This is the second in a series of posts taking a closer look at legislative study committees that recently completed their work on topics related to taxes, K-12 education and public schools.
This time we’ll examine the work of the Legislative Council Study Committee on Property Tax Assessment Practices (a/k/a the “dark store” study committee), which met for the last time last week and voted to recommend three bills for the Joint Legislative Council to introduce in the 2019-20 session.
As noted in a previous post, one of the draft bills recommended by the study committee creates a process by which other taxing jurisdictions (school districts, technical college districts and counties) may agree to contribute to sharing in the costs a municipality incurs in assessing a particular property and defending the assessment against a taxpayer appeal.
Specifically, school districts and the other jurisdictions would designate board members to meet with governing body members from the taxing district (i.e., the city, village or town) as a four-member “joint board of assessment.” (This proposal was described in a previous post.)
By a majority vote, this four-member joint board could agree to share in the costs of hiring expert help with assessing particular parcels and/or agree to share in the costs of defending any legal challenges to those assessments. If the other taxing jurisdictions (i.e., the school district, county and technical college district) decline (by majority vote) to share in the costs, the taxing district (city, village or town) could still proceed with assessing the property and defending against a challenge to the assessment as it can under current law.
The WASB successfully lobbied members of the study committee to include a revenue limit exemption equal to the school district’s portion of any costs agreed to be shared. The intention was that districts would not have to take budgeted funds away from programs for students in order to pay these costs.
Unfortunately, this added exemption may not work as intended. Current law gives the state Department of Revenue until Nov. 15 to determine the amount of rescinded or refunded taxes to be charged back to, and collected from each taxing jurisdiction. However, school districts must certify their property tax levy each year by Nov. 10, so the DOR determination occurs too late for school districts to adjust their levy. Nevertheless, schools are required under current law to pay the taxing district the amount to be charged back to the by the following Feb. 15.
The WASB will seek an amendment to correct this. Otherwise, schools must pay these costs in the current budget year but could have to wait a full year before they can levy to recoup that money.
At its final meeting, the study committee amended the bill draft further to require all taxing jurisdictions (including school districts) to additionally share in the cost of paying any interest owed on property taxes ordered refunded or rescinded due to a successful assessment challenge. Currently, paying this interest is the sole responsibility of the municipality (i.e., the city, village or town) that conducted the assessment.
Again, this addition to the bill is problematic for school districts. The state Department of Revenue is also responsible for calculating any interest owed on refunded or rescinded property taxes, and has until Nov. 15 to determine this amount. Again, this is too late for school districts to adjust their levy.
Should these recommended changes move forward, the WASB will seek an amendment to correct this situation. One option would be a change to push back the date on which schools must certify their levies from Nov. 10 to sometime after Nov. 15 to allow the levy to be adjusted by the amount of the revenue limit exemption. There may be other approaches as well.
The second bill recommended by the study committee authorizes the assessor to request a taxpayer to provide a specified list of documents relating to the fair market value of the property. The bill prohibits a person receiving such a request from objecting to an assessment before the board of review if the person fails to make a good faith effort to provide the requested information by March 31.
The final bill makes changes to the process taxpayers must follow when filing actions for excessive property tax assessments.