Tired of paying high property taxes...

Recently I had an opportunity to become involved with an organization called Civitas. "Civitas is based on the principle that people of good will and ability are more likely to become involved in their communities if they have information and an understanding of how local government operates, where the money comes from, how it is spent and how decisions are made." Growing up in Wisconsin and even today, I am continually told by some people that our property taxes are out of control. I can almost hear some of my parents friends screaming, "These taxes are ridiculously too high and should be lowered."

A recent meeting at a Civitas luncheon told me that property taxes in Wisconsin are higher than most states, but not the highest in the country. Wisconsin currently ranks ninth nationwide in terms of the total property tax burden, according to the latest estimates from the Taxpayers Alliance. On the other hand, Wisconsin also has lower income tax costs and governmental fees.

The core idea that I took away from this recent seminar is that higher property taxes are not necessarily a bad thing. Although someone living on Lake Waubesa that just paid nearly $7000 in property taxes last year for their "fixer upper" might argue otherwise. Let's think about this for a second. If one considers that Government needs money to provide community services such as schools, roads, parks, health and other human services, then the money has to come from somewhere. Where is the best source for raising this money?

The three main areas of taxation are personal income taxes, fees, and property taxes. One of the speakers at the Civitas luncheon mentioned that, "the advantage of obtaining most of the income from property taxes is that it offers a stable, predictable source of revenue." If Wisconsin derived most of its revenue from income taxes, then many governmental budgets could vary dramatically from year to year. Imagine if Kraft (a major employer in the Madison area) had their best year ever and thus paid a huge amount in income taxes. If the state received most of the revenue from income taxes, then that would be a good year for state budgets because there would be plenty of money to go around. Now imagine the other worst-case scenario of Kraft firing everyone because they are going out of business (remember this is hypothetical). This could cause a huge shortfall in the state budget.

Anyone who has bought or sold real estate in Wisconsin knows that in order for a property to transfer into another owners name, all liens must be paid. In fact unpaid property taxes are one of the first items to be paid out of the sale proceeds at closing. This is a good thing for the state because it ensures that the revenue is actually collected.

Okay so let's just say that I agree that maybe higher property taxation is a good thing, as opposed to higher income taxes or other fees. But let's get real here, we are talking about a lot of money. In 2006 the State collected $113,585,000 in property taxes. If we're really trying to change the world and do good public policy, the real issue is how do we control government spending. There is obviously a balance that occurs between the public and private sector, but there must be accountability in the public sector to control costs. The only real solution involves cooperation from people that care about our community's future.

If you really care about controlling government spending, then I encourage you to get involved with local politics because I truly believe that your opinion really does count.

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