Response to Laura Menefee's April 11, 2024 letter to the Peninsula Pulse
Dear Laura,
I saw your letter, https://doorcountypulse.com/letter-to-the-editor-school-referendums-should-not-force-seniors-from-their-homes/.
Maybe you are aware of the property tax deferral loan program already, but if not, or you have questions about it, this is an informational paper: https://docs.legis.wisconsin.gov/misc/lfb/informational_papers/january_2023/0026_property_tax_deferral_loan_program_informational_paper_26.pdf
The program allows seniors to put off paying property taxes, and in the meantime the Wisconsin Housing and Economic Development Authority pays the tax. The loan can be repaid from the sale of the property years later, such as when they pass away.
This page lists out different property tax credits: https://www.revenue.wi.gov/Pages/FAQS/slf-ptrecred.aspx
In addition, the Tax Counseling for the Elderly program provides assistance for, among other things, filling out the form for the homestead credit. Pages describing the homestead credit and other credits are linked to from the list of credits.
This is the nearest location presently offering the counseling: https://irs.treasury.gov/freetaxprep/jsp/direction.jsp?id=15709&lng=-88.010368&lat=44.514682
The counseling program is open to the following groups:
Low-to-moderate income individuals
Senior individuals
Individuals with disabilities
Individuals who qualify for the homestead credit or the earned income credit
Wisconsin’s constitution has a uniformity clause: https://docs.legis.wisconsin.gov/misc/lrb/reading_the_constitution/reading_the_constitution_1_2.pdf
The constitution permits certain exemptions from property tax, but not others. Wisconsin exempts benevolent nursing homes for the aged, camps for the disabled, and low-income housing owned by a benevolent organization from property tax: https://docs.legis.wisconsin.gov/statutes/statutes/70/11/4
However, state legislators can’t pass a law to exempt property taxes for residences due to age, disability, or income, and it would take a constitutional amendment to change that. Same goes for school referendums.
The homestead tax credit is limited by income, and was unsuccessfully challenged multiple times according to this table: https://www.revenue.wi.gov/DORReports/ccihome.pdf
Because it is considered a tax relief, the homestead tax credit is not required to be uniform across income levels. Yet the linked document about the uniformity clause mentions past attempts at tax relief which were found to be unconstitutional. There is some ambiguity involved with Wisconsin’s tax code, which gets decided by the courts one way or the other. Currently, there is a court challenge to the 402-year revenue limit scheme for schools: https://www.wmc.org/wmc-in-the-news/wmc-sues-over-400-year-property-tax-increase/
This was a result of Governor Evers’ use of the line item veto. It allows school districts to collect a certain amount of additional taxes without the need for referendums.
One way to help keep people from being forced out of their homes due to rising taxes is through an anti-displacement fund. In Milwaukee, an anti-displacement fund makes tax payments on the behalf of eligible homeowners in certain neighborhoods: https://www.mkeunited.com/antidisplacementfund. Because of the uniformity clause, the city is prevented from requiring developers to contribute to the fund: https://milwaukee.legistar.com/View.ashx?M=F&ID=9426173&GUID=A16BBCB0-B465-4FA8-B86B-149F4704AA03
Another way to help keep people from being forced out of their sole residences due to property taxes is to enact a vacant home tax. The tax could raise funds to offset existing taxes or better fund existing tax credits. If a new law defined a vacant home tax as a privilege tax, it should survive a challenge. Privilege taxes are not restricted by Wisconsin’s uniformity clause. A vacant home tax would not be in place of other taxes, but would be an additional charge for the privilege of having multiple residences for leisure purposes, snowbirding, real estate speculation, or some combination of these.
Do you know others who want to see their existing property taxes go down? It is possible to form an interest group for pressuring local officials. Local governments could pass resolutions asking their state legislators to enact a vacant home tax. If it was demonstrated that people in Door County supported a vacant home tax, it would bring attention to the topic elsewhere in the state.
These are some posts which discuss the vacant home tax: https://doorcounty.substack.com/t/vacant-home-tax