Question: Why did my property taxes go up this year?
Each person who owns property is subject to tax by multiple entities. These entities include, but are not limited to Clark County, Taylor County, Owen-Withee School District, Townships or City, Chippewa Valley Technical College and the State of Wisconsin. Since your overall tax bill is composed of several entities, all will play a role in the amount of tax you owe. The levy from each of these entities, as well as the overall property value an owner has, will determine your overall tax bill.
Question: If the school mill rate remained stable at $6.30 as the District said it would, why do I see an increase in taxes for the Owen-Withee School District?
While the mill rate per $1,000 of property value is one contributing factor to your overall bill, the second factor is the actual amount of property value a person has. Since almost all property owners saw an increase in the Fair Market Value/Equalized Value of their property, the mill rate is, by law, applied to the new higher value.
Question: Can you give me an example that puts it all together?
For example, if a property owner had a Fair Market Value of $150,000 in 2021 and paid $8.00/$1,000, they would pay approximately $1,200 for the school district’s portion of tax. In 2022, the school district mill rate remained at $8.00/$1,000 and the equalized value of the property increased to $200,000. The tax increases to $1,600 due to the increase in equalized/market value of the property. The School District has no ability to impact the Equalized/Fair Market Value of a property and is legally required to use this property value for taxing purposes.
Equalized or market values of homes increase when there are improvements within the community, when homes are in desirable locations, and when supply of homes is lower than the demand. When there is an inventory shortage of homes, equalized market values increase.
Question: How does the tax rate of the Owen-Withee School District compare to surrounding districts?
In comparison to the surrounding school districts, Owen-Withee School District at $6.30 ranks behind Medford at $5.99 and Thorp at $5.62 and ahead of Greenwood at $7.56 per thousand.
Question: How does the Board of Education create a consistent tax rate across fiscal years?
The State of Wisconsin’s school finance system limits the amount of property taxes in certain accounting funds through a system called the revenue limit formula. The Board of Education can determine the amount of the property tax in the debt service fund, which is the fund that pays back all the prior community-approved debt, and the community service fund, which is the fund that supports the Student and Community Wellness Center. Between the property taxes controlled by the revenue limit formula and the property taxes approved by the Board of Education, the total property tax levied can be calculated to maintain consistent tax rate across fiscal years.
Question: Questions have been raised about the prepayment of debt by the School District. What does that mean?
Defeasance, or prepayment of debt, is a provision of Wisconsin state law that allows school boards to levy property taxes into Fund 39, the debt service fund, to prepay district debt. In easiest terms, a common comparison would be like pre-paying your car or home mortgage payments.
The prepayment of debt pays off debt already approved by the community through referendum. Paying the debt earlier reduces the cost of the interest on the loans, saving taxpayers’ future property tax costs while at the same time preparing the district financially for potential future projects in which it could take on additional debt with little to minimal levy impact.