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Economy might not lower property taxes

Homeowners urged to meet with assessors

By Kelly Smith

Posted: April 27, 2009

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John Macy

Lake Country homeowners – including those in Lisbon and Sussex – should not expect their real estate tax assessments to be reduced this year just because the market value of their homes might have decreased as a result of a slumping housing market and economic recession.

A consultant for the Wisconsin Department of Revenue says that local boards of review should not reduce tax assessments on those properties because that would be 2 unfair to other real estate taxpayers.1

Attorney John Macy said that if the local boards of review allow the assessment of some property owners to be lowered solely because of existing economic conditions, other property owners will have to assume a larger share of the tax burden.

Macy explained that to maintain uniformity of assessments, boards of reviews would have to reduce the assessments of all homeowners who could prove their property value declined during this year, not just those who appeared before the board seeking reductions.

Uniform assessments, he said, are one of the foundations of the real estate tax system. Boards of review should lower assessments only if they are presented with evidence that the assessment was incorrectly established and the errors result in a significant change in the assessed valuation, he added.

Sussex Village President Tony Lapcinski was among the approximately 50 Lake Country elected and appointed officials who attended a training seminar for members of local boards of review that was conducted by Macy at Nashotah Village Hall.

Lapcinski acknowledged that it will be difficult for boards of review to explain to homeowners that it would be unfair to reduce assessments simply because the market value of a home might have dropped below the assessed value.

"It is going to be a challenge," he said, pointing out about a dozen cases in 2008 where homeowners were challenging their assessments because they believed that the market value of their home had dropped below the assessed value.

"In most of the cases they really didn’t have the evidence," he said, "but in one case it was because of an assessor’s error and we lowered it."

Local officials are urging homeowners with questions about their tax assessments to contact their local assessor during "open book" meetings, which will be scheduled during a 30-day period beginning with the second Monday in May.

During the meetings, assessment officials will explain to homeowners how their properties have been assessed and answer questions about the assessments.

Homeowners should contact their municipal clerks to learn the dates for the open book sessions in their communities.

Local governments use property assessments to apportion the total property tax – the tax levy – fairly among their property owners. For example, if a property’s assessed value represents 1 percent of the community’s tax base, the owner will pay 1 percent of the community’s property taxes, according to an explanation from the Wisconsin Taxpayers Alliance.

A board of review is a quasijudicial body composed of elected members of a municipality’s governing body. State law requires that at least one board of review member attend a training session conducted by representatives of the Wisconsin Department of Review. The board can adjust assessments when evidence is presented that the assessment was incorrectly established and the errors in the assessment process significantly affected the assessed value of the property.

Macy – a senior partner in the law firm of Arenz, Molter, Macy and Riffle, which represents about 40 municipalities or special districts, including the Village of Sussex – conducts training sessions for the department.

Macy warned the local officials that it will be a unique and challenging year for boards of review because economic conditions have resulted in assessed values of residential properties that appear to be higher than their market values.

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