When voters go to the polls on February 20, 2024, the following referendum will appear on the ballot:
Shall the School District of the Menomonie Area, Dunn and St Croix Counties, Wisconsin, be authorized to exceed the revenue limit specified in Section 121.91, Wisconsin Statutes, by $4,200,000 beginning with the 2024--2025 school year, for recurring purposes consisting of operational expenses?
The Menomonie Minute will be posting a series of articles about the upcoming school referendum. Before looking at the specifics of the referendum, I feel it's important to provide some background information on property taxes. The first two articles will cover property taxes and the remainder will deal with the referendum.
Sources used for this article include the Dunn County Treasurer's website, the Wisconsin Department of Revenue website, the UW Extension website, articles from the Eau Claire Leader-Telegram, the Colfax Messenger, old Dunn County News articles, and interviews with the City of Menomonie Administrator Eric Atkinson, County Manager Kristin Korpela, Dunn County Treasurer Sifia Jevne, and assessors Randy Prochnow and Kevin Irwin. A huge thank you to these individuals for taking the time to speak with me.
This first article will explain the numbers you see on your property taxes and property valuations.
Before we begin, here are a few things to know:
For most people living in the Menomonie area, there are four taxing jurisdictions on your bill - Dunn County, Chippewa Valley Technical College, the School District of the Menomonie Area, and your municipality. Your municipality will be the city, village, or township that you live in. Anyone living in the Tainter Lake Rehab District will have a fifth taxing jurisdiction.
The levy is the portion of any taxing entity's budget that needs to be funded by property taxes.
The mill rate is the amount of tax for every $1,000 of a property's assessed value.
Thus, a mill is one-thousandth of a dollar, or $1 of tax for every $1,000 of a property's assessed value. The basic calculation for the mill rate is the levy divided by the equalized value.
PROPERTY VALUATIONS
If you own property, you should have received your property tax statement for 2023. At the very top, you will find the total assessed value and the total estimated fair market value.
Assessed value is the value the assessor places on your property. It is used to distribute the municipality's tax burden among the individual property owners in that municipality.
Your assessed value will only increase when a reassessment is done, or major improvements are made to the property, such as adding a garage. As an example, the Town of Menomonie was last reassessed in 2016, and for most people, assessments will not have changed since then. The Town of Red Cedar was reassessed in 2022 and residents there will have noticed a change on their 2023 tax bill.
Each municipality has its own assessor, although most assessors will work for multiple municipalities. Dunn County's thirty municipalities are covered by several assessors. Because assessors may value property at different percentages of market value and because the length of time between reassessments will vary from municipality to municipality, the Wisconsin Department of Revenue (DOR) must equalize property values.
Equalized value is the statutory full market value of all real property within each jurisdiction (except agricultural land, which is valued based on production/earning potential). Equalized values are provided by the DOR.
The DOR analyzes market sales statewide to estimate each municipality's full market (or equalized) value. Equalized values provide a means of comparing different municipalities, even if they are assessed at different percentages of market value.
The DOR assigns each municipality an assessment ratio. You'll find this number in a box between the assessed value of your property and the estimated fair market value. The estimated fair market value is your assessed value times the ratio. Every property in the municipality will be multiplied by that ratio.
Examples of assessment ratios in Dunn County - the Town of Menomonie has an assessment ratio of .6361, the City of Menomonie is .7596, and the Town of Red Cedar is .9936. There will be a bigger difference between the assessed value and the fair market value on a property in the Town of Menomonie than in the Town of Red Cedar, where the numbers will be about the same. As stated previously, the Town of Menomonie has not been reassessed since 2015; the Town of Red Cedar was just reassessed in 2022.
The assessed value is essential for maintaining equity among individual taxpayers within the municipality, while the equalized value maintains equity between municipalities within a taxing jurisdiction (like the county or school district).
Net Assessed Value Rate: this is the combined mill rate for the county, municipality, school, and tech school (and the Tainter Lake Rehab District, if applicable). This number multiplied by your assessed value equals the gross property tax on your tax bill. However, this is not truly your gross property tax, which will be explained below.
The next article in the series will look at how the net assessed value rate is calculated.
PROPERTY TAX CREDITS
Three credits are applied directly to a property tax bill.
Lottery Credit – if you are a Wisconsin resident, own your property, and it is your primary residence, a property owner may qualify for this credit.
First Dollar Credit – if there is a real property improvement (a house or other building) on the land, the property qualifies for this credit.
Both the lottery and first-dollar credits are determined using a somewhat complicated calculation using the assessed value of properties, the assessment ratio, a maximum credit value provided by the state, and the equalized value school rate.
The lottery credit and the first dollar credit are the same throughout the school district regardless of property valuations. For the school district of Menomonie, the lottery credit is $190.66, and the first dollar credit is $51.22.
School Levy Tax Credit – all taxable real property in Wisconsin qualifies for this credit. This is a very confusing credit and will be discussed in later articles.
The School Levy Tax Credit is distributed to municipalities based on their share of statewide school levies. The credit reduces individual property tax bills and is not considered a source of revenue by school districts and other local governments when setting their annual budgets and determining their property tax levies.
This school levy tax credit is not shown as a reduction from the gross tax on your tax bill like the First Dollar Credit and Lottery Credit; however, if you look up your tax information online, you will find it subtracted from your gross tax. So, your actual gross property tax includes the school levy tax credit. All property tax information can be found on the Dunn County Treasurer website. A wealth of information can be found under the section titled Tax Bill Information/Assessment Information.
THE IMPORTANCE OF EQUALIZED VALUE
Equalized value is an important concept that needs to be understood in order to understand how property taxes are calculated. Equalized value will be discussed in the next article as well.
Apportioning is the process of dividing the tax levies for each taxing jurisdiction among all municipalities in that jurisdiction based on each municipality's equalized value. For example, a county levy is apportioned among all municipalities in the county, and a school levy is apportioned among the municipalities in the school district.
As previously stated, the DOR analyzes market sales statewide to estimate each municipality's full market (or equalized) value. They provide a report to the county that is used to apportion the county levy among the municipalities. The City of Menomonie accounts for 31.7% of Dunn County's equalized value, so 31.7% of Dunn County's levy will be apportioned to the City of Menomonie. The Town of Menomonie accounts for 7.85% of the county's equalized value and will be apportioned 7.85% of the county levy.
(NOTE: These equalized value percentages were taken from a report dated August 2023 and have changed slightly since then.)
Going back to the assessment ratios discussed earlier in this article, the Town of Menomonie will have much lower assessed values than the Town of Red Cedar, as reflected in the ratios (.6361 vs. .9936). Equalizing the property values makes things equitable between the different townships - the tax apportioned to each township is based on the equalized value, not the assessed value.
As stated earlier, the assessed value is essential for maintaining equity among individual taxpayers within the municipality, while the equalized value maintains equity between municipalities within a taxing jurisdiction (like the county or school district).
The next article will discuss how property taxes are calculated, mill rates, and why property taxes in Dunn County are higher than in some neighboring counties.
While all the information contained in this article is believed to be accurate, it is not guaranteed. The user should not rely solely on the information provided and should seek additional information from other sources. While some information was provided through interviews with individuals, any errors are my own.
Please feel free to share any comments or questions you may have about this article. You can send me a message HERE.
