods-only tax structure.

Sales Tax Adoption by State

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This was a sufficiently broad base for a few decades, but since then the American economy has transformed to include far more services. Services now represent approximately two-thirds of consumption, and largely go untaxed by state sales taxes.

Percent of Total Personal Consumption Expenditures - Goods vs. Services

This has resulted in upward pressure on sales tax rates over time as the sales tax base continues to narrow and sales taxes bring in less revenue as a percentage of the economy. The proper solution is to broaden the sales tax base to include services, and use the revenue from that base broadening to lower the sales tax rate, or the rates of other more economically-damaging taxes.

Some states have moved in this direction relatively recently, but none in a comprehensive way that changes the default treatment of services. Most states still have a default of taxing all goods unless they have an enumerated exemption, and a default of taxing no services unless they are enumerated as taxable.

Most states exempt some final consumer transactions for political reasons

Frequently, it is argued that since some goods are “necessities,” they should be sales tax-free. In most cases this manifests itself as exemptions for particular goods like groceries, clothing, and medication.

These exemptions, while well-intentioned, have the effect of significantly narrowing the tax base, as groceries, clothing, and medication make up a large percentage of consumption, with groceries and clothing alone making up 10 percent of personal consumption expenditures in 2016, according to the Bureau of Economic Analysis.

While many argue that these exemptions are necessary to protect low-income individuals, these exemptions of course are enjoyed by anyone purchasing these products, even high-income individuals. A better, more targeted solution is to include these products in the sales tax with the interest of maintaining a broad tax base at heart, and then providing targeted relief to low-income individuals either through a credit on their income tax return, or through spending programs.

While the previous two problems deal with the sales tax base being too narrow, this last one is an area where the sales tax base can be overly broad, taxing transactions that are not final consumption. In the process of making final goods and services, businesses will often buy raw materials from each other to create products. These business inputs, or business-to-business transactions, are not final consumption, and so should not be taxed by the sales tax.

When states do tax business inputs, the costs of those taxes cascade, or “pyramid” down the production chain and embed themselves in the final price of the consumer product. Consumers end up paying the tax in the form of higher prices — they just do so in a nontransparent way.

Taxing Business Inputs Results in Tax Pyramiding

Taxing business inputs disproportionately harms industries with long production chains, and consequently can encourage vertical integration for tax reasons even if it makes no business sense.

If states were to fix these three problems, they would have not only a broad-based but a “right-sized” sales tax system that taxes each dollar of consumption once and only once. This would result in stable revenue, and would allow for a low rate that brings in ample funding for government services

It's Time to Scrap Property Taxes

Since the dawn of human civilization, governments have relied on property taxes to pay for public services.

In ancient Egypt, the pharaoh’s tax collectors levied taxes on individuals’ grain, oil, livestock, and land. When Alexander the Great conquered the world more than 2,300 years ago, he established administrators to assess local property taxes in the communities he ruled over, with some of the more troublesome nations paying more as a penalty for their disobedience. European monarchs would later assess their own property taxes, which, on occasion, led to full-scale wars between wealthy land-owning rivals. The British property tax system would eventually develop into something comparable to what we see in

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America today, and the Founding Fathers of this nation accepted the existence of property taxes as normative and necessary for the development of a proper society.

Government taxes are not inherently immoral. In fact, taxes are a necessary part of a functioning community. Without taxes, there would be no way to fund police or fire departments, the military, or necessary government agencies.

However, property taxes are fundamentally different than other forms of taxation. Use taxes, such as tolls, require only those people actually using a service to pay taxes. Income taxes and sales taxes apply levies on the transfer of wealth. Some taxes, such as Social Security taxes, are applied in exchange for a future benefit (assuming Social Security survives, of course).

Property taxes, conversely, are applied simply because a person owns something. Under virtually all modern property tax schemes, it doesn’t matter how long you own property, how much you paid when you purchased the property, or the fact that you already paid taxes (in the form of sales taxes and other levies) when you first acquired the property. The government taxes you simply because you have something that is perceived to be valuable.

This form of taxation is immoral - arguably evil - and should be permanently eliminated. Historically, most societies have viewed property very differently from Americans today, often viewing it as something that belonged both to the individual and to the state. You might be thought to “own” your little plot of land in the countryside, but the whole of the region would be considered to belong to one ruler or another. In one sense, land never really belonged to individuals. Should a king, for instance, want to take the land for his own purposes, he’d often be justified in doing so. It is, after all, his country.

In Colonial America, little had changed compared to the systems used throughout Europe; local governments assessed taxes on property, in some cases applying higher rates for more valuable property. But Americans differed in that they believed, in line with thinkers like John Locke, that individuals should have inalienable rights, especially when it comes to property. They took the English idea “a man’s home is his castle” more literally than most societies ever had, and following the American Revolution, established legal safeguards ensuring that government couldn’t seize, control, or manage private property, with the only exceptions being if the property is somehow harming the property of others or if it is absolutely essential the government take the property for the good of the public, in which case the government would have to provide fair compensation to the owner. The property tax system, however, remained intact, largely because of its widespread use.

What claim over property, however, does an individual truly have if he or she must pay the government for the right to keep the property? Although no private property belongs to the government, the government does, through property taxes, have such substantial power over property to effectively render ownership rights as nothing more than a mere privilege.

Not only do property taxes fundamentally limit owners’ rights, they are often unfairly applied and unjust, because many property owners will end up paying as much or more in taxes than they do for the property itself.

For instance, in Illinois, the average annual taxes paid on a home priced at the state median value is about $4,000. Even if home values stay the same over the next half-century - and they almost certainly won’t - a family in Illinois will end up paying $197,000 over 50 years for a house that cost only $175,000 to purchase.

In areas in which property values have skyrocketed over the past 50 years, some elderly people are effectively being forced out of their homes because they cannot afford to pay property taxes on a modest house that might now be worth $1 million because of its advantageous location.

This is not to say property tax revenues aren’t necessary. Local governments rely on the revenues to pay for schools, roads, and other basic services. But instead of charging taxes based on property values, localities should charge fees to residents for those specific services. If everyone were to pay “police department” or “public education” fees, the public would have a better understanding of what government services cost, and it would be easier to hold government accountable for irresponsible spending practices.

Illinois tops US in population loss

Eight states lost population between 2015 and 2016, and 12 others recorded their lowest population increase of the decade, as economic woes and lower birth rates hit some states harder than others.

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Connecticut, Illinois, Mississippi, New York, Pennsylvania, Vermont, West Virginia and Wyoming lost population. The last time so many states registered a drop in population was from 1986 to 1987, when oil prices collapsed. Twelve Western and Southern states, along with the District of Columbia, lost population then.

Meanwhile, Alabama, California, Hawaii, Kansas, Louisiana, Maryland, Massachusetts, New Jersey, North Dakota, Oklahoma and Virginia saw anemic growth of between 0.02 and 0.66 percent in the number of people living inside their borders. That’s less than the nation’s increase in population of 0.7 percent and the lowest growth those states had experienced since 2010.

The reasons behind the declines vary. Some reflect national mortality and birth trends, as more deaths occur as the population ages and the millennial generation has fewer babies. That has led to the slowest population growth in the U.S. in 70 years, Brookings Institution demographer William Frey points out.

Pennsylvania, for instance, had 7,677 fewer people in 2016 than it did in 2015, after having experienced growth every year since 1996. The major reasons: an increase in deaths, a decrease in births and fewer foreign immigrants than other states have.

“There are more and more of us at ages where deaths are more numerous,” said Herbert Smith, director of the Population Studies Center at the University of Pennsylvania.

A state’s economy also plays a part. Like in 1986, the economies of energy-producing states such as Kansas, North Dakota, Oklahoma, West Virginia and Wyoming have suffered from low oil, natural gas and coal prices. People flee a state when jobs evaporate to find work elsewhere if they can.

West Virginia and Wyoming are the two largest coal producers in the country. As coal production declined, West Virginia lost 9,951 people from 2015 to 2016, its fourth straight year of population loss. Wyoming lost 1,054 after having steadily gained population since 1999.

Americans are moving again in more rapid numbers after hunkering down during the recession. And people’s ability to move, as their personal finances or job outlooks have improved, “is now critical to whether a state gains or loses population,” said Kenneth Johnson, a demographer at the University of New Hampshire’s Carsey School of Public Policy.

Aging baby boomers are moving to the Sun Belt or other lower-cost states to retire. Florida’s population, for instance, is among the nation’s fastest-growing. Workers who are able to move and get a job elsewhere will escape high cost-of-living states. And when businesses find high taxes, high labor costs or a shortage of workers and can move, they will and take the jobs with them.

Idaho, Nevada and Washington state are experiencing some of the fastest economic and job growth in the nation. And their populations are growing along with that, rising at more than twice the national growth rate from 2015 to 2016.

High state and local tax burdens may not force people to pick up and move. Most often it’s for jobs, higher pay or a desire to retire elsewhere. But taxes contribute to the cost of living and factor into people’s thinking about moving, some research indicates.

Isaac Martin, a University of California, San Diego sociology professor who wrote about the effect taxes had on moving last year, found that the burden of property taxes will prompt some homeowners to move. But that most often happens when they have suffered a drop in income, caused by a job loss or retirement. “These are not people whose property taxes went up, but rather people whose incomes fell,” he said.

The nonpartisan Tax Foundation, which advocates low rates, said in a new assessment of migration between the states last year, “Taxes are not the sole factor why individuals migrate … but a relationship does exist.”

Some people in Illinois, which lost 37,508 people, the most of any state, think so. When asked in October whether they would like to leave the state, about half the people polled by the Paul Simon Public Policy Institute at Southern Illinois University said yes. The most cited reasons: taxes and weather.

Illinois and three other states that lost population — Connecticut, New York and Vermont — had among the highest median property taxes in 2015. That’s something that Republican Gov. Bruce Rauner would like to change.

Rauner asked legislators to freeze property taxes in his Jan. 25 State of the State address, calling for “property tax relief to reduce the immense burden felt by our families and businesses — and to give them reason to stay here.” International Property Tax Institute IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles.

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Property taxes also are on the mind of Democratic Gov. Andrew Cuomo in New York.

“Property taxes are what is killing this state,” Cuomo said in a Jan. 10 State of the State address in suburban Westchester County. New York City suburbs like Westchester dominate the list of highest property tax bills in the country, according to a 2015 study by Zillow.

If businesses and the jobs they provide leave, so do people. So some states are seeking to hang on to the businesses they have and attract new ones by improving their business tax climate.

Fast-growing Florida, Nevada and Utah rank high on the Tax Foundation’s “State Business Tax Climate Index” for this year. Connecticut, which lost 8,278 people, and New York, which lost 1,894, rank near the bottom.

In an effort to “improve the business climate” and keep the insurance industry and the 58,000 jobs it creates in Connecticut, Democratic Gov. Dannel Malloy on Monday proposed lowering a tax on insurance premiums. “We must ensure that we maintain our competitive edge so that (insurance companies) continue to thrive and grow in our state,” he said.

WISCONSIN - 'Dark store' cases could cost millions in taxes

HOWARD - An aggressive move by some major retail chains is putting homeowners in parts of Brown County and a number of other areas of Wisconsin at risk of a property tax jump in the coming years.

The action by retailers like Menards, Target, Lowe's and Walgreens has cost taxpayers millions of dollars in Michigan and Indiana. Oshkosh had to refund more than $300,000 in taxes and fees. Howard, the Howard-Suamico School District and the county could wind up owing thousands to Menards.

It works like this: Retailers challenge their property assessments, citing similar — but vacant, or "dark" — stores, claiming their buildings are worth millions of dollars less than they've been assessed for by local governments, which typically set values based on both the building and its use.

In many cases, they've won so decisively that a Bloomberg headline said stores have "weaponized" the approach.

When retailers win, the other taxpayers lose. Municipalities have two choices: Cut services — sometimes dramatically — or make the rest of the community pay more in taxes. About 70 percent of municipal tax collections comes from homes. Smaller communities are hit particularly hard due to their smaller tax bases.

"What happens if the assessments of large format retailers get chopped in half?," asked Howard Village Administrator Paul Evert. "All the other taxpayers pick up the slack."

How much slack? Howard has assessed the Menards and its 18.7-acre site at 2300 Woodman Drive at $12.45 million. Eau Claire-based Menard Inc. acknowledges it spent $10.6 million to buy the land and build the store, but claims in legal papers that the site is worth only $5.8 million.

In papers filed in November, the retailer demands that Howard provide a refund, with interest, and pay its legal fees. "The 2016 assessment of the property was excessive," wrote Christopher Strohbehn, a Milwaukee attorney. "The tax imposed on the property was excessive."

The company listed several stores as comparable to its Howard facility, including a Cub Foods in Green Bay, a Sears in Sheboygan and a former Home Depot in Beaver Dam. The three have something in common. None has operated as a store for years.

With Menards paying $209,000 in taxes this year, the communities that tax it would have to refund about $111,000 if the store wins the case.

'A real problem'

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Communities including Ashwaubenon and Howard and the League of Wisconsin Municipalities are asking the state to step in, said Patrick Moynihan Jr., the Ashwaubenon village clerk who also represents the village on the county board. A committee of county lawmakers earlier this month recommended adding their voices to that crowd, saying the state needs to adopt legislation that blocks businesses from using unused buildings to reduce taxes on working stores.

"This is causing real impacts," said Howard Supervisor Richard Schadewald. "And the only remedy we have to help local taxpayers is with the state legislature. This is a real problem."

How real? Menards' annual tax payment of Howard-Suamico School district taxes would fall from roughly $103,000 to about $48,000. For 2016, the district would have to refund the difference. In future years, the district would face a difficult choice: increase taxes next year to make up the difference, or cut its budget by a corresponding amount.

"That would be a rather large refund," said Matt Spets, the district's assistant superintendent for business services. "You're talking about one less teacher."

A reduction in the store's assessment would also mean more than $50,000 in lost revenue for others that tax the store: Brown County, the village of Howard, Northeast Wisconsin Technical College and the state of Wisconsin.

Municipalities also fear that successful challenges will prompt other businesses to take similar steps.

Retailers' side

Retail chains see the issue differently. They insist it's unfair for communities to assess based on what's inside their stories, rather than valuing only the bricks and mortar.

Additionally, modern retail store designs are fairly unique, making it sometimes difficult for a company to sell a store it no longer wants or needs. Potential resale value, of course, plays a role in how a property can be assessed. Or, like a former Walmart near Milwaukee, stores have deed restrictions that prevent them from being operated by other retailers.

The attorneys listed in Menards' Howard case didn't respond to requests for comment last week. But in a January interview with the Journal Sentinel, one made his position clear: The value of the store is its property, not what's inside the building.

Minnesota attorney Robert A. Hill's website calls his firm "relentless advocates for property taxpayers." He said municipalities “just want to pretend that what’s black is white, and that real estate somehow should not be the only thing that gets assessed."

Municipal officials, though, says that approach defies logic.

"A brand-new Walmart is worth the same as a boarded-up Kmart?" said Deena Bosworth, director of governmental affairs for the Michigan Association of Counties. "I don't think so."

'Devastating effect'

In Michigan and Indiana, where dark-store lawsuits were an issue before they took hold in Wisconsin, impacts are being felt.

Michigan's local governments have issued more than $100 million in tax refunds since 2010, experts say. Indiana's spent an estimated $120 million. In 2015, Indiana attempted to resolve dark-store cases by establishing new assessment standards for big-box stores, but repealed them in 2016, apparently amid concerns about constitutional issues.

Before dark-store challenges became common, the average Michigan 'big box' store was assessed at $55 per foot, said Jack Van Coevering, an attorney who was chief judge of the Michigan Tax Tribunal but now represents municipalities in dark-store cases. Now, assessments of Menards and Target are less than half that.

“There’s wave after wave after wave,” he said. “Whether we’ve reached the end of the storm, I don’t know.”

An Escanaba-area library cut hours because its host community had to cut its budget. When an Upper Peninsula Lowe's brought a dark-store case last year, about 130 people protested outside the business. Northern Michigan University produced a 25- minute documentary video, "Boxed In," on dark-store impacts.

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"This has a devastating effect," the Michigan Municipal League says. "Municipalities don’t just lose future revenue, but have to pay back the retailers for 'over-taxing' them in prior years."

Communities also incur costs to fight the challenges. A Port Huron Menards sought a $2 million cut to its 2014 and 2015 assessments. A court reduced the store's valuation by $300,000.

The case cost the city more than $33,000 in legal expenses — more than it receives in taxes from the store.

Big-box retailers aren't just suing because of assessments on their stores.

ShopKo Stores Operating Co. LLC has filed legal papers saying the city of De Pere over-assessed its west side distribution center by more than $9 million. The retailer seeks an assessment reduction from $20.1 million to $10.9 million on its facility at 1717 Lawrence Drive, plus a refund of taxes it says it overpaid, and legal costs.

Shopko is represented by Christopher Strohbehn of Milwaukee, who also represents Menards in it's assessment lawsuit involving its Howard retail store. De Pere is represented by a Madison firm.

Other battlegrounds

Brown County isn't the only place where some major retailers are seeking significant reductions in their assessments. Highlights:

►Alabama: Lowe's, a $59 billion business, has filed lawsuits seeking assessment reductions on 27 stores. Officials said a loss could cost the state $1.5 million annually.

►Fond du Lac: Menards argues that the value of its store is no more than $5.2 million; the city's assessment is $9.2 million. A similar lawsuit from Target says Fond du Lac should reduce its taxes by a third.

►New York: The city of Auburn agreed this month to settle a dispute by reducing the assessment of a Walmart by about $1 million, which will give the store a tax refund of about $11,000.

►Racine: Target has filed multiple challenges to its assessment. It cites a vacant Kmart and a former Home Depot as comparable properties.

►San Antonio, Texas: Lowe's sued Bexar County, claiming its 11 area stores were worth the same as empty buildings — about $30 per square foot, rather than the $80 to $85 per square foot at which they were assessed. A court recently ruled against the retailer.

WISCONSIN - Fighting the “Dark Store Loophole”

Big box stores like Walgreens and Menards claim tax loophole. Cities oppose it.

With a resolution recently adopted by the Milwaukee Common Council, the city joins municipalities across the state, and nation, in a fight against a legal loophole allowing large corporations to massively reduce their property taxes.

The “dark store loophole”, as it’s been dubbed, allows “Big-Box” stores like Walgreens and Menards to have buildings with active business assessed at the same value as a similarly-sized vacant buildings, seriously reducing their property taxes.

This assessment change would see behemoth retailers reducing their property taxes by millions, and many municipalities are arguing it would shift the property tax burden onto small businesses and homeowners.

The “dark-store theory,” being argued by retail-giants in ongoing legal battles, is that properties should be assessed based upon the value of the building at sale: meaning empty. Opponents contend the business occurring in the building should count towards the market value of the property.

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The Common Council resolution that passed unanimously, authored by Ald. Cavalier Johnson, calls on the state legislature eliminate this assessment argument through legislation.

“We want to protect taxpayers here in Milwaukee, Milwaukee County and the state of Wisconsin,” Johnson said at the council meeting Tuesday.

The city is working with The League of Wisconsin Municipalities to urge legislators to take action on the issue. Gail Sumi, communications director for the league, says their lobby team is about to start a webinar to prepare for the effort.

Right now, the group has two pieces of legislation to be introduced, “In the next couple of weeks,” said Curt Witynski, assistant director of the league.

One bill mirrors a 2016 bill passed by the Indiana legislature relating to dark stores, and is authored by Rep. Rob Brooks (R- Saukville) and Sen. Roger Roth (R-Appleton), Witynski says.

The other bill seeks to overturn the 2008 Wisconsin Supreme Court decision on Walgreens v. City of Madison allowing “Walgreens to sell on the investment market for $5 million but be assessed for property taxes at $2 million,” Witynski says.

That bill is authored by Rep. Brooks and Sen. Duey Stroebel (R-Saukville).

During the Common Council meeting Tuesday, Johnson noted that in some areas of Wisconsin as much as 50 percent of the tax burden has been shifted to property owners.

Research by the League of Wisconsin Municipalities shows Milwaukee County communities like Wauwatosa could see homeowners’ property tax increase by 7 percent. This would translate to, on-average, about $380 more per year.

This is what Johnson was talking about when he introduced the new resolution to the Judiciary and Legislation committee on Jan. 30 saying, “We don’t want the property tax burden to shift more, we want it to remain equal.”

But massive retail chains have already begun litigation in communities across Wisconsin arguing for lower valuations. According to the league, a “real world example” is the Lowe’s at 12000 W. Burleigh Street. The company argues the market value for that property is $7.1 million, while the city assesses it at $17.7 million.

That potential $10 million gulf in valuation is an example of what has communities worried, and why cities like Milwaukee are urging the Legislature to take action.

WASHINGTON - Tax Cap May Be Removed

SPOKANE, Wash. --- A new bill being considered in Olympia may raise property taxes in individual counties and cities. This could mean more out of your pocket.

House Bill 1764 could provide relief for cities and counties across Washington that have been forced to cut workers and services as budgets become tighter.

Back in 2002, Washington State put a one percent cap on the annual increase property taxes could see, which becomes a problem when costs increase more than one percent.

Each year the county is legally able to increase its budget by one percent. The problem arises when inflation and growing costs sit closer to five percent each year. Over the years that begins to take its toll on city and county budgets.

KREM 2 News spoke with Lincoln County commissioner and the mayor of Rosalia on the phone about the issue. They both said they have to cut workforce, programs and infrastructure spending.

Local law enforcement agencies have also felt the tightening purse strings, including the Spokane County Sheriff’s Office. From 2008 to 2010, SCSO lost 34 deputy positions.

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“It's almost been a decade since that time, you know we're in 2017 now, those positions have not come back. The community continues to grow, and our ability to protect the community continues to diminish. ... I'm at the point of buying used cars for the deputies," said Sheriff Ozzie Knezovich.

House Bill 1764 has bipartisan support within the state, county and city governments across Washington.

If the bill becomes law, it will let local communities across the state determine their own property tax increase policies and account for factors like population growth and inflation. The bill could mean higher taxes for some.

A committee hearing was held Friday to discuss the bill. The bill has a long process ahead before it could become law, and after that it would be up to individual counties and cities to increase property tax rates.

Texas BOMA Supports Property Tax Reform Efforts through Statewide Advocacy Day

Texas Building Owners and Managers Association (Texas BOMA) is deeply concerned about the uncertain and unfair tax appraisal processes in Texas.

Commercial properties across the state have experienced a sharp increase in valuations in recent years. BOMA's Economic Impact Studies show valuations in Texas have risen 100 percent over the past five years in some areas, making it difficult for Texas' small businesses to accurately plan for the future and putting economic growth and jobs at risk.

In 2014, Texas BOMA launched Taxed Out of Town, a statewide initiative advocating for Texas property tax reform, to inform the public and elected officials that commercial real estate does pay its fair share, and to demand a uniform and equal appraisal process as guaranteed by the Texas Constitution.

To continue these efforts and bring attention to the inequities in the current property appraisal system, hundreds of Texas BOMA members will attend statewide Legislative Advocacy Day in Austin, Texas on February 21 and 22, 2017.

Advocacy Day is the best opportunity to communicate real estate legislative concerns in a unified fashion to State Representatives and Senators. Texas BOMA's participation helps maintain ongoing relationships with legislators and their key staff, and ensure important issues receive attention.

This year, Advocacy Day is more important than ever. Following years of substantial increases in property valuations, State Senator Paul Bettencourt has introduced the Senate Select Committee on Property Tax Reform & Relief Senate Bill 2 (SB 2), the Texas Property Tax Reform and Relief Act of 2017. With Texas BOMA's support of SB 2, and Lieutenant Governor Patrick solidly supporting tax reform efforts, Texas is uniquely positioned for positive change going into the 2017 Legislative Session.

"Businesses and commercial property owners need relief in the form of repealing, replacing and reducing the current tax rollback process and rate, as well as holding appraisal districts and their officials accountable," said Brett Williams, President of Texas BOMA. "We commend the tireless work of State Senator Paul Bettencourt, the Senate Select Committee on Property Tax Reform & Relief, and Lieutenant Governor Dan Patrick over the last year, and strongly support their recommendations laid out in SB 2. Texans deserve meaningful tax relief and property appraisal reform."

While great strides have been made toward property tax reform, Texas BOMA continues to rely on the assistance and unified voice of tax payers throughout Texas to take a stand against unfair tax practices and policies. Texas BOMA is a non-profit association that advocates on the behalf of its members in the Texas commercial real estate industry, and to find out more visit www.bomatexas.org.

PENNSYLVANIA - Shop Your Property Taxes Away

Some New Jersey townships offer property tax rebates for residents who shop locally. Could this catch on?

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On a sidewalk bench in Haddonfield, across Kings Highway from the Bistro, two frosty-haired high-heeled ladies are locked in perpetual conversation. Cast in bronze — the work of sculptor Seward Johnson — they sit day and night. It was raining steadily when I first encountered them in January. And while I couldn’t hear what they were saying, I felt certain they were trading notes on how much they planned to lower their property tax bills this year just by shopping in downtown Haddonfield.

In November, before the holiday retail season, borough officials announced the new Shop Haddonfield property tax reward program. It’s meant to encourage residents to patronize local businesses by essentially lowering their property taxes without costing the township a dime. How it works is simple — sort of. When residents buy something at a participating downtown shop or restaurant, they swipe their “property tax reward card” to receive a discount. But rather than collecting the savings on the spot, they get a credit against their property tax bill. Businesses choose whether to participate and set their own discount rates. Most hover between five and 10 percent.

The Partnership for Haddonfield, the corporation that manages the local business improvement district, felt it needed at least a dozen businesses in order to launch the program, says Haddonfield mayor Jeff Kasko. It signed up 20 right off the bat.

To some business owners, the reward program is a no-brainer — even though the money comes out of their own pockets. Rob Everitt, who gives a 10 percent discount for shoppers at Community Bikes and Boards, likens it to good, cheap advertising. Jax Boutique co-owner Jamie Gorczynski says the discount is drawing in people who previously didn’t shop downtown. Other businesses have chosen not to participate because of narrow profit margins, says Remi Fortunato, the town’s retail recruiter.

If this sounds like some roundabout scheme to lure out-of-town developers, it’s really not. The program is akin to local currency movements that occasionally spring up, like Ithaca Hours in that New York city or Bay Bucks in San Francisco. Like the town- wide gift certificates Haddonfield also offers, it’s an attempt to keep money circulating around a micro-economy. In effect, it’s an ever-so-slight shift of the residential property tax burden. New Jersey’s is the nation’s highest.

“We don’t have big box stores or malls or offices and things like that,” says Kasko. “So yes, the property tax burden is pretty high in Haddonfield because it’s so residential. Plus, it’s small, and it’s built-out.” Sponsored Content

The program seems to be catching on in other small New Jersey municipalities. Fincredit, Inc., the company that manages the rewards cards (and keeps 25 percent of the discount in every transaction), started administering the program in Marlboro Township in 2012. Since then, it’s been adopted by more than 20 towns, with half a dozen more in the pipeline, according to Fincredit founder Carmine DeFalco.

Typically, towns see 30 to 40 percent of their residents sign up for the cards; half of those actually use them, says DeFalco. Voorhees is in its third year and, according to mayor Michael Mignogna, has signed up 54 businesses and 2,500 households. So far, residents have spent $2.8 million on discountable purchases and earned a total of $200,000 in tax credits, Mignogna says.

“We are at a point where townships find us,” DeFalco says. “We no longer knock on their doors like we used to.”

So could such programs take root in Pennsylvania? On one hand, the discounts are pretty small. Say you spend $200 at a store that offers a 10 percent discount; the store loses $20 on the purchase, Fincredit gets $5, and you save $15 on your taxes. The township, meanwhile, keeps its budget intact. To make such discounts attractive, the program needs to tap into a well of frustration about local property taxes. In that sense, it could catch on all over America. But it’s tailor-made for the Garden State

OREGON - Lawmakers’ double property tax

By Taxpayer Association of Oregon,

Among the first bills introduced this year is HJR 1 which raises two different property taxes on your property.

HJR 1 tears down the laws that limit how much you can be taxed on your property. Over 20 years ago voters put in the Oregon constitution two important limits on the government’s ability to tax people’s homes. These sacred measures are Measure 5 (1990) and Measure 50 (1997). Your property taxes are significantly lower today because of Measure 5 and Measure 50.

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HJR 1 aims to break apart both Measure 5 and Measure 50 to unleash a limitless stream of new property taxes to fill the government tax coffers.

First, HJR 1 creates a 20% increase in your property taxes for schools by jacking up the tax cap created by Measure 5 (1990). This alone could cost you $1,500 in higher property taxes.

Second, HJR 1 removes the constitutional cap on property tax assessment increases (repeals Measure 50). It changes property taxes to be based on real market value instead of the traditional lower assessed value. This alone could cost you $1,880 in higher property taxes.

These two massive tax increases in this one single bill could cost you $3,380 in higher property taxes.

– The elderly on limited income will be taxed out of their homes

– Every single business, restaurant, factory and coffee shop will witness an explosion in higher taxes on the property they stand on.

– People lifting themselves out of poverty will be pushed back down and many first-time homeowners will be stuck in a never ending renters trap.

OREGON - Lawmakers seek to unwind parts of 1990s property tax revolt

Lawmakers might ask Oregonians to reconsider part of their 1990s-era property tax revolt -- and perhaps get a tax break in return.

Their proposal would unwind a 1997 rewrite of the property tax system that effectively divorced property taxes from home values to guard tax rates against hot market surges.

But over time, it's created situations in which homeowners with comparable properties are thousands of dollars apart on their tax bills. The system also tends to benefit those whose neighborhoods have gentrified since the '90s while shifting more of the tax burden to poorer neighborhoods.

"We're trying to remove the inequities that exist in property taxes here," said state Sen. Mark Hass, D-Beaverton, who chairs the Senate Finance and Revenue Committee, which is leading the effort. "Homes of equal value are paying vastly different property taxes, which is just a basic unfairness we have to remove."

A solution is elusive, however, because it generally means somebody's tax bill is going up -- and because it requires a voter- approved amendment to Oregon's Constitution.

A 2015 analysis by The Oregonian/OregonLive showed that a return to rates based on home values would lower property taxes for most Portland-area homeowners, assuming the amount of taxes collected overall stayed the same.

Swaths of North, Northeast and Southeast Portland are getting tax breaks while homeowners in east Portland and Southwest Portland pick up the bill.

The proposal before Hass' committee, Senate Joint Resolution 3, would take a similarly revenue-neutral approach by being paired with a "homestead exemption," which would exclude part of a home's value from taxation. Senate Bill 151 contains a placeholder exemption of $10,000, that likely would be closer to $100,000, Hass said.

The measure also would shift more of the tax burden to commercial property owners, whose property tax rates have stayed relatively low compared with rising property values.

But even when reform might be in their best interest, voters are wary of tinkering with a system that has kept tax bill increases slow and steady.

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Polling from the League of Oregon Cities in 2013 found that many voters don't fully understand how the property tax system affects them personally, so their opinion of reform is easily swayed by how the question is framed.

"Great ideas get defeated at the ballot all the time," Sen. Brian Boquist, R-Dallas, said at Tuesday's hearing.

The latest proposal still has wrinkles to iron out.

For example, a homestead exemption could have vastly different outcomes across the state. Large tax districts in Multnomah County, for example, probably would see a windfall because of its high home values and glut of commercial property, while those in more rural counties would come up short. Small cities that are primarily residential could take a hit, while those with large swaths of commercial areas could get a boost.

Such disparities could partially be addressed by tailoring the homestead exemption to each county by benchmarking it to the area's median home price, Legislative Revenue Officer Paul Warner said.

Any property tax reform might prove an especially heavy lift this year, as the legislature grapples with proposals to raise business taxes and institute rent control.

The Oregon Association of Realtors took a neutral stance on the proposal in a hearing Tuesday, but its chief lobbyist called the ideas "intriguing."

"As advocates for homeownership, Realtors understand there's winners and losers in the current system," said Shawn Cleave. "I just want to make sure we're in the room as the fine details are worked out."

Cleave said the association's members also represent commercial and industrial property owners, so any proposal that shifts too much of the property tax burden to them would be concerning. The association also opposes proposals that reset property taxes upon sale, which can discourage homeowners with restricted property taxes from re-entering the market.

The bill has the support of the League of Oregon Cities, which also endorsed other reforms that would let cities vote to raise more revenue through taxes. They include a repeal or revision of 1990's Measure 5, which limited property tax to 1.5 percent of a home's total value.

Hass said those add-ons probably won't happen, if the bill is going to succeed.

"What I don't want is to have all these technical bills or other legislators' pet projects to collectively derail the proposal we have, which is fixing the property tax system and modernizing the business tax," Hass said. "If everybody understands that nobody's going to have exactly what they want, that this isn't going to solve all the problems, then I think we have a chance of getting it."

The Senate Finance and Revenue Committee will discuss the proposals again on Tuesday.

NEW YORK - Governor Insists Combining Services Will Lower New York Property Taxes

A plan by Gov. Andrew Cuomo to reduce local government costs with the overall goal to lower property taxes has been met with question marks by state legislative leaders.

"It's getting vetted right now. It's really interesting to get the feedback from local governments. To me, it's just confusing," said Senate Majority Leader John Flanagan, R-Smithtown.

Cuomo's plan puts the focus on county leaders. County executives or county administrators would be required to develop proposals for sharing services or consolidating functions among local governments. The plan would then be voted on by voters in November.

Onondaga and Broome county leaders are already undertaking similar cost saving projects, but there's skepticism among local government leaders, as well as lawmakers who question how far the proposal will go.

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"That kind of stuff will get worked out," said Flanagan, "but I'm not sure how it would really work or if it would work well."

New York ranks among the highest property taxes in the country. That growth has slowed in recent years with a cap on increases championed by Cuomo, but reducing the number of local governments has been a persistent goal for the governor.

"Whether that effort will actually produce plans that people will then vote on that will then actually save money, there might be some more simple and direct ways to achieve savings rather than put counties through that effort," said Comptroller Tom DiNapoli, D-New York.

Others like Ron Deutsch of Fiscal Policy Institute say Cuomo should be focusing on reducing mandated costs placed on local governments by Albany.

"The state needs to step up to the plate, pay for some of these mandates and that will relieve some of the property tax burden that middle class families are pinched with," said Deutsch.

Cuomo has argued he's tackled the biggest mandate in New York by capping the growth of Medicaid costs.

NEW YORK - Fixing Zombie home problems locally, statewide

The city of Batavia deserves the pat on the back it is getting as state legislators consider a bill that would authorize other municipalities statewide to do what Batavia has done to curb its “zombie” property problem.

The city began focusing a few years ago on a worsening problem of properties being abandoned, left to deteriorate into so- called “zombies.” In some cases, homeowners had died without clear provision for ownership to transfer to someone new. In other cases, people lost their jobs, couldn’t pay the mortgage and lost their homes to foreclosure. The banks and other lending institutions that foreclosed on these properties didn’t always maintain them. Empty and abandoned, these homes deteriorated. Roof leaks weren’t repaired; lawns weren’t mowed; broken windows weren’t replaced. The homes became eyesores and an attraction for vandals and trespassers. Not something anyone wanted in their neighborhood.

Heeding complaints of neighbors, the city began exploring ways to keep homes from deteriorating into zombies. It began working with PathStone to avoid foreclosures, identifying homes at risk of foreclosure and linking them with resources. It also pursued state approval to create its Residential Redevelopment Inhibited Property Exemption program. That is the program that State Sen. Michael Ranzenhofer would like to see expanded statewide.

Legislation introduced by Sen. Ranzenhofer would amend the state’s real property tax law to authorize municipalities to exempt homeowners who purchase, fix up and then live in the single-family homes from paying much of the assessment increase that results. There’s not much incentive in putting a lot of money into a deteriorated property only to find the assessed value – and property taxes – soar. This program eases the transition, making the fixing up of these properties more appealing.

“Batavia had very forward-thinking administrators who saw this as a good idea,” Sen. Ranzenhofer said. “And we agreed. It’s a win for the city, and the homeowners and the neighborhoods.” Batavia’s RRIPE gives participating homeowners a 25-year exemption off the top of their assessments, based on the redevelopment costs of the home. City Manager Jason Molino has said dozens of vacant homes are potentially eligible and he hopes the first RRIPE-supported project will be completed this year.

When other municipalities saw what Batavia was able to do, Sen. Ranzenhofer said, they wanted the ability to do it, too. Zombie homes are a problem statewide. State officials estimate there are 6,000 such properties in New York State. Some state help was given 76 municipalities awarded grants under the Zombie Remediation and Prevention Initiative last year. Under that program, the city of Batavia was awarded $66,500 and the village of Albion, $75,000. In order to apply for the grants, a municipality had to have at least 100 zombie properties.

What makes this idea such a good one is that it is not a handout. Rather, it is a helping hand to homeowners who want to help themselves. Instead of punishing them with a higher assessment for the money and sweat they have poured into reviving a property, it rewards them. It costs taxpayers nothing because if the properties hadn’t been rescued, less tax would have been generated by deteriorated properties, indirectly raising the taxes of other homeowners. RRIPE saves neighborhoods and it saves money. It’s a good idea and it came out of our hometown city of Batavia.

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NEW JERSEY - Long-delayed reval to start soon

City urges residents to attend hearings to allay fears

Jersey City officials announced last week that the first city-wide revaluation of property since 1988 is set to start. Revaluations can be politically unpopular because they bring old homes up to current tax rates.

City Council members learned at their Feb. 6 caucus that the last state requirements have been met to clear the way for the city to start the process.

Although the council voted last fall to hire a company to conduct a new revaluation as part of a state mandate, a delay ensued when the state also required the city to update its tax maps.

Despite having already prepared tax maps for a revaluation started then stopped in 2013, city officials said the state needed certain areas clarified, including properties surrounded by taxable properties that which appeared to have no assigned ownership, and condo properties that needed to be listed individually, rather than as part of one large condo development.

Early in 2016, state tax officials told the city that the process must be completed by November 2017.

Revaluation reassesses the value of all properties up to their actual potential sales value. This may help people who bought newer properties that went down in value. However, many properties in the city are assessed at values that are decades old compared with more recent properties constructed or sold.

While a revaluation theoretically would increase the potential tax on older homes, city officials say the impact might not be as drastic as people would expect. The overall value of the city property tax base will rise, and the tax burden will be spread out across many more properties, so that could lessen the impact on individuals.

Since Jersey City has not conducted a revaluation in 28 years, the average property is assessed at 27 percent of its market value. Any figure under 80 percent, the state contends, is in violation of state statutes and requires the city to conduct a revaluation.

Business Administrator Robert J. Kakoleski said the city will hold public hearings in each of the sixth wards, as well as before neighborhood associations, to talk about the process and the possible impact of the revaluation.

“We will conduct at least one hearing in each ward as well as more focused hearings in places such as senior buildings or before neighborhood associations that may want them,” he said.

These events will explain the process by which the revaluation will take place and what residents should expect, and will listen to and respond to public concerns, city officials said.

“In some cases, these issues will be different, depending on the hearing,” Kakoleski said. “The issues for seniors will likely be different from those of a neighborhood association. So the public hearings will address each.”

Although many homes were inspected during the previous attempted revaluation, this information is already out of date and so the revaluation must start from scratch, city officials said.

The city started a revaluation in 2012 under Mayor Jerramiah Healy then this was delayed in order to update tax maps. The revaluation kicked off in early 2013. But when Mayor Steven Fulop took office in July, 2013, he halted the revaluation.

Fulop argued that there was a conflict of interest involving Realty Appraisal, a West New York firm hired to perform the revaluation, since an employee of Jersey City at the time went on to work for the company. But courts ruled against the city, and ordered the city to pay for the portion of work done up until Fulop ordered the reval to stop. The city has appealed that decision.

Last September, the council approved a $4.4 million contract with Appraisal Systems, the lowest of three bids submitted to the city. This was opposed by Councilmen Michael Yun and Richard Boggiano.

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Boggiano called the new revaluation “a waste of money,” and said the first revaluation should never have been halted. He originally raised concerns about the negative impact the revaluation might have on older home owners, but had a change of heart after learning some details about the potential revaluation on future taxes.

The revaluation comes at a time when Fulop is running for reelection and control of the city council could potentially shift. Many expect this to become one of the central issues of the campaign, as those opposed to Fulop and some of his development policies play up the fear of potentially higher taxes.

The Fulop administration, which is expected to announce dates for the public hearings shortly, has encouraged people to come out, ask questions and get answers, before they get barraged with misinformation.

“We will be holding public meetings soon, within a few weeks, in each ward,” said Jennifer Morrill, spokesperson for the city.

NEW JERSEY - NJ property tax appeals down more than half in 3 years

Property tax appeals in New Jersey fell for the fourth straight year in 2016 to their lowest level since 2008, an indication people were less stressed about the value of their homes and, by extension, the condition of the overall economy.

However, the number of appeals, 49,286, remained higher than it had been in any of the dozen years leading up to the financial crisis of 2008.

“Better” doesn’t mean fully recovered.

“It’s a combination of the market value of properties appreciating over the last few years, since the downturn in the market, and also you’ve seen more reassessments or revaluations completed in municipalities, bringing the values back to market,” said Martin Lynch, president of the Association of Municipal Assessors of New Jersey

Before the recent declines, the number of appeals had climbed for six straight years – a fivefold jump that peaked at more than 116,000 appeals in 2012, following by almost 106,000 more appeals in 2013, when people saw that homes were selling for less than what their properties were assessed.

“The peak of the appeals was really a direct result of a huge downturn in the market, and now that the market began to recover and values are appreciating, there’s just not a need for the assessment appeals to be filed,” Lynch said.

The numbers of appeals closely, and inversely, track whether property values are going up or down, said Michael Darcy, executive director of the New Jersey State League of Municipalities.

“As the economy improves and property values improve, you would normally see that there would be a lot fewer appeals,” Darcy said.

“When people’s property values are going up, and their tax assessments are coming in at the old values, they don’t typically want to go appeal their property assessment because the assessment is lower than what they see happening in the open market,” Darcy said. “So they think: Why should I bother getting assessed at a higher level.”

The number of appeals last year amounted to 42 percent of the peak total. The largest post-peak declines in appeals have been seen in Bergen, Burlington, Cape May, Gloucester, Hunterdon, Middlesex, Morris and Ocean counties.

Sen. Paul Sarlo, D-Bergen, said tax appeals are down in Bergen County – to 3,817 last year after exceeding 12,000 in both 2012 and 2013 – because of the strength of the New York City economy.

“The value of the homes in North Jersey, the economy, is just really taking off. We’re seeing that in towns in their revaluations. The values are increasing. And it’s because of working with Manhattan, the interconnectivity in Manhattan,” Sarlo said.

Sarlo said that’s a reason why New Jersey officials are putting such an emphasis on replacing the Port Authority Bus Terminal. The Port Authority of New York and New Jersey board this week approved $70 million for planning efforts toward a terminal that could cost $7.5 billion to $10 billion.

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“That could easily reverse itself,” Sarlo said of gains in property values. “If we don’t stay on top of this, and these commutes become difficult, time-consuming, unsafe, you’re going to see people start to sell homes very quickly in North Jersey.”

In Bergen County, the total assessed property value topped $154 billion last year – its highest since 2012, though still not returned to its pre-recession peak.

Not all counties have seen the same deep plunges in property tax appeals.

In Salem County, the number of appeals filed in 2016 was the highest since at least 1990, at 602. Appeals were down by a quarter in Sussex County, a third in Union County and half in Hudson and Warren counties.

In Atlantic County, where the casino-closure fueled uncertainty in Atlantic City has roiled the region’s economy, they’re down by around one-third from their peak. The 9,169 appeals last year amounted to almost 7 percent of all the properties in the county, twice the rate of any other county.

Monmouth County’s number of appeals last year, 5,017, amounted to 63 percent of the county’s recession-era peak. Monmouth is a unique situation in that it is operating a demonstration project that uses technology to adjust assessments annually.

Other than in Monmouth County, the deadline to appeal a property tax assessment is April 1.

Lynch, who is the tax assessor in Manchester Township in Ocean County, expects fewer appeals again this year, at least in his municipality.

“I think the number of appeals are going to further decline in 2017, based upon the phone calls that we’re receiving since the assessment notices have gone out on Feb. 1,” Lynch said. “The response over the last couple of weeks has been minimal.”

MICHIGAN - Detroit extends time to appeal property valuation

Because property assessment notices were sent out later than usual this year, the City of Detroit is extending until the end of the month the window for property owners to initiate an appeal of their property values.

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The city typically tries to get assessment notices out by the end of January to ensure the first step in challenging property values — a two-week window known as the assessor's review — can begin on Feb. 1. This year, the first batch of notices were mailed Feb. 8.

Detroit Deputy Chief Financial Officer and assessor Alvin Horhn said in an e-mail today that notices for all residential, commercial and industrial properties have been sent, with the exception of about 10,000 residences in designated Neighborhood Enterprise Zones.

The city also is waiving a requirement that property owners appeal during the assessor's review period to proceed to the next step in challenging property values, the March Board of Review. Horhn said the only legal requirement for mailing the notices is that they are sent out before the March Board of Review.

This year's assessment notices went out about two weeks late because officials wanted to make sure their numbers were accurate, Detroit Chief Financial Officer John Hill said in a statement.

"This is the first time in 60 years the city has issued this notice based on all of the available market data, and we wanted to make sure we got it right," Hill said.

Detroit just finished its comprehensive review of nearly 255,000 residential properties, the first such review the city had done in 60 years.

Mayor Mike Duggan said in late January that 53% of homeowners would see their property tax assessments reduced by up to 10% this tax year, and 41% would see assessments increase by up to 10%.

Detroit hired private contractors to take high-resolution aerial and street-level photographs of nearly every residential parcel in the city as part of the process. The various data used in calculating the assessments was more exhaustive than in years past.

ILLINOIS - A tax here, a tax there, a tax everywhere is no way to fix Illinois

Did you hear that Illinois lawmakers have discussed increasing the income tax? That they've talked about taxing retirement income? A tax on sugary drinks? Sales taxes on services? Sales taxes on food and medicine?

"They're trying anything to find a tax that's palatable," said Ted Dabrowski, vice president of policy and a spokesman for the Illinois Policy Institute, during a visit Wednesday with the Editorial Board. "To think tax hikes will solve the problem is wrong."

Unless you've been living in a cave, and sometimes we wish we were, you know that Illinois has been without a full-year budget for about two years. A stopgap, six-month budget passed in June expired in December.

There didn't seem to be any hope that a budget agreement could be reached until Senate President John Cullerton and Senate Republican leader Christine Radogno crafted a "grand bargain."

All of a sudden there was hope that the budget stalemate would end before the Chicago Cubs started defending their world championship.

"There's lots of activity and energy in Springfield," Dabrowski said. "However, there's too much excitement about having a budget and not enough on having a good budget."

Dabrowski and the Policy Institute think the Illinois budget can be balanced without tax increases, a prospect that should appeal to Illinois residents. So far, however, Illinois lawmakers have paid little attention to the institute's report.

"The grand bargain the Senate is debating is not a grand bargain for the people of Illinois or the people of Rockford," Dabrowski said.

The institute's budget solutions report says the budget can be balanced and the deficit eliminated without tax increases if the state enacts comprehensive property tax reform; ends the pension crisis through self-managed plans; aligns the cost of its

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contract with the American Federation of State, County and Municipal Employees with what taxpayers can afford; streamlines Medicaid spending; and enacts higher education reform that puts the priority on students over administrators.

None of the recommendations in the institute's report will be easy to implement. If they were, they would already be in place. Dabrowski acknowledged that it would be "painful" to adopt the recommended reforms but pointed out that there has been a bill proposed on every item in the institute's 52-page report. However, the proposals have not been viewed as a comprehensive package.

One of the more painful recommendations is to eliminate the Local Government Distributive Fund, local governments' share of state income tax proceeds, and freeing local governments from state mandates, giving them more power while negotiating union contracts.

Then-Gov. Pat Quinn proposed eliminating the fund in 2011, so it's not a new idea. However, the Illinois Municipal League, which represents almost every city and village in the state, has consistently fought efforts to reduce or eliminate the fund. In fact, there's a bill in Springfield that would increase local governments' share. That shows how daunting a task it will be for the Policy Institute's plan to move forward.

Property taxes often are cited as a reason residents leave for other states. Illinois has some of the highest property taxes in the nation, and Winnebago County has some of the highest property taxes in Illinois.

A lot of people are being squeezed out of their homes because of high property taxes, Dabrowski said, pointing to the large number of residents who are fleeing from Illinois and taking their income with them. That lowers the overall tax base and makes balancing budgets even more difficult. The report recommends a five-year property tax freeze.

"We can't be arrogant enough to think we can tax people and they will continue to stay here," he said.

Dabrowski said the institute's plan can be a starting point; Illinois needs to balance what is spent against what taxpayers can afford.

Illinois is worst in the nation in pension liability, credit rating and out-migration to name just three issues. "We're really good at making things as bad as possible," Dabrowski said.

Everything must be on the table if Illinois is going to reverse the sorry state it is in. The Illinois Policy Institute wants to change the conversation from one that focuses on taxes to one that focuses on reforms. Everyone is welcome to join the conversation.

Illinois has higher property taxes than every state with no income tax

Despite taxing both sales and income, Illinois has higher property taxes than every single state that does not charge an income tax. Illinois’ extraordinarily high property taxes are a symptom of a serious problem: too much spending that local governments cannot control. But some claim Illinois’ high property taxes (and sales taxes) are the result of the state having a lower-than-average income tax. But that’s not true. Illinois’ property taxes are higher than the property taxes in every state that has no income tax at all. Clearly, these states and many others are able to keep their property taxes low even without income tax revenues. Illinois property taxes are nearly triple those in neighboring Indiana, which also has a low, flat income tax rate. The breakdown Nine states do not have an income tax. They are geographically, politically and economically diverse. One thing they do share in common is that they all have lower effective property tax rates than Illinois, according to a 2016 study by wallethub.com.

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The median home value in Illinois is $175,700 according to the wallethub.com study. The annual property tax on the median home value is $3,959 per year at Illinois’ average effective property tax rate. The same home would have significantly lower property taxes in any of the states that have no income tax. A homeowner with the same home value would pay $570 less in property taxes in Texas, $2,000 less in property taxes in Florida and Washington, and $2,600 less in property taxes in Tennessee.

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Illinois is consistently in the top three highest property taxes in the country, usually behind only New Jersey, which has a very high income tax rate. Illinois has higher property taxes than all states that have competitive income tax rates. Indiana: A flat income tax neighbor with drastically lower property taxes One comparison that is closer to home for Illinois is Indiana, where the statewide income tax rate is 3.23 percent, with some localities also having income taxes. Illinois’ current income tax rate is 3.75 percent, with legislators talking about raising it as high as 5.25 percent. Despite having similar income tax rates, Illinois’ property taxes are nearly triple Indiana’s property taxes on a home with the same value.

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The difference in property taxes between Indiana and Illinois undoubtedly contributes to the flood of people moving across the border from Illinois to Indiana. In the most recent year of data, Illinois lost 20,000 people to Indiana, on net.

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Illinoisans need property tax relief – and they can’t afford income tax hikes The property tax is the largest of all taxes collected in Illinois, and is the most obvious symptom of Illinois’ governance and spending problems. Some of the spending is driven by the decisions of local political leaders. Much of it is also driven by state mandates for collective bargaining with government unions, minimum manning rules, prevailing wage laws, workers’ compensation requirements, and pensions and education mandates, to name a few. Illinois needs to solve the problem of skyrocketing property taxes, because it’s threatening home ownership and home equity values. Raising the income tax is not a solution, but allowing Illinoisans to consolidate local governments and relieving local governments of heavy state mandates is the only solution that will work.

FLORIDA - Want a property tax refund? Consider challenging appraisers’ assessments

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Most people aren’t aware that real estate brokers can help in obtaining thousands of dollars in property tax refunds for them. How can they do that? It’s really quite simple.

Experts estimate that between 30 to 60 percent of taxable property is overassessed. Yet, fewer than 5 percent challenge their assessment, even though the majority who do so win at least a partial victory with a properly prepared presentation.

Overassessments partly happen because property appraisers have a tremendous amount of properties to assess. They use mass appraisal techniques and cannot visit all the properties. They often inspect many by driving by, taking photos of the exterior and looking at Google maps, assuming they are all in reasonable condition for their age. They typically do not get inspected inside. This is a great thing for the homeowner.

Your broker, in contrast to the property appraiser, can point out all the work that needs to be done on the property such as painting and remodeling bathrooms and of course any work that needs to be done outside, like roof repairs. A licensed professional, such as a broker can “suggest” things that may make your house more attractive and saleable.

The condition of the house, and not the fact that you choose to make the repairs, is what is important. Things such as needing a more efficient air conditioner unit, installing impact resistant windows, updating a terrible looking kitchen, replacing worn carpeting and other things, can often go a long way in reducing your assessment. Describe it as if it had the darkest black cloud above it. The sky is the limit in explaining why your house should have an assessment reduction.

Remember, nobody says you must make the changes; but only point them out to the property appraiser. You are essentially explaining all the costs a hypothetical buyer would incur in fixing up your property. These “needed improvements” coming from a third-party professional, such as a real estate broker, can often go a long way and may result in a hefty tax refund.

The homeowner is not in the business of having to show the property appraiser the lowest repair estimates they have. After all, the County is not in the business of charging you low property taxes on the wholesale level.

A little-known fact is that Florida property is required to be assessed at 100 percent of just value. But, as per Florida Statute 193.011, the property appraiser in Miami Dade will allow an additional 15 percent deduction from those values as their estimated “cost of sale” in arriving at their assessed values. In effect, even if you just purchased, your taxable assessment should automatically be 15 percent lower. As this is not always the case, that is another reason to appeal your assessment.

When deciding if one should file an appeal, people also often don’t understand that it’s not important that their property today may be worth more than what it is presently assessed for. Now in 2017, we are actually appealing the 2016 assessments, and by law, the property appraiser should use the 2015 sales to arrive at their assessed values. At that time, real estate prices were generally lower.

Get your broker excited by inviting him or her to come to your property. They will be glad to do so. The broker can also give you a list of 2015 recent sales for similar properties. You can then proudly show off those “comparable” sales during your tax appeal. Typically a broker’s listing information and pictures of properties that sold will look more beautiful than yours, as compared to your property with all the “issues” which you will point out during the appeal. Most sellers do fix up their properties prior to sale.

In Florida, there is no such thing as being a loser when it comes to appealing taxes. At a cost of $15, with a 15-minute hearing and a proper presentation, you can be armed and prepared to lower your assessment, with a nice refund for you. If in the worst case, your assessment is not lowered (which sometimes happens), you can at least feel good to know that your property has not been overassessed.

ALASKA - Forgone revenue through property tax exemptions grows

At the annual Property Appraisal report to the Mat-Su Borough Assembly on Tuesday, assessor Brad Pickett pointed to revenue the borough didn’t pick up due to exemptions.

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Property tax exemptions granted by the borough includes those to churches, the elderly and disabled veterans. As the local population ages, those exemptions have grown, Pickett said, and amounted to around $3 billion in forgone property tax revenue over the last year.

Pickett said he started tracking exemptions a few years ago.

“That particular program we have, since conception, it’s grown very quickly,” Pickett said. He added, “We are exempting more than most boroughs. Only Kenai is exempting more than us.”

Pickett said that currently, single-family homes in areas where there is a lot of comparative data for market value are “bearing the brunt of the tax burden,” and that improved data and assessment work could distribute that more evenly.

But he also bemoaned a staffing level that’s lower than it is for other property appraisal departments throughout the state, in an area where a lot of square mileage to cover with no zoning makes it difficult to track properties in the first place.

“If we were going to have enough staff to properly do our job, we would have to double or triple our staff,” Pickett said. “This is a problem nation-wide. Property tax assessment is an area people don’t want to throw a lot of money at to do assessments accurately for some reason.”

Pickett said his department works at a rate of about 3,654 parcels per staff member per year.

“We’re up against a tough task here,” he said.

Overall, Pickett reported a flattening market for the Mat-Su, with the average increase in value for local properties hitting just 1.24 percent higher than last year’s values. Overall new construction was slightly lower in the Valley, with the exception of new multifamily housing units, which increased slightly.

Pickett said the borough tries to work with people on adjustments to the assessed values if they disagree with their appraisal. He said that the department is concerned with getting an accurate assessment, and that such matters are in the majority of cases resolved before going to appeals.

Pickett said improvements to technology, such as the use of aerial mapping, could help assessors work more accurately and efficiently in the long-run.

He said assessors started working with Geographic Information Systems (GIS) to improve data collection and entry two weeks ago. And, he’s currently working on rolling out a pilot project this year that would be a precursor to a future go-mobile program, which will enable assessors to access and enter data easily while out in the field.

“We don’t have permits, so we have to drive every road looking for changes,” Pickett said. “Technology is a huge savings for us.”

WISCONSIN - State seeks way to lighten impact of Dark Stores

State legislators are working to slow down, if not stop, big box retailers from slashing the valuations on their stores by as much as a half to two-thirds using a tactic called the “Dark Store theory.”

The bill, coordinated between the state Assembly and Senate, should be officially released and ready for co- sponsorships later this month, a senate staffer said.

Under the Dark Store theory, the retailers argue that the assessed value of a new, active store should be based on the value of vacant or abandoned buildings of similar size, in other words, a dark store, according to the Wisconsin League of Municipalities.

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Wisconsin courts have upheld this interpretation forcing communities to cut assessments of big box retailers and pay refunds to the retail corporations, according to the league.

In a Sept. 1 memo to members, the league said that this appears to be a coordinated movement among all of the big box retailers to significantly reduce their property tax burdens.

“It was brought to my attention by the city of Lake Geneva,” said State Rep. Tyler August, R-Lake Geneva. “I think the city may have a point.”

State legislators said proposed bills from the state Senate and Assembly will probably be released for review and sponsorship later this month.

In September 2016, the Lake Geneva City Council sent a resolution to the state Legislature calling on lawmakers to limit or eliminate the Dark Store theory and other tactics large-scale retailers use to cut their property tax assessments.

City Administrator Blaine Oborn said that the Dark Store theory was first used in Lake Geneva by Walgreens 10 to 15 years ago. Walgreens was identified by the Wisconsin League of Municipalities as being aggressive in using the tactic.

Through 2015, the city lost $5 million in property tax value as up to five other stores in Lake Geneva took advantage of the Dark Store theory to lower their assessments, Oborn said. In 2016, through a settlement with Best Buy, the city lost another $2.2 million in valuation.

Lake Geneva’s commercial property assessments dropped 1.7 percent between 2014 and 2015, Oborn said.

The loss in property taxes from the large retailers amounted to about $150,000 for the two years, 2014 and 2015, Oborn said. That tax burden had to be picked up by other property taxpayers, he said. According to the League of Wisconsin Municipalities, Wisconsin homeowners on average pay 70 percent of municipal property tax levies. In Lake Geneva, that figure is 71 percent, Oborn said.

He said the fear is that other retailers will pick up on the Dark Store theory and use it to further drive down the valuations of retail property, shifting more and more of the property tax burden onto residential property.

August said that State Rep. Robert Brooks, R-Saukville, and State Sen. Duey Stroebel, R-Saukville, are working on bills to mitigate the impact of the Dark Store tactic used by large retail.

Within his district, August said the Dark Store tactic is of particular interest to Delavan as well as Lake Geneva. It also gets residential taxpayers up in arms, he said.

“I’m not passing judgment on the cities or the retailers,” said August. “There’s the spirit of the law and the technical language of the law. It’s difficult to get those two married.”

He said the solution may be somewhere between the cities’ desire to retain assessed valuation and the retailers’ desire to cut their tax burden.

Steve Mikalsen, chief of staff for State Sen. Stephen Nass, said the senator also believes something has to be done. And like August, Mikalsen said the answer probably lies in the middle ground between municipalities and retailers.

Part of the hurdle lawmakers face is a clause in the state Constitution called the uniformity clause. It requires all taxes to be levied equally among all taxing classifications, Mikalsen said.

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According to a 2016 review of the uniformity clause by the Wisconsin Legislative Reference Bureau, the clause applies to property taxes and was intended to prevent legislators or local officials from granting favorable tax treatment to influential property owners.

The review points out that the uniformity clause is important for property taxpayers because property tax levies generate a specific amount of revenue from its taxpayers.

The total assessed value of all taxable property within the jurisdiction is divided to determine the tax rate. Taxpayer’s obligation is computed according to the valuation of that individual’s property. If one taxpayer’s assessment is lowered, the tax rate applied to every other piece of taxable property within the jurisdiction will be increased.

Using a Constitutional provision intended to prevent shifting property tax obligations from one class of land owners to another, the big box stores have succeeded in doing just that.

On the retailers’ side, the big boxes they construct are purpose-built, and probably not suited for other uses without significant changes, Mikalsen said.

Some Wisconsin communities have put limitations on the sizes of the big box buildings through their zoning ordinances, which limits profitability, and have kept the large retailers from the best locations.

Finally, once the kings of retail, the big box stores are now facing increasing pressures from online retailers, like Amazon.

On the other hand, the owners of the buildings, whether they be retailers or developers, are requiring assessors to value their operating, profit-making stores as if they were vacant. And that’s just wrong, said Mikalsen.

“Empty buildings are not comparable to buildings in use,” he said.

In a telephone interview, Rep. Roberts said the new legislation, which is being coordinated between his office and that of Sen. Stroebel, would encourage the highest and best use of a property in determining its valuation.

Buildings that are in use should not be the standard by which buildings with active, operating businesses should be assessed, he said.

Income brought in by a building should be considered in valuation of a business location, Roberts said.

Ethan Hollenberger, staff member for Sen. Stroebel, said another factor is that many of the big box stores are not owned by the retailers that they house. The buildings are built to the retailers’ specifications, but the developer retains ownership under an exclusive lease.

A Wisconsin judge has already ruled that the lease agreement can’t be used in determining the valuation of a big box property, Hollenberger said.

Sen. Stroebel’s proposed bill would allow assessors to review lease agreements in preparing a big box valuation, he said.

Assessors usually use comparable sales within a community to determine property valuations. That’s not easy with large retailers.

“You can’t compare a Walgreens to an Auto Zone,” Hollenberger said.

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Stroebel’s bill would allow assessors to go outside their immediate communities to find comparable buildings for assessment purposes, he said. In September 2016, the Lake Geneva City Council was among a number of municipalities that sent resolutions calling for the state Legislature to do something about the Dark Store theory.

“We don’t have a sales tax,” Oborn said during the September meeting. In Wisconsin, municipalities rely on property taxes for most of its funding.

If property values for commercial stores continue to decline, it will make commercial development less desirable for cities.

“They’ll be shooting themselves in the foot,” Oborn said.

Texas lawmakers present statistics that defend property tax cap bill

A group of lawmakers presented data that claims property taxes are growing nearly three times as fast as residents’ ability to pay at hearings about property tax bills.

The data presented defends a proposed sweeping bill that would cap how much local authorities can increase taxes and would allow residents to easily roll back taxes through a local election, The Dallas Morning News reported.

City and county officials fear the effects the bill could have if another recession brings down local property values, which could make it harder to support police and fire departments.

Republican state Sen. Paul Bettencourt said his bill gives residents the ability to decide how much they should pay for public services.

The chart, presented by Bettencourt, shows the growth of statewide property tax collections to median household income, which says city and county tax collections rose by 82 and 71 percent, while median household income rose at slower rate at about 29 percent.

Using local, state and federal data the newspaper has conducted analyses, and couldn’t find factual basis for Bettencourt’s claim.

“I consider that a relevant barometer of Texans’ ability to pay,” the senator said. “No matter how you measure it, property taxes have been growing.”

However, economic data indicates the difference between residents’ paychecks and their tax bills isn’t nearly as wide as the data presented by Bettencourt.

“Whether it’s intentional or not, looking at property tax collections as a share of median income is misleading at best,” said Matthew Gardner, a senior fellow at the Institute for Taxation and Economic Policy, a nonpartisan think tank in Washington.

RHODE ISLAND - Council moves toward single tax rate repeal

Measure approved on 4-1 vote after contentious discussion

After a public hearing and at times sharp debate, the Narragansett Town Council Monday voted 4-1 to take the first step toward repeal of the single-tier tax rate adopted late last year.

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Councilor Patrick Murray, who had voted to approve the single-tier rate on Oct. 17, was the sole dissenting vote on the first reading of the repeal measure, which seeks to restore the split residential and commercial rates that had previously been in place. That language allows the commercial rate to be up to 150 percent of the residential rate.

President Susan Cicilline Buonanno and President Pro Tem Matthew Mannix, who had voted against the October motion, voted for repeal, as did Councilors Michael Moretti and Jill Lawler. The motion now requires a second reading and another vote of the council.

Mannix, who sought the public hearing on the tax rate and introduced Monday’s motion, said the proposal is designed to restore flexibility.

“As people may remember, last summer and fall there was discussion about our split rate ... In October, there was a motion to basically make a single rate for the town,” he said. “And in that discussion, there wasn’t a lot of room for compromise ... My rationale behind that [vote in October] was that we could maybe provide modest commercial relief, but to do it all in one fell swoop was too big of a raise on the residents.”

Murray, who said his priority is to provide targeted tax relief for both businesses and year-round homeowners through a single-tier rate and homestead exemption, criticized the effort to repeal the single rate.

“We had a single tax rate for 115 years. In 2003, we did two things – we went to a two-tier tax rate, hid the cost of government and stopped paying the pension [costs],” he said. “Today in 2017, we owe over $150 million in unfunded [pension] liability. We can’t continue to browbeat businesses ... All we did is provide a level playing field. It is the current law.”

Moretti praised the previous council for drawing attention to the disparity between the commercial and residential rates, though he criticized the tying of the single tax rate to the homestead exemption.

“If you want to phase out the disparity of 150 percent, you have to untie this ordinance to do that,” he said. “You can argue the politics all day long, but I’ve studied this policy to the point where I know what the right policy is, and that is to give some businesses relief over time. I think that the shock to the town [from the move to the single rate] ... was irresponsible.”

The proceedings at times grew tense, including during discussion of a possible two- or three-tiered tax structure and a proposed homestead exemption for full-time residents. The latter was also approved on a first reading Monday.

Murray and Mannix got into a heated exchange before the vote, and Cicilline Buonanno called for a five-minute recess afterward.

Of the 12 speakers during the public hearing, many called on the council to keep the single rate.

Narragansett Chamber of Commerce Chairman Matthew Turco reiterated his organization’s support for the single rate, and called for a study of the single-tier and two-tier tax codes.

“We believe that a healthy town is made up of not just residents, but businesses alike. Favoring one taxpayer over another in our eyes does not represent a healthy community,” he said. “Commercial taxpayers certainly deserve equal consideration. Economic development is vital to the Chamber members and our town. Let’s work together on ways to increase revenue, reduce our expenses and keep this town thriving and moving forward.”

Ray Kagels, a resident and landlord, told the council that to go back to the previous rate would increase divisiveness. International Property Tax Institute IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles.

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“You have before you the opportunity to make a strong statement in favor of community healing in rejecting this proposal,” he said. He later added, “For 13 years, this town has placed an unnecessary burden on commercial properties, causing them to subsidize the taxes of residents ... If you favor inequality and resentment, or if you want the town to continue to be distracted by these issues while other important issues remain unresolved, revoking the single tax rate is a good way to start.”

Betsy Sullivan, resident and small business owner, also told the council she supports the single-tier tax rate.

“Surely we can all agree that it is unreasonable to tax businesses differently than residents when it is a property tax,” she said. “This is a clear-cut case of bias ... A tax policy that treats everyone the same seems rather reasonable. Small business owners aren’t requesting anything spectacular, other than to be treated fairly.”

Not all speakers were in favor of keeping the single rate. Resident Paul Zonfrillo told the council the single rate gives a large tax break to businesses like The Dunes Club and Stop & Shop, and he believes it was rushed through.

“The one rate eliminates flexibility from the council. If you wanted to, for example, have different tiers of tax rates, you could do that at budget time, but this locks it out,” he said. “What we should really do is give the council the way they want to tax, not lock them into this one rate ... What’s fair is what the town says is fair, not necessarily that the two rates are the same. It’s how we want the town to run, it’s what behavior we want to encourage.”

Republican Town Committee Chairwoman Meg Rogers blasted the motion to repeal and was sharply critical of Mannix.

“As everyone knows, you create your tax policy first, then you implement your policies through the budget process ... It bears repeating that money earned belongs to those who earned it, not to government. Lower taxes are not a handout. The toxic mindset of the government carving out special deals and giving out tax credits has not worked in this state,” she said, drawing applause from some present.

OREGON - Cities push reforms to increase property tax revenues

Proposal would remove property tax limits approved in the 1990s by voters, and base taxes on market values.

As legislators set to work on balancing the state's budget, some lawmakers and lobbyists are considering property tax reform to benefit local government budgets.

In particular, supporters want to change how property taxes are calculated, and remove limits on tax rates.

Two ballot measures approved by voters in the 1990s, Measure 5 and Measure 50, limited the amount of property taxes Oregonians pay, and annual tax increases.

Measure 5, passed in 1990, limited the total tax rates levied by all local taxing bodies to no more than $15 per $1,000 of assessed property value — up to $5 for education, and $10 for other local taxing bodies.

Measure 50, passed in 1997, decoupled a property's assessed valuation, the amount on which it is taxed, from real market value, according to the Oregon Department of Revenue, and put limits on how much a property's assessed value could increase from year to year.

The state's cities advocate a "transition" back to real market value-based calculations and for permitting local voters to approve rates exceeding the limits established by Measure 5.

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Without a reduction in tax rates, the proposal would lead to higher property taxes. According to the League of Oregon Cities, there is a state average of a 25 percent difference between the real market value of property and its assessed value.

The Legislature is also looking at a homestead exemption, which could cushion homeowners from sudden tax leaps on their primary residences.

Cities contend Measures 5 and 50 have meant that owners of similarly priced properties can pay significantly disparate amounts in taxes, and that cities have to compete with other local jurisdictions, such as counties and fire protection districts, for key funding.

Even if residents of a city support measures to pay for local libraries or to build a new police station, for example, the total tax rate per $1,000 of assessed valuation can't exceed the state limits.

The proposal could also lead to greater increases in assessments. Assessed valuations — due to the requirements of Measure 50 — typically grow at a slower rate than real market value. On the other hand, when the real estate market dips, so do real market values.

A senate resolution, Senate Joint Resolution 3, proposes repealing Measure 50 and replacing it with a real market value-based system. That resolution is scheduled for a public hearing before the Senate Finance and Revenue Committee Tuesday.

"We would support that in theory," said Wendy Johnson, an intergovernmental relations associate for the League of Oregon Cities, noting that the details have not been ironed out.

That resolution is the first placeholder bill in what cities expect to be a broader property tax reform package, Johnson said.

OMAHA - Douglas County assessor consider options on property taxes

Douglas County’s assessor, under fire for big jumps in property tax valuations, said she’s considering options to ease taxpayers’ distress but that suggestions so far from the county Board of Commissioners wouldn’t meet state requirements.

Assessor/Register of Deeds Diane Battiato and the board have been flooded with complaints since preliminary evaluations for 2017 were posted last month. The county’s total taxable valuation would increase by about 8.5 percent, Battiato has said, which is on top of last year’s state-mandated increase of 7 percent on residential properties in central and west Omaha.

Battiato told the board Tuesday that she’s determined to reduce many of the preliminary increases, the Omaha World-Herald reported. But the 3 percent cap the board proposed in a nonbinding resolution Jan. 31 wouldn’t work, she said.

Valuations under such a cap would compute to just 91.4 percent of market value - short of the state valuation requirements of 92 to 100 percent of market value - and likely trigger another state order to raise valuations, Battiato said. Also, such a cap would let some fast-appreciating homes fall too far below the required market value range, she said.

A suggestion to roll 2017 valuations back to the 2016 figures also would leave the county short of the state mandate, she said.

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“Rolling back to 2016 is not even an acceptable amount to send in (to the state),” Battiato said.

Her staff has been working on options that would lessen some of the jumps but still comply with state law.

One would rework 2017 valuations so the overall figure would be at 92 percent of market value. The other would redo valuations so the county overall would be at 93.5 percent of market value.

She can’t yet tell individual property owners what those options would do to their tax bills, Battiato said, but either still would result in significant valuation increases.

The final valuations are set in May, and taxpayers can file formal protests in June.

NEBRASKA - Assessor responds to governor’s property tax proposals

York County Assessor Ann Charlton says she has some concerns about a new proposal that would drastically change the way agricultural land is valued.

On Tuesday morning, she attended a forum led by Governor Pete Ricketts in York . . . asking the governor about his proposal. And she raised some questions that she feels will have to be addressed if this should take hold.

While she has long acknowledged her concerns about the rapidly increasing valuation increases for ag property – as they were happening, due to record high ag land sales – she says ag land valuations have flat-lined for the last few years on their own. That was created by land prices eventually hitting a plateau and then coming back down.

The governor said information provided to him showed that York County ag land values went up 2.5 percent in the last year, which Charlton disputed.

She also asked the governor who would be collecting all the information that would be used in the proposed formulation. The governor explained a number of factors would be considered, including 10-year crop yields based on land classifications, average commodity prices, expense ratios, three years of market sales, a review of data by the department of revenue and then the assessors’ input.

“Would it be fair and equitable?” Charlton asked.

“Absolutely,” Governor Ricketts responded.

“So you would let the Department of Revenue tell York County how the valuations should be?” Charlton asked.

“The assessor would determine that, based on the range given to you,” the governor answered.

Charlton asked if residential and commercial property owners should also be given a consideration when it comes to valuations. Ricketts said he wasn’t opposed to doing other things, but this particular proposal is ag-based and came from the many, many concerns brought to him about ag land valuations and high property taxes.

“I think this is absolutely doable,” the governor said. “And this is in an effort to be more competitive. Other ideas . . . I am absolutely open to . . . except for raising taxes. That I will not do.”

“Have you looked into legislation regarding tax exemptions for entities, such as for schools, churches, entities considered to be charitable?” Charlton asked. “These entities can be allowed to be exempt from taxes. Does the state realize how much they are losing through these exemptions?”

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The governor said he didn’t know what those figures would be, because they had not been calculated by the state.

“But again, we are not going to be raising taxes on people,” the governor reiterated.

“No, but it would be fair and equitable?” Charlton said.

Later, Charlton expressed her concerns about how the valuations would be done, should legislation make it happen.

“Years ago, when I first got to the assessor’s office, the state used to tell us ranges and we had to make our own guidelines,” she said. “If that would be the case again, it could create a bit of a gray area.

“I’m also kind of concerned about the use of generalization – how would that be fair to ag land owners in the prospective of east versus west, ranch land versus irrigated crop land?” Charlton continued. “Now we use ‘middle numbers.’ The use of averages makes me concerned because it doesn’t take care of the highs and lows.”

She said she also worries about the land groupings (across the state) suggested by the governor “because York County has 35-40 different types of soil and some counties have more.”

And she worries about whether this would be an unfunded mandate on counties – would the counties have to hire more staff in their assessor’s offices, purchase more software, etc.?

“He didn’t say who will pay the expenses of changing everything,” Charlton said.

“I find it all interesting, but it also has to be realized that a lot of things go into determining the value,” Charlton said. “And I continue to look for something to be said about property tax relief for commercial and residential owners as well.”

Texas Bill Would Exempt Elderly from Property Taxes

Elderly Texans have been taxed out of their homes but if one Lone Star State legislator has his way, anyone over 80-years of age would be exempt from property taxes.

Texas State Representative Dwayne Bohac (R-Houston) filed House Bill 1473 last week. If passed, the legislation amends the Texas Tax Code to exempt anyone 80-years-old or older from having to pay any property taxes if they have owned their home for ten years or more.

“Owning your own home is the American dream,” said Bohac. “But sadly in Texas that dream is impossible to truly achieve because under our current property tax system, homeowners are forced to endlessly pay rising property taxes years after they’ve paid off their own home.”

The exemption would also extend automatically to a spouse after their partner dies.

For potential opponents to the bill, Bohac says that his bill ensures that public school funding is preserved. He vows that “School taxing jurisdictions will remain 100% whole by an appropriation of state revenue to fund this commitment to our senior citizens.”

“It’s time we stand up for our most seasoned taxpayers who have done their part to fund our public schools, counties and cities over the course of a lifetime,” added Bohac. “They deserve the peace of mind of knowing their home is truly their home. Their taxpayer duties are done. They’ve earned it.”

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Rep. Bohac was first elected to serve in the Texas House in November 2002. He represents the west Houston communities of Spring Branch, Bear Creek, Katy and Cy-Fair.

Texans over 65-years-old have an automatic exemption if they fill out form 50-114. However, the exemption only works to cut the assessed value on the home, for example if your home is worth $120,000, seniors are still taxed on a $110,000 valuation for a $10,000 school property tax exemption.

NEBRASKA - Governor brings property tax proposal to York

Governor Pete Ricketts has been touring the state, talking about his property tax proposal that would bring about a major change in the way agricultural land is valued. On Tuesday morning, he brought that conversation to York.

The plan would switch the state from a system that relies on land sale prices to value property to one that focuses on how much income it could potentially produce. It’s designed to more closely align land values with commodity prices, which have fallen in recent years.

Governor Ricketts says that as “agricultural markets continue to change and as cattle and crop prices decline, it is important our valuation assessment process reflects the true market.”

A main focus of his administration, the governor has said, is tax relief, including property taxes.

If this new formula would be adopted, it would mirror what already exists in South Dakota, North Dakota, Kansas, Iowa, Illinois, Indiana, Ohio and Wisconsin, Ricketts pointed out.

“The downturn in farm income has created a ripple through our economy and it certainly shows in our state revenues,” the governor said.

He reiterated his commitment to property tax relief. “We have a lot of challenges, but we do not have to raise taxes. And we need to provide property tax relief for owners of farm land, as this is what the majority of people have been talking to me about the most, for years now.

“The state does not collect property taxes,” he reminded those in attendance, as local government taxing entities collect those particular taxes. “We, at the state level, want to change the valuation process to reflect income potential, which would tie more closely to what could be produced (on a parcel of land). This would be a more fair system and more standard with what is across other Midwest states. This will help our agricultural producers be more competitive with those in other states. And this could help avoid big run-ups in valuation. This would be a major structural change and because of that, we want it to be implemented in January of 2019.”

The governor said the 2019 activation date would allow for the education of all the assessors in the state, as well as for producers and other entities that would participate in the process.

“If this would have been in place in 2017, the ag land values in York County would have been flat,” Ricketts said.

But York County Assessor Ann Charlton, who was in the audience, told Ricketts that ag land valuations in York County have been flat for the past four years (following many years of high increases).

Ricketts said figures provided to his office indicated a 2.5 percent increase in valuation here, which Charlton disputed.

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The governor further explained the basics of how the new valuation process would work: 10-year crop yields would be considered, based on land classifications. Then the average commodity prices would come into play, as would expense ratios against that farm. Also part of the equation would be a look at the last three years of market sales (as is done now). Then the department of revenue would look at the data and give a range of income to assessors that they would use to determine valuations.

Ricketts says the process would “moderate valuation increases,” and if there were losses in ag revenue the valuations would start to come down. He also said he felt the new process would be fair and equitable. One farmer in the group said he felt the valuations of ag land “should come down as fast as they went up,” but the governor reminded the crowd that this will be a gradual change.

And he added, “If other states are using this formula, there must be a reason they are using it.”

“We are focusing on how to run government better,” Governor Ricketts said, “with the plan being to continue to grow Nebraska.

PENNSYLVANIA - A Flawed Property Tax Swap in Pennsylvania

School property taxes in Pennsylvania totaled $12.3 billion in 2014-2015, or 69 percent of all property taxes collected in the state. Legislators are set to reintroduce a tax swap, known as the Property Tax Independence Act, which would eliminate local school property taxes and would increase its general education aid to localities to offset the loss of property tax revenue. The state would replace the lost revenue with higher individual income taxes and higher sales tax at the state level. My colleague, Jared Walczak, has been critical of this proposal previously, including when it was attempted in 2015. While this seems like a win for taxpayers, there are a number of fundamental flaws with this proposal.

First, contrary to how it is described, this wouldn’t eliminate property taxes in Pennsylvania. School districts are just one of several property tax taxing authorities in Pennsylvania. Counties and municipalities also assess property tax, comprising 31 percent of property tax collections. Even under this proposal, local education property taxes won’t disappear. School districts would still collect property taxes to pay for their outstanding debt obligations. According to data from the Independent Fiscal Office in Pennsylvania, debt service represents approximately 17 percent of school property tax collections. Debt service will actually grow to 18 percent of local school property tax collections by 2021-22. This would just shift some of the local school district tax collections to the state; it’s not an elimination.

Second, the bill would raise other taxes to fill the gap. The state would raise the individual income tax and sales tax. The previous version of the bill raised the individual income tax from 3.07 to 4.95 percent and the sales tax from 6 to 7 percent. (Rates might be different in the forthcoming legislation.)

Raising the individual income tax is particularly alarming. The individual income tax rate of 3.07 percent in Pennsylvania is quite low. It’s the second lowest of any state that taxes individual income, but that ignores local income taxes in Pennsylvania, with rates as high as 3.91 percent. The chart below shows the combined state and local income tax rates in selected Pennsylvania cities and townships.

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Source: Combined State and Local Income Tax Rates, Pennsylvania Illustrated: A Visual Guide to Taxes & the Economy

But even more than the rates in Pennsylvania, the individual income tax suffers under immense complexity. The state has more than 3,000 local income tax jurisdictions. Ohio has the second most, with approximately 600. Pennsylvania has made some progress in recent years to simplify tax collections, but there is still a long way to go. This proposal does nothing to fix the individual income tax structure in Pennsylvania; instead, it doubles down on it with higher state-level rates.

Similarly, this plan would do nothing to fix the issues within Pennsylvania’s sales tax base, such as the lack of tax on personal services or the taxation of business inputs.

Finally, other states have tried similar property tax swaps, but the results have not been lower property taxes. In Minnesota, for instance, localities simply raised their education levies due to the “spare capacity” now available in property taxation. Mark Haveman, executive director of the Center for Fiscal Excellence in Minnesota, described this phenomenon well:

The moral of the tale is this: state aids are very important to local governments and community health, but they are not and never will be a magic bullet for restraining levies. It may put a temporary dent in a longstanding trend but local governments still spend that money. The result: higher levels of spending and higher government cost

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structures for which the property tax will always remain the “go to” source of support in the future. And once government programs and cost structures are in place, they can be extremely difficult to unwind.

I understand that residents in Pennsylvania (and in other states) don’t like paying property taxes, but this sort of tax swap is not a good idea.

NEVADA - Former Nevada lawmakers on different side of property tax vote as local officials

Several Southern Nevada elected officials were state legislators when they voted for a property tax cap measure that local governments around the state are lobbying to reform.

The turn of events isn’t because local officials want to see the caps that date back to 2005 lifted, however. Many say the law’s unintended consequences have created a disconnect between economic growth and property tax revenue.

Officials widely agree that the caps served their purpose in tempering property tax bills in a time of excessive growth, before the recession. It’s the other provisions that were passed as part of the tax cap law that a number of local government officials want to see changed.

“It’s done some damage,” said Las Vegas City Councilman Bob Coffin, who was a state senator in 2005. “It’s caused our revenues, as low as they are from property taxes, to be below where they need to be.”

In 2005, the Nevada Legislature capped property tax increases at 3 percent for owner-occupied residential properties and at 8 percent for other residential and commercial properties.

Population continues to rise in the valley, oftentimes growing the demand for government services, but property taxes haven’t grown at the same rate. The property tax pinch is apparent in the city of Las Vegas public safety spending, the biggest portion of the city’s annual budget.

During the city’s budget talks last year, Coffin voiced concerns about rising crime and said while the public safety share of the city’s annual spending has ballooned, without an increase in property tax revenue, other city services suffer.

Brian McAnallen, the city’s government affairs manager, said the city is advocating a longer-term study of the property tax structure and possible future reform “rather than waiting until the next crisis and then trying to dig ourselves out of it.”

The property tax cap law, aimed at keeping property taxes in check, was written when property values were growing faster than the rate of inflation. The calculation for the current fiscal year for local governments like Las Vegas and Clark County resulted in an increase capped at 0.2 percent.

The Nevada Association of Counties has requested a bill to modify the formulas used to calculate property tax increases and set a 3 percent floor for annual commercial property tax increases, but leave intact the 3 and 8 percent caps.

That bill appears destined for a fight — the state Senate’s top Republican Michael Roberson told the Review- Journal last month Assembly Bill 43 “has no hope” of becoming a law.

Local government officials vary in their views on reform. Las Vegas City Councilman Stavros Anthony said he doesn’t have a problem “looking” at the property tax cap formula.

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“What I do not want is for people’s property taxes to go up,” Anthony said, noting that some residents continue to struggle financially.

North Las Vegas Mayor John Lee, also a state senator in 2005, said he will take a wait-and-see approach on the issue.

“It’s probably going to be discussed during the next legislative session, but I’m just going to watch,” Lee said. “In the meantime, I’m going to grow the city, I’m going to use economic development and we’re bringing new businesses and opportunities. I’m not going to lament the fact that there’s an opportunity to raise taxes. I’m going to build the city without that.”

Property tax reform was a big topic at the Southern Nevada Forum, which in January brought together state and local elected officials, taxpayer groups and business leaders in Las Vegas to hash out regional priorities prior to the 2017 session.

Henderson Mayor Andy Hafen said he supports an adjustment of the secondary cap.

“Property taxes are one of the most stable forms of taxes and sources of revenue,” Hafen said. “We, as elected officials throughout the state, just want to see some of the financial stability come back into play.”

Nebraska Gov. Ricketts touts 'major' property tax bill

Nebraska Gov. Pete Ricketts is touting his property tax proposal as a major change to the way agricultural land is valued even though the state's largest farm groups say it doesn't do enough to help them.

Ricketts surrounded himself Monday with farmers and ranchers to draw attention to his measure before a hearing on Wednesday.

The bill would switch the state from a system that relies on land sale prices to value property to one that focuses on how much income it could potentially produce. It's designed to more closely align land values with commodity prices, which have fallen in recent years.

Groups such as the Nebraska Farm Bureau and the Nebraska Farmers Union say the proposal could help but doesn't deliver the reforms sought by rural and urban residents.

WASHINGTON - Change in property tax formula seen as revenue stream for state, schools

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A bipartisan alliance of lawmakers wants to rewrite one of the state’s vaunted political commandments in order to restore a stream of dollars to schools and local governments.

The target is the 1 percent cap on property tax hikes, which voters embraced and legislators etched into law a decade ago in spite of concerns it would weaken a historic pillar of financing that cities, counties and the state rely upon.

Seven Democrats and four Republicans are sponsoring a bill allowing property taxes to increase with the rate of population growth plus inflation, up to a maximum 5 percent each year. A hearing on the legislation, House Bill 1764, is planned next week in the House Finance Committee.

The sponsors didn’t all get on board for the same reason. But they are all pushing in the same direction which may be enough to keep this idea alive throughout the session.

For the lead author, Rep. Kristine Lytton, D-Anacortes, it’s about schools. As chairwoman of the finance committee, she’s entrusted by her caucus to come up with ways to raise the billions of additional dollars Democrats say are needed to fully fund education as demanded by the Supreme Court in its McCleary decision.

Meanwhile, for the lead Republican, Rep. John Koster of Arlington, it’s about assisting local governments, especially counties. He said his 12-year tenure on the Snohomish County Council made him acutely aware of how the existing limits crimp counties’ abilities to keep pace with the rising costs of public safety and human services.

“The world’s changed,” said Koster, a staunch fiscal conservative. This might be the first tax-hike measure he’s ever put his name on. “We give (counties) more and more to do and not a way to pay for it.”

The 1 percent cap has been in place since 2002 when voters passed Initiative 747, a tax-limiting measure written by Tim Eyman. Prior to that, the potential existed for tax hikes of up to 6 percent a year.

Opponents of the initiative challenged its legality and won when a court invalidated the measure in 2007. In response to a public fearful of huge increases, then Gov. Christine Gregoire called lawmakers back for a one-day special session in November 2007 to write the initiative into law. They did so by votes of 86-8 in the House and 39-9 in the Senate.

This year’s legislation would repeal those provisions and replace them with a different formula.

The change could generate up to $128.3 million for the next two-year state budget and $372.6 million in the 2019-21 biennium, according to a draft fiscal analysis done in mid-January. If local governments imposed a maximum 5 percent increase, they could collectively generate $227.8 million, according to the analysis.

A final financial assessment is expected to be released before next week’s hearing.

Koster said he doesn’t view this legislation as an answer to the education funding issue. But if House and Senate leaders are going to consider changing any rules regarding property taxes, he wants to make sure his alums in county government aren’t left out of the conversation.

“At this point I don’t see it as a solution for McCleary,” he said Tuesday. “I see it as an option for counties. My objective is to get the counties a seat at the table when negotiations get going on a final fix.”

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WASHINGTON - 'Extraordinary revenue' and record tax collections for D.C. in '16

The District raked in a record amount of tax revenue in fiscal 2016, topping $7 billion for the first time, according to the 2016 Comprehensive Annual Financial Report released Wednesday.

The District originally projected $6.75 billion in general fund collections for the fiscal year that ended Sept. 30, but it generated $331 million more than anticipated, bringing the general fund total to $7.05 billion.

CityCenterDC was the most valuable commercial property in the District in fiscal 2016, according to the report. High property, income and corporate taxes led to record tax collections for the District.

"Record levels of profits” sent business income tax receipts soaring by $131 million, according to written testimony submitted to the D.C. Council on Thursday by Chief Financial Officer Jeffrey DeWitt. The District also saw a $47 million boost in sales tax receipts from e-commerce companies now included in the tax base. And a record stock market meant $51 million in capital gains tax collections.

"I am very pleased to report that the District’s financial position is the strongest in the city’s history,” DeWitt said in his testimony. He attributed the positive results to continued financial discipline and sound financial management practices.

The higher tax receipts are reflected in booming residential and commercial real estate values too. The estimated value of all taxable commercial property in the District rose to $86.6 billion in fiscal 2016, up from $82.2 billion in fiscal 2015. Residential real estate saw an ever bigger jump, growing to $102 billion from $94 billion — the first time it has crossed the nine-figure threshold.

CityCenterDC ranked as the most valuable taxable property in the District, with an assessed value of $746.5 million, topping The JBG Cos.' 1200 New Jersey Ave. SE, home to the U.S. Department of Transportation, at $658 million.

Property tax collections hit $2.5 billion, up from $2.3 billion in fiscal 2015. Income and business taxes grew to $2.4 billion, up from $2.3 billion in fiscal 2015.

Total revenue — including federal contributions and grants — grew to $12 billion in fiscal 2016, up from $11.6 billion in fiscal 2015. That also is the highest ever recorded.

Other notes from the financial report:

The total value of tax exempt properties in the District, including universities, government buildings and others, reached $91.4 billion. The assessed value of all property in D.C. was $280.5 billion in fiscal 2016. So D.C. is unable to tax 32.6 percent of its assessed properties.

The most valuable tax exempt, non-government owned building in D.C. is the International Finance Corp. at $641.4 million. It is followed by the Inter-American Development Bank at $607.5 million, and the International Bank for Reconstruction & Development at $549 million.

Fines and forfeitures generated $202 million in fiscal 2016. Almost all of that comes from traffic fines and photo radar tickets. Read more about that here.

Fewer people are smoking, or buying cigarettes in D.C.. Tax collections for cigarettes were originally projected to be $33.1 million in fiscal 2016, but that was revised down to $30.6 million, before coming in at $30.5 million.

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Georgetown University is the District's top private employer, followed by George Washington University, Children's National Medical Center, American University, Georgetown University Hospital, Booz Allen Hamilton, Howard University, Fannie Mae, Catholic University and Red Coats.

The District's total debt stands at $9.57 billion, but as a percentage of personal income (now a record $51.88 billion), it is down to 18.4 percent.

PENNSYLVANIA - Local man studies reassessments, suggests an audit

Robert Zanakis has experienced a sharp rise in the assessed value of his home, which is reflected in his Washington County tax bill. He said because of the uncertainties associated with the recent reassessment and its effect on tax bills, he had no idea how much to begin setting aside last year.

When property owners received their Washington County tax bills during the fourth week of January, they may have reacted by hitting the roof or breathing a sigh of relief.

But Zanakis, 62, had a unique response when he saw the 83.8 percent increase. He dug out a 10-page paper he had written as a senior at Washington & Jefferson College in 1976 on what was then Washington County’s most recent reassessment – conducted in 1960 – as related to his home community of Canonsburg, ferreting out several examples of inequalities decades ago.

“The county should have a general reassessment every three years to keep an adequate check on the different classes of people not only to insure quality within the classes, but also a relative equality among the classes,” he wrote as a student.

Property reassessment is not a topic that would interest most collegians, but Zanakis explained that during his student days, he anticipated receiving a share of his family home for “$1 and love and affection.” This is the opposite of what real estate professionals refer to as an “arm’s-length transaction” determined by an unrelated buyer and seller.

Zanakis has been a property co-owner since 1978, so he went through a countywide reassessment in 1981. He was diagnosed in 2002 with chronic myeloid leukemia and had a bone marrow transplant, and his condition has left him with a disabling limp.

But he’s contemplating the possibility of remortgaging a share of the family home to pay tax bills, seeking help from relatives or borrowing against a life insurance policy. The county’s tax bill may have been the first to arrive, but he’ll soon be getting another from Canonsburg Borough and a third, during the summer, from Canon-McMillan School District.

Although this former economics major has paid close attention to the last three Washington County property reassessments, he never filed an appeal for either the 1981 or 2016 assessments, the most recent of which valued his home at $116,000.

He said wrapping up the affairs of his late mother took priority during the most recent assessment.

“It costs money,” he said of the appeals process. “I wouldn’t go into any legal proceeding without an attorney.”

Zanakis also owns an adjacent lot, the assessment for which decreased 13.7 percent.

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He checked the online real estate database Zillow, using technology that was unavailable to those seeking information during Washington County’s previous reassessments, and he said he’s found differences in Zillow’s numbers and Tyler’s Technologies, which did the recent assessment. Zanakis latched onto an idea that is broader than just his own property: requiring a performance audit of reassessments to determine if Washington County actually got its money’s worth through the $6.96 million contract with Tyler Technologies.

He called the office of state Auditor General Eugene DePasquale about the possibility of auditing Tyler’s work. The auditor general’s office referred him to the office of County Controller Michael Namie, who has no record of Zanakis calling. The controller said it would be inappropriate to discuss the matter without first speaking to Zanakis.

Recorder of Deeds Debbie Bardella, who also oversees the Washington County Tax Revenue Department, said, “The controller would not audit (property) values,” but both were open to talking with Zanakis, who opined he’d prefer to see Pennsylvania collect revenue based on people’s ability to pay rather than on property tax.

Tyler Technologies considers the software it used to determine property assessments to be proprietary, so its formula was not included in the copy of the county’s contract with Tyler obtained through the Observer-Reporter’s request under the state Right-To-Know Law. County Chief Assessor Bradley Boni said, however, that included in Tyler’s analyses are sales data from comparable properties in and around a community.

Zanakis discussed his views with Boni, who said Thursday, “This is not a philosophical office. We don’t have that latitude. We’re doing things in accordance with the law. If it deals with philosophical or legislative questions, I can’t answer them.”

Home prices have gone up in the 39 years since a deed changed hands at the Zanakis home, so assessors “look at similar real estate that has sold and use their assessments as a barometer or comparison to his,” Boni said.

County Commission Chairman Larry Maggi said he and fellow board members, until running out of legal options to avoid a property reassessment demanded by the McGuffey and Washington school districts, were hoping for relief from the state Legislature that never arrived.

Meanwhile, in Blair County, a group of 100 plaintiffs calling itself Blair County Citizens for Accurate Reassessment has retained an attorney, Robert Donaldson, to litigate its complaint against the county. The group went to court in Hollidaysburg to seek an injunction to vacate the certification of the assessment by Evaluator Services and Technology Inc. of Greensburg, Westmoreland County. EST submitted a proposal to perform Washington County’s most recent reassessment, but the Washington County commissioners chose Tyler Technologies.

In a separate complaint, the Altoona-area group asked the court to void parts of state reassessment law, claiming they are unconstitutionally vague.

Court notifying litigants of appeals

The Washington County prothonotary’s office logged 1,089 property appeals as of the close of 2016, and additional appeals have been filed since the first of the year. “Every case has been assigned,” said Patrick Grimm, Washington County court administrator.

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Conciliation is an initial step taking place with one of the seven appointed “masters” who will attempt to negotiate a settlement between property owners and the taxing entity or entities. A judge would then issue an order. Only hearings before a judge will be open to the general public.

The first day for litigants to appear will be Thursday, Feb. 23. Grimm said all parties will be asked to report to the information desk in the Family Court Center for assignment to a hearing room or courtroom.

The county did not differentiate among commercial, business and industrial property assessment appeals, combining them for a total of 521 cases. The remainder – 568 – are residential property appeals.

“It was almost 50-50, really,” Grimm said.

Counties and municipalities operate on a calendar year, sending their tax bills before those generated by school districts, whose first tax bills since the reassessment will sent out this summer.

School districts have higher property tax bills than either the county or a municipality, so the arrival of school district tax bills are expected to produce another round of property assessment appeals. With this calendar in mind, the court hopes to dispose of the majority of cases within six months.

“We want to get as many out of the way as we can before July 1, 2017, to reduce the level of uncertainty for everyone involved,” Grimm said. “We think there may be some rebound once the school tax bills go out. We would like to give the property owner certainty in an expedited fashion and provide budgetary certainty to the taxing body, as well.”

Trinity Area School District had the largest number of appeals, followed by Canon-McMillan, Peters Township and, because of coal assessments, McGuffey. Grimm said after that come the Washington and Ringgold school districts. Washington County has 15 school districts, including Fayette County’s Brownsville Area, which includes West Brownsville Borough. Grimm said he didn’t think any of the appeals filed so far came from West Brownsville.

NEW YORK - What is STAR Tax Program and Who Qualifies?

This STAR is worth grabbing. Just look at what the initials stand for: School Tax Relief Program, which is a New York state program for homeowners. However, unlike the co-op and condo abatement program, or the 421(a) tax abatement — both of which you may have heard more about — STAR is unique in that you, the homeowner, have to file for it. If you want some extra money in your pocket, read on.

Must Be Primary Home and Make Under $500K

In New York, as in many other states, public schools are funded through the use of property taxes, which are paid to local government. If you own a house, condo or co-op in the five boroughs of New York City, for example, you’ll pay property taxes to the New York City Department of Finance. However, to make those taxes somewhat more progressive — in sync with the idea that rich people can more easily afford taxes than poorer people — New York state provides a credit on the first $30,000 of value of your home.

The word “home” is important here. You can only receive a STAR benefit on your primary residence. For example, if you own a home in New York and one in Florida, but you are a resident of Florida (you vote down there, and file your taxes down there, for example) you aren’t eligible for STAR.

In addition to the primary residence rule, there’s an income restriction. You can only receive STAR if your household income is under $500,000 a year. If you meet that criterion and you purchased your home before May 1, 2014, you probably are already seeing STAR as an exemption on your property tax bill. International Property Tax Institute IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles.

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However, if you bought your home after May 1, 2014, or if you plan to buy a home in the future, you need to register for the benefit. In addition to changing the benefit from the automatic enrollment that it formerly used to the current “opt-in” method, the state has changed the program from an exemption (which lowers your tax bill, but isn’t money in your hand) to a credit (which means that the state will now send you an actual check). Pretty good, right?

How to Apply

There are different income and qualifying levels for STAR exemptions: Basic STAR and Enhanced STAR.

Basic STAR: To apply for Basic STAR, which at this point is worth about $300 a year, go to this Department of Finance link.

Also, very important: Your application must be postmarked by March 15, 2017 and if you are eligible, the benefit will begin July 1, 2017. You will be required to submit your property address, your Social Security number and you’ll also want to have the date of purchase and the names of the sellers handy.

Note that properties where you’re already getting a 421(a) exemption — which include a number of new development condos in the five boroughs — are not eligible for STAR benefits.

Also, there is a possible gray zone: If you bought in the period from May 1, 2014, to August 1, 2015, you might have gotten the prior owner’s credit for the year 2015, and not realized that you needed to apply under your own name. If that’s the case, follow this Dept. of Finance link and click on the STAR box to get to an application that you can file.

Enhanced STAR: Finally, there’s something known as “Enhanced STAR,” which is available to senior citizens (those over 65) who earn less than $86,000. This credit is worth approximately $600 a year.

To get Enhanced STAR, you either apply once a year, or participate in a program where your New York state tax returns are automatically used to verify that you are under the income cap. If you have a life estate in a property that you have transferred to your children, your income, not theirs, is used to determine whether you are eligible for STAR benefits.

NEW YERSEY - Gov. Christie has a last shot at making property-tax-reform history, says Carl Golden

When Gov. Chris Christie appears before a joint session of the Legislature in three weeks to deliver the final budget of his administration, he has an opportunity to leave a lasting imprint on the state’s economic, political and social life by proposing a comprehensive overhaul of the state’s tax structure that provides meaningful relief from the property tax burden.

With no re-election campaign on the horizon, Christie is free from the political pressures that often drive public policy decisions.

Thus unconstrained, Christie is in a position to aggressively confront the issue that has bedeviled governors and Legislatures for more than a half century — control, stabilize and eventually reduce the property tax burden.

With his historically low public approval ratings, Christie has minimum political capital at his disposal, but his considerable communications skills and the executive powers of the office provide leverage in dealing with the Legislature.

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He has a wide array of options from which to choose, from the relatively modest to the radical.

He could, for instance:

— Call for a constitutional convention whose delegates would be charged with responsibility for drafting a restructuring of the state’s tax code and submitting it to the Legislature within a year.

— Recommend greatly increased levels of municipal and school district aid and require that any additional state assistance be applied directly to property taxes.

— Mandate shared services or municipal consolidation and require that any savings realized be directed to property tax reduction.

— Propose dramatic changes in the school aid formula to eliminate overfunding of some districts while underfunding others.

— Renew his proposal that per pupil aid be identical, $6,599, in every district.

— Call for an amendment to the Constitution to allow large business and commercial properties to be taxed at a higher rate than residential properties. Article VIII, Section I requires a uniform rate of taxation; for example, a $50 million business property and a $100,000 home are subject to the same rate.

— Propose that municipalities be granted other taxing options, such as a local income tax or sales tax, in return for substantial and permanent reductions in the property tax. Other states allow income to be taxed locally on the theory that income is a more equitable measure of personal economic circumstance than an arbitrarily established value of residential property.

The property tax burden has been consistently identified as the state’s most serious problem and has been cited as the major reason for people moving to other states.

Some 1,200 entities — school districts, municipalities and counties — rely on property tax revenue for everything from crayons for kindergartens to bulletproof vests for police officers.

As local government costs increase, the over-reliance on property taxes becomes more acute. The days of the $30,000 a year cop and the $28,000 a year school teacher are long gone, never to return.

The stricter 2 percent cap on property tax increases enacted several years ago has been helpful, but has only slowed the rate of increase rather than halt it or reduce the out of pocket cost to homeowners.

At $8,549, New Jersey’s average property taxes continue as the highest in the nation and there is no indication the state will lose that dubious status anytime soon.

Each year following the governor’s State of the State address and budget message, the opposition party in the Legislature is quick to point out that the governor failed to mention the property tax issue or glossed over it.

Aside from partisan grousing and demands that the issue be given higher priority, nothing of substance was offered. It’s been a talking point in successive gubernatorial and legislative election campaigns, but specifics have been lacking.

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Some legislators have conceded privately there is a lack of political will in the Legislature to take on the issue in any comprehensive way. There is a willingness to accept an admittedly unfair and burdensome system rather than risk political retribution for changing it.

Christie could alter the landscape dramatically by issuing a forceful challenge to the Legislature on the order of President Kennedy’s 1961 inaugural speech goal to “put a man on the moon and bring him back safely within the next decade.”

The history of the property tax issue in New Jersey is such that the level of difficulty in solving it is comparable to a moon shot.

Christie could push the launch button and a majority of New Jerseyans would be eager, indeed, to witness liftoff.

NEBRASKA - Special interests blunt push for property tax relief

Not even a month into the current legislative session in Lincoln and already policymakers have lost focus on what Nebraskans are asking them to do.

Across the state, the number one issue that people are clamoring for is a solution to the astronomical property taxes burdening Nebraska property owners. And they probably just went up again; some reports of recent valuation changes have been as high as 800 percent.

While our already high property taxes continue to escalate, policymakers and some special interest lobbyists want you to believe that what you are really concerned about is income tax relief. According to a poll conducted by Reform for Nebraska’s Future, only 14 percent of Nebraskans agree with this.

The same poll showed that 77 percent of Nebraskans believe that we need property tax reform; 62 percent singled out property tax reform as the top priority for the current legislative session.

Why then are policymakers in Lincoln increasing the rhetoric around cuts to income taxes? The answer to this important question is very simple: Income tax reform is the top priority of the special interests.

In fairness, some in Lincoln are pushing for relief for property taxpayers, but these proposals fall far short of what is needed. Relief efforts in the past have failed to produce meaningful long-term solutions to the unsustainable rate increases felt by Nebraska property owners.

Nebraska has the seventh highest property taxes in the country, higher than all neighboring states and traditional high-tax states like New York, Massachusetts and California. Over the past decade, rates have increased 60 percent for all property owners, and some data shows that rates have increased by 35 percent for residential property owners, 49 percent for commercial and 176 percent on agricultural land.

Just in the past two weeks, many Nebraska property owners are receiving property tax bills and being met with quite a bit of shock. Rates appear to have increased at outrageous levels across the state.

Such high increases confirm that true property tax reform is needed. International Property Tax Institute IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles.

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Reform for Nebraska’s Future was recently formed, and we have already received incredible support from Nebraskans in all 93 counties who believe that property tax reform is needed.

While relief has been proposed by some, now is the time to pass meaningful property tax reform that balances the state’s sources for revenue and alleviates the crushing burden placed on property owners to fund the state’s priorities.

Under current policy, property taxes make up nearly half of all revenues collected by government in Nebraska compared to 33 percent for revenue from income taxes and 19 percent from sales tax. We rely too heavily on property owners to fund Nebraska priorities.

Nebraska needs meaningful property tax reform that balances the state’s sources of revenue, is done in a revenue-neutral way, and ensures stable funding for state priorities like education, well into the future. This is a comprehensive, long-term solution that is much more equitable.

That’s not what the special interests want. But that’s what Nebraskans want. It is time for Nebraska’s policymakers to heed the call of Nebraska taxpayers and enact meaningful, revenue-neutral property tax reform.

ILLINOIS - NE Supreme Court hears property assessment case

The fight over Douglas County's valuations goes to court. It comes after last year's state order forcing the county to change its assessments.

The move meant property tax increases for those living west of 72nd street but decreases for some living in northeast Omaha.

The county is challenging the change.

The tax equalization and review commission back in the Spring of 2016 had a blanket property evaluation of a 7-percent increase in west and central Omaha—and an 8-percent decrease in northeast Omaha.

The Attorney General’s office representing TURC said they relied on data they’ve used before. The northeast has more salvageable values whereas the western part of the city has more development.

The arguments for Douglas County was that the data there showed unnecessary skewed for low value properties.

KMTV talked with a few lawmakers talking about the case. Senator Burke Harr said the situation should have been handled differently.

“I think that it could have been handled better, and I wish that TURC would have given county assessor a little more lee-way time to adjust to let her know—hey these are the areas of concern, I hope you address it next year,” said Harr.

The Nebaska Supreme Court will make a decision on this case in the next few months.

ILLINOIS - Opinion: A solution to the property tax problem

Todd Grigg teaches the importance of dollars and cents.

For more than 20 years, students in Grigg’s consumer education class at Triad High School in Troy, Illinois, have learned how to buy their first car, how to pay for college, and how to balance a checkbook.

But last week was different. Grigg taught one of his most painful lessons of the year: property taxes.

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“There’s no doubt,” he said. “In our area and in our state we’re losing people because of high property taxes.”

Grigg is on the front lines of a problem plaguing communities across the state. Illinoisans pay some of the highest property taxes in the nation. And that’s driving people to seek greener pastures elsewhere. Due to Illinoisans’ rapid flight to other states, the Land of Lincoln has been the only shrinking state in the region for the last three years running.

Each year during his tax lessons, Grigg stands in front of a map. And he details opportunities beyond Illinois’ borders.

“I feel I have an obligation to tell them because I care about my students’ well-being more than my state’s well-being,” he said. “I don’t want [my students] to make the mistake of staying here because it’s the only thing they know.”

Local governments shouldn’t be hiking property taxes when so many people are heading elsewhere and teachers feel compelled to offer students an exit plan. That’s a recipe for disaster. Homeowners deserve a property tax system that will give them security in their homes and certainty in the future. They deserve relief.

That’s why comprehensive property tax reform is a key part of a new plan to balance the state budget without tax hikes: “Budget Solutions 2018” from the Illinois Policy Institute.

The first step in the Institute’s plan is a five-year property tax freeze. No longer will Illinoisans see local property taxes rise faster and faster as their personal incomes stagnate. But a freeze isn’t enough. Illinois needs to make its local governments accountable again. Lawmakers must pursue several different reforms.

For one, the state must make it far easier to consolidate units of local government, which often do not provide unique services and come with expensive and duplicative bureaucracies that residents must fund through property taxes.

Illinois has by far the most units of government in the nation, at nearly 7,000. But right now, it can be more difficult to get rid of a unit of local government than it is to amend the Illinois Constitution.

Further, curbing wasteful spending habits at the local level requires eliminating state subsidies that block accountability.

That includes ending revenue-sharing agreements that fuel excessive spending; stopping pension subsidies that allow school districts to dole out higher administrative pay, pension spikes and other unsustainable perks; and doing away with the special carve-outs in the education funding formula that shift state dollars to districts with property tax caps and special economic zones.

Some local governments will cry foul at losing even a dime of state money. That’s to be expected. But this is where the final step of real reform comes in: eliminating costly state mandates imposed on local governments.

Local leaders who actually want reform are currently handcuffed by Springfield. The state must empower local officials to drive the best bargain for taxpayers.

Right now, one-size-fits-all collective bargaining rules drive up the cost of contracts for public projects. The most expensive workers’ compensation costs in the region consume hundreds of millions of public dollars. And outdated prevailing wage rules often mandate six-figure salaries and benefits for basic construction work.

All three of these items require bold reform, because all three are baked into property tax bills.

Ultimately, until state and local lawmakers can look residents in the eye and say they’ve tackled the property tax problem head- on, don’t expect families to stick around.

Mentors like Mr. Grigg will continue to tell the truth. And Illinoisans will continue to listen.

FLORIDA - Governor Rick Scott is proposing spending $558 million more on public schools this coming year but, it's not the state that would be putting the money up, it's local taxpayers.

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The assessed value of many homes has grown in the past few years and with each rise in value, property taxes have gone up.

Statewide, the collective value of the taxes on increasing values is $558 million this year. Governor Rick Scott wants to use all of that money to increase school funding.

And while the amount of money being collected from property owners is higher, Governor Scott says that isn't a tax increase.

"If you change the rate, that's tax increase. But if you spend more money this year because you happen to buy a boat you didn't buy the year before, the state didn't raise your taxes," he explained.

But house leaders don't see it that way.

"He [Governor Scott] raises property taxes," said House Speaker Representative Richard Corcoran.

Last year, the state used $420 million to keep the amount of required property taxes being paid from going up. The house plans to do the same thing gain this year.

"I've said it a thousand times: the house will not raise taxes," said Corcoran.

If the house wins this philosophical battle, all property owners win. If Scott prevails, businesses will see lower taxes on rent. Both sides agree there isn't enough money to do both.

The governor supported last year's reduction in property taxes and even included the amount in his total two-year tax reduction of a billion dollars.

TEXAS - How Many Local Govts. Levy a Property Tax?

Answer: 4,171

That’s right, more than 4,000 local governments—including 1,019 school districts, 1,064 cities, 254 counties, and 1,791 special districts—levied a property tax on homeowners and businesses in 2015, according to the Texas Comptroller’s latest Biennial Property Tax Report. That’s up from 4,128 in 2014 and 2,342 in 2010.

Source: Texas Comptroller of Public Accounts International Property Tax Institute IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles.

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Given the huge surge in the number of taxing units, it’s no wonder that Texans are clamoring for structural property tax reform. Few, if any, have the time and resources it takes to keep track of the tax rates set by each of these different entities and conduct a rollback rate petition drive when taxes adopted by one, some, or all get too high.

If local governments want to tax excessively, then the onus should be on them to ask the public for permission.

NEW YORK - De Blasio Invokes Trump To Make Case For NYC 'Mansion Tax'

Pitching a so-called "mansion tax" for New York City homeowners this week, Mayor Bill de Blasio made the case that the city's wealthiest residents already stand to benefit from tax breaks under President Donald Trump, and therefore should be able to afford an additional property tax.

"The wealthiest among us have every reason to expect a major new tax break at the federal level given the proposals already put forward by President Trump and Congress," de Blasio testified in Albany on Monday. "We think in light of the fact that the wealthiest will be receiving a substantial federal tax break that it’s time that they pay their share of the state and local taxes."

The tax, which City Hall says would go towards affordable housing for seniors, would be a 2.5 percent property transfer tax on sales north of $2 million. The city's budget office predicts that the tax would impact about 4,500 real estate sales in the coming fiscal year, generating about $336 million for the city.

"The proceeds will help provide affordable housing to roughly 25,000 low-income seniors," said mayoral housing spokesperson Wiley Norvell.

The assistance, in the form of vouchers, would be in addition to affordable housing commitments for seniors in Mayor de Blasio's controversial affordable housing plan. That plan has to date generated financing for more than 4,000 units of affordable senior housing, according to the city.

This is not the first time Mayor de Blasio has pitched a mansion tax. His first, pitched in 2015, failed. Budget experts say this request—which requires approval from the state senate and assembly, as well as the governor's office—is a long shot.

"It will likely be a tough sell in Albany," said Doug Turetsky, a spokesperson for the NYC Independent Budget Office. "They've got their own high-end tax up for renewal this year. It's a stretch to think that Albany will hit high-end New Yorkers twice."

Norvell countered that while "nothing worth doing is ever easy," he predicts the climate in Washington will sway the state.

If the tax were to pass, Turetsky predicted, it could "even the playing field" for New York homeowners. Currently, he said, many millionaires avoid paying a mortgage recording tax, or tax for taking out a mortgage, by paying for properties in cash or doing their financing overseas. "If you are getting your financing from a bank in France or Dubai there is no mortgage recording tax to the city," he explained.

On the other hand, he said, wealthy people might simply start making sales just below $2 million to avoid the tax. "What you are likely to see with this kind of tax, if you have a $2 million threshold, is an increasing number of sales coming in at $1.9 million, just under the threshold," he said.

"You are looking at a group that has the option to evade the tax," said Maria Doulis, director of city studies for the Citizens Budget Commission, a nonpartisan research group that analyzes city and state spending. "They can move, they can not buy property here, they can make decisions to change behavior based on the tax."

According to City Hall, there are a bulk of sales happening in the neighborhood of $4 million, which would not likely sell for less than $2 million to avoid the tax.

The governor's office did not immediately comment on the mayor's proposal.

Bobbie Sackman, a spokeswoman for LiveOn NY, an advocacy group for seniors, stressed Tuesday that the need for senior affordable housing is "deep and dire." According to a recent LiveOn study, the waiting list for senior public housing is about

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200,000 people. According to the group, two out of three seniors living in rent stabilized housing pay more than a third of their income in rent, making them rent-burdened.

Sackman said that while "we don't know where the mansion tax is going to go," she'd like to see it made available to seniors who want to stay in their current apartments. "To keep seniors in their current homes is key," she said.

Norvell said the tax would likely fund a combination of new senior housing construction, and vouchers for rent-burdened seniors.

NEW JERSEY - How shopping in this town can cut your property taxes

HADDONFIELD -- With its wide range of quaint shops offering everything from prom dresses to portraits, the upscale community of Haddonfield hosts one of New Jersey's premier business districts.

It should come as a relief to residents then that a new property tax credit -- in a town that recently had the second highest such tax in Camden County -- has received its official debut.

"There's constantly something new to try," borough Mayor Jeff Kasko said Monday's official launch of "Shop Haddonfield," which offers those who frequent downtown stores the tax rebate for doing so.

The program -- launched about one month ago and in partnership with Republic Bank and Fincredit Inc. -- has attracted roughly 20 businesses and more than 900 Haddonfield residents, renters, property owners and out-of-towners.

Susan Hodges, chairwoman of the Partnership for Haddonfield, said the program was approximately one year in the making. The price of doing business for businesses who've opted in is to buy a credit card machine and apply a percentage of each purchase to the cardholder's account.

The pitch was mailed out to all of Haddonfield's roughly 11,600 residents across 4,200 households, Kasko said. In exchange for swiping your property tax shopping card, you'll either get a credit toward your annual property tax bill or rebate mailed out for non-borough residents.

How Haddonfield business hopes to succeed where others haven't

Community Bikes and Boards is practicing what its name preaches.

Depending on how frequently you shop at enrolled businesses, Kasko said users could see anywhere between $20 or $30 to hundreds of dollars knocked off annual property tax bills. According to figures from the state Department of Community Affairs, Haddonfield residents had Camden County's second largest tax bill in 2015, coming in at an average of $13,830.

The program is nothing new to some South Jersey towns with a business community worthy of touting. Voorhees, Somerdale, Washington Township and Glassboro are just some of the municipalities already on board with the effort.

Mario Dinatale, director of community and economic development for Voorhees, said his township was the first South Jersey community to launch the program approximately five years ago after reading about it in a trade journal.

"Effort in is the result you get out," Dinatale said of constantly pitching the program to businesses and letting residents know that its open to them.

In Haddonfield, the trial by fire came right before the Christmas shopping season and, according to Community Bikes and Boards owner Rob Everitt, it's a much-needed shot in the arm.

"Every city and town in America should do it. It gets people off the computer and shopping in town to save money," he said. "No one likes paying taxes, so why not save a few bucks on products you're going to buy anyway," Everitt questioned.

Remi Fortunato, retail recruiter for the Partnership for Haddonfield, said the "ebb and flow" of downtown businesses means there's often something new worth walking out to see.

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"There's just some people who don't want to be in a mall," she said when asked why people choose to open up shop in a residential area rather than a shopping mecca.

Jordan Spinosi, who has rented a home in Haddonfield for the past two years, said he goes downtown to shop "at least once a week."

Asking about the significance of having such a variety of stores so close to home, "convenience and supporting your community," he said.

CONNECTICUTT - Time to explore a new property tax system for Connecticut

In an important step forward, CT Voices for Children, a Connecticut based non-profit research institute, recently proposed a plan to reform Connecticut’s outdated property tax system and replace it with one that will reduce the tax burden on middle- income and working families while ensuring all cities and towns have the resources they need to adequately fund Connecticut’s public schools.

Wait, What? readers will recall that Connecticut’s middle-income families pay about 10 percent of their income in state and local taxes, the poor about 12 percent and because the Connecticut tax structure coddles the rich, the state’s wealthiest residents only pay about 5.5 percent of their income in state and local taxes.

The new Connecticut Voices proposal would correct those inequities and provide real property tax relief for 2.7 million residents living in 117 of Connecticut’s 169 communities. At the same time the program would require wealthier residents to start paying their fair share in state and local taxes.

The underlying problem is that Connecticut underfunds its schools by close to $2 billion a year leaving the state’s public schools without the resources they need to provide every child with their constitutionally guaranteed access to a quality education.

The existing system also unfairly burdens the vast majority of local taxpayers.

In an historic effort to address this problem, Connecticut Voices for Children’s proposal would reform Connecticut’s property tax system as follows;

Thriving communities are made possible by good schools, roads, and other public systems. To support these building blocks of local economies, Connecticut’s cities and towns need a stable revenue source that generates needed resources without placing an unfair load onto taxpayers.

Currently, the property tax does the opposite. Connecticut’s property tax system makes residents in poor communities pay more, stifles economic development, and exacerbates racial inequalities. At the same time, because local school funding is so dependent on local property taxes, disparities in property wealth lead to disparities in opportunities for children.

We explore a partial solution to this problem: a system in which communities that tax themselves equally for education receive equal per-pupil funding for education. Our model would cut taxes for 2.7 million residents in 117 cities and towns while maintaining local control and education funding levels.

The report is based on Vermont´s adjusted statewide property tax system, with the following key features:

Gives 2.7 million residents an average tax break of about $400 per person.

Fully funds the Payment in Lieu of Taxes (PILOT) program, alleviating inequities in communities where concentrations of government, university, and hospital property have eroded the tax base.

Reduces disparities in property tax rates and thus reduce incentives for business to relocate from communities with the highest property tax rates to nearby communities with lower ones.

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Consistent with tradition of local control, communities willing to tax themselves more to spend more on education are allowed to do so.

Consistent with tradition of taxing property to fund education.

ALASKA - Evaluating Anchorage property tax assessments

Every year on Jan. 15, the Municipality of Anchorage is required to mail assessment notices to property owners for all taxable property.

That date begins a 30-day appeal period. Feb. 29 is the last day to submit evidence for appeals and during mid-March to June, the Board of Equalization, consisting of private citizens, hears the appeals. Very few property owners actually file a formal appeal and most minor appeals are handled at the counter, which is efficient and friendly, given all the circumstances.

What is perhaps most important is how the valuation occurs in the first place. The MOA is required to physically inspect every property at least once every six years, which becomes a year round re-inspection process for the staff. September through December is when they do new construction inspections and valuations.

An interesting anecdote is that some land developers actually wait to file plats for completed subdivisions until after the first of the year in order to pay taxes on undeveloped land instead of fully improved lots.

Sixty-five percent of the property tax base is residential. Twenty-seven percent is commercial and eight percent is personal property. The geographical area taxed includes south of Portage, north to Eklutna, the Anchorage Bowl and parts of Cook Inlet and Turnagain Arm.

Within that jurisdiction, the commercial definition includes four-plexes, hotels, apartments, retail, industrial and office. Although there is no actual data on what type of properties receive the most appeals, either informally or through the appeal process, one can surmise that higher dollar properties, like commercial, would be most likely to make a formal appeal.

What you might be surprised to know is that there are mandatory exemptions from property taxes required by federal and state governments.

Those exemptions include cemetery, charitable, educational, hospital, religious, disabled veterans, senior citizens, housing authorities, Native claim, veteran organizations and fire protection systems.

Optional exemptions enacted at local levels may include business personal property, disabled veterans, widow/widower of active military service connected death, charter schools, community purpose, economic development and residential owner occupants. The most controversial, however, is a tax-free abatement on deteriorated properties.

Why a property that is an eyesore to the community should pay no property tax is a mystery most likely to everyone except a few politicians who approved the tax-free status.

Senior citizens have 24 percent of the total exemptions followed by the municipality with 19 percent. Residential has 12 percent and the state and federal has a total of 15 percent. Just keep in mind that any new state, federal or MOA building does not contribute to the tax base and in some cases takes away current tax revenue when previously taxed land or buildings are put to a new tax-free use.

Most real estate professionals have acknowledged that the 2016 market was flat, at best, with small pockets of de-valuation in certain categories. Hopefully, the MOA tax assessor’s office views the market the same way with no increase in property taxes.

WISCONSIN - Retailers seek tax cuts with 'dark store' theory

To Menard Inc., the store it opened in the Village of Howard in 2012 is worth $5.8 million — roughly the amount the Eau Claire- based home improvement retailer believes it would fetch if it were closed and sold off as an empty shell like, say, the former Home Depot in Beaver Dam.

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To the Village of Howard, just outside Green Bay, the Menards is worth more than twice that amount, precisely because it’s not vacant, like the Home Depot was for five years, before a sheet-metal fabricator bought it.

The Menards building houses an operating store, and in real estate, the village argues, that matters.

Who’s right? Courts across Wisconsin are dealing with that question, and the answer will determine whether big-box retailers like Menards, Lowe’s, ShopKo and others get to cut their collective tax bills by millions — potentially shifting those taxes to homeowners and other property owners.

At issue: the increasing use by the retailers of what critics call “dark store theory” to challenge tax assessments. It’s a trend that has municipal officials across Wisconsin pressing for legislation they hope will rein in the growing practice.

But big-box operators argue that their approach to appraising their huge stores is market-based and correct. They’ve been overtaxed, they say, and they’re been pushing their point in court.

A wave of litigation that first swelled in Michigan, where retailers have succeeded in slicing assessments in half, has swept into other states. Among them is Wisconsin, where court decisions already have led to lower assessments on leased retail properties like those typically used by drugstore chains Walgreens and CVS.

“Michigan and Indiana were kind of on the forefront of it, but now it’s coming here pretty heavy too,” said Dan McHugh, assessor for the Village of Mount Pleasant in Racine County.

Menards alone has filed more than a dozen lawsuits against Wisconsin municipalities since May. Lowe’s has filed another seven. ShopKo has filed two.

Whether the retailers’ argument for significantly lower assessments — and tax bills — will gain as much traction here as it has in Michigan isn’t yet clear.

But the prospect has municipal officials sounding alarms. They say that if the big box retailers succeed, the money they save will come out of the pockets of residents whose tax bills will rise.

“That’s the direction we fear the state will be going if the commercial property tax base is cut by 50% over the next five, six years,” said Curt Witynski, assistant director of the League of Wisconsin Municipalities, “because everyone in retail’s going to take this strategy. Who wouldn’t if it’s successful?”

Here’s the strategy in a nutshell:

Big box retailers argue that the fact that a store is operating, maybe even thriving, has nothing to do with the value of the underlying real estate. The best way to judge that value, they say, is to look at “comparable sales” — the prices that vacant big boxes command when they are sold.

Those prices typically fall well short of the assessments on operating stores. The vacant buildings, often 100,000 square feet or more, have limited appeal, said Don Millis, an attorney in Madison who has represented Target and other retailers in assessment challenges.

“First, there are very few people who are interested in buying a store that big, and two, if they wanted a store like that, chances are it’s not going to be built to their dimensions. They’re just not worth that much on the market.”

Basically, the retailers contend, the business inside the box — be it Lowe’s, Target, Menards or whatever — has nothing to do with the value of the box itself.

And that, Millis said, has long been the standard in Wisconsin.

But he said it is “the very rare circumstance” that an assessment challenge using those standards leads to a 50% reduction. Most reductions, Millis said, run about 10% to 20%.

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“We’re not valuing the tenant or the creditworthiness of the tenant,” he said. “We’re valuing the property — the physical attributes of the real property.

“What we’ve been arguing, and what the courts have found, has been the law for decades,” he said. “It’s the assessors and the municipalities that want to change the law.”

Crying foul

Municipal assessors, though, cry foul.

Comparable sales are a foundation for assessing property in Wisconsin. If there is such sales data, it must be used before any assessment method besides a recent sale of the specific property itself.

But the assessors argue that the “comparable sales” advanced by retailers aren’t truly comparable. Not only have the stores for the most part gone vacant, they’re also often shackled by lease restrictions barring uses that might compete with the business of the departed tenant.

That was the case with the former Walmart store at 4500 S. 108th St. in Greenfield. Walmart’s restrictions prevented other national big-box retailers from purchasing the property, according to a judge’s order in a Dane County assessment case.

A church bought the building, occupying part of it and leasing part to the St. Vincent de Paul Society for a thrift store.

Lease restrictions or not, a big-box store may close because the value of its location declines, making it an inappropriate comparison with a new, operating store, said Rocco Vita, assessor in Pleasant Prairie.

“A dark store is empty because its highest and best use is not as a retail store or a big-box retail store anymore. It’s reached the end of its useful life,” McHugh said. “So to compare that to an operating store that is still being put to its highest and best use is improper.”

Retailers, though, argue that such comparisons are entirely proper, and show the true market value of the big boxes.

So while municipalities may rely on the original land-acquisition and construction expenses, retailers contend that their stores are worth much less than they cost to build, even when they’re only a few years old.

The Howard case

Take that Menards in Howard. It opened in 2012, on an 18-acre site Menard Inc. bought in July 2011 for $5 million. The firm spent another $5.6 million to erect one of its huge retail buildings, according to village records.

That’s $10.6 million total.

But in its legal challenge, Menards argues that as of last January, less than four years after the store opened, it was worth $5.8 million — or about $800,000 more than the company paid for the land alone.

Menards calculated the $5.8 million value for its operating, open-for-business store in Howard based on the prices commanded by several vacant stores: a former Cub Foods in Green Bay, a former Sears in Sheboygan, the former Home Depot in Beaver Dam, and others.

The result: a value less than half the $12.5 million the Village of Howard says the Menards store is worth.

“By the same logic,” village administrator Paul Evert said, “shouldn’t we all compare our home (values) to foreclosed homes, or abandoned home sales?”

Minnesota attorney Robert A. Hill — who represents Menards, and who bristles at the “dark store” label with its “Star Wars” overtones — said municipalities “just want to pretend that what’s black is white, and that real estate somehow should not be the only thing that gets assessed.”

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Michigan has been ground zero for “dark store” challenges, thanks in part to how hard the Rust Belt state got hit by the Great Recession.

With large numbers of big-box locations closing and coming on the market as the economy soured, retailers suddenly had many examples of sales of buildings that were much like theirs, only vacant, said Jack Van Coevering, a Grand Rapids lawyer who represents municipalities.

Michigan's response

They found a receptive ear at the Michigan Tax Tribunal, which rules on property tax disputes. After precedent-setting decisions, upheld by an appellate court in 2014, assessments on big-box stores tumbled sharply statewide, as did the tax bills that resulted, Van Coevering said.

Before the decisions, assessments on big-box stores statewide averaged $55 a square foot, according to Van Coevering. Now, he said, they’re under $25.

And new appeals are seeking values as low as $10 a square foot, sometimes on new buildings, he said.

“There’s wave after wave after wave,” Van Coevering said. “Whether we’ve reached the end of the storm, I don’t know.”

A legislative “fix” backed by Michigan municipalities passed the state’s House last year by a large majority, but died in the Senate.

In Wisconsin, the legislation being prepared is expected to take an approach similar to Indiana's. Last year, the legislature there passed a law that is intended to ban using sales of vacant stores to determine the assessed value of an operating store.

Indiana acted after the state’s Board of Tax Review, in December 2014, ruled that the assessment on a Meijer store in Indianapolis should be reduced by more than half.

“That’s when we realized there may not be a bottom to how low they could go,” said David Bottorff, executive director of the Association of Indiana Counties.

Also helping spur action by the counties was a Board of Tax Review ruling that cut the assessments on a Kohl’s Department Store in Kokomo by more than a third.

In both cases, the board allowed use of the sales of vacant big boxes to help determine the appropriate assessments for the operating stores.

If that approach were widely used to value commercial and industrial properties across Indiana, it could boost the annual bill for other taxpayers by about $50 million, an increase of 0.8%, an analysis commissioned by the counties’ association says.

The League of Wisconsin Municipalities says the impact could be more dramatic on communities here with extensive retail development. Homeowners in places such as Wauwatosa, Oconomowoc and West Bend could see tax hikes of 7% or 8% — more than $250 a year on average, the League says.

The League’s figures assume a 50% reduction in value not just on national retailers but on a broader range of commercial property, along with warehousing and some manufacturing.

Millis disputed the assumptions. He said 50% reductions in assessed value are very rare, and that the League greatly overstates the universe of properties that could be susceptible to “dark store” theory.

ILLINOIS - Rochester School District opposes creation of TIF

Village and school officials in Rochester are at odds over a proposal for the community's first tax increment financing district.

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School Superintendent Tom Bertrand said the school board has instructed him to attend a public hearing Monday and voice opposition to the inclusion of residential property in the TIF.

TIF districts rely on increased property tax revenue - the "increment" - from new development to provide financial incentives for additional development, including road, water and sewage improvements.

Bertrand said TIF districts were created primarily to promote new commercial development. However, the village, in its proposal, included residential areas as part of the TIF, taking away a key funding source for the school district.

He also fears, he said, that pulling in existing residential property could mean higher interest rates on bonds the school district is paying off.

"I understand from a village standpoint why it is being done, which is to address infrastructure issues throughout the village, and the only way do it is to put property in the TIF," Bertrand said.

"When villages or cities pull existing properties, especially residential property, that pulls annual increases in value from our ability to pay toward bonds."

Rochester officials have estimated a backlog of infrastructure needs at $23 million, including roads, gutters, street lighting, curbs, alleys, park upgrades, sidewalks, water and sanitary sewer lines, and the stormwater system.

The TIF development area covers 604 lots that qualify as "blighted" or "conservation" areas, according to a legal summary. The initial life of a TIF, which does not affect existing tax rates and must be approved by the state legislature, is 23 years.

Village President Dave Armstrong said the only opposition he's heard about the proposal is from the school district.

Most residents recognize the need for infrastructure improvements, and would also like to see the village attract a grocery store, he said.

The school district could eventually benefit, he noted, because the creation of a TIF district could spur residential development, which in turn could boost enrollment.

"I know where they are coming from because they are afraid if the building takes off in areas of the TIF, the (school) district will not get increases in equalized assessed evaluation," he said.

"They need to take into account it's going to be a lot more difficult for us to get anything to take off if we do not give incentives to commercial areas a little bit."

Bertrand said estimating how much the school district would lose as a result of the TIF is complicated. Still, he calculates that the district could lose $6.8 million over 23 years in tax revenue, under the current proposal.

However, where it gets complicated, Bertrand said, is gauging how much that figure will be offset by factors such as an increase in general state aid, a possible alternative funding deal with the village or other variables.

In theory, general state aid would make up the difference of what is lost in local property taxes, but Bertrand said that is wishful thinking given the state budget impasse and years of the state under-funding education.

Even with additional state aid, he projects the school district would lose out on $2.3 million over the 23-year lifespan of the TIF.

"I have little confidence the state will backfill much in general state aid," Bertrand said.

Further complicating matters, he added, is Gov. Bruce Rauner's push to freeze property taxes and uncertainty as to whether talks of changing the education funding formula in Illinois will be a net positive or negative for Rochester.

"There are so many moving parts that the timing of this (TIF creation) couldn't be worse," Bertrand said.

According to Armstrong, village officials haven't ruled out working out an agreement with the school district and other taxing bodies to help ease the financial loss. International Property Tax Institute IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles.

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Several ideas have been floated, including rebating 3 percent to 5 percent of the money collected in the TIF to the affected taxing bodies, Armstrong said.

Bertrand said he appreciates how transparent and professional the village has been so far and is optimistic a deal can be reached.

After Monday's public hearing, the board could vote on creation of the TIF in late February. Several board members can't attend the regularly scheduled meeting, so the village will likely have to schedule a special meeting, Armstrong said.