Multiple factors affecting 2018 tax bills
By Tracy Ouellette
SLN Staff
East Troy Village Administrator Eileen Suhm presented the 2018 budget at the Nov. 6 Village Board meeting saying the expected increase in the tax rate was the result of a combination of “unusual” circumstances helped to create a situation where the tax increase was more than expected.
She told the board, which approved the $2.7 million budget, that the total budget increase a little less that 3 percent over 2017, but the tax bills will increase greater than the levy increase percent because of changes in the assessed value and equalized value of the village’s properties.
“Despite levy increases in levy of approximately 1.23 percent general and a total of 1.97 percent with debt for village and 1.5 percent for the School District, I am estimating a tax rate increase of 3.79 percent,” Suhm said in a follow up interview.
She went on to note the figures are not final as they are still waiting on the certified county levy and the school tax credit information from the state.
Suhm said there were two factors contributing to the increase. The first being the assessed value (not including the manufacturing property) of the village’s properties, which was $344 million for 2017.
“Despite the fact that the village had approximately $4.2 million in new construction, which should increase the total assessed value, our total assessed value decreased for a second year in a row,” she said.
Suhm said large contributor for the 2017 decrease was a business the state changed to a manufacturing assessment.
“This change alone resulted in over a $3 million dollar decrease in our assessed value,” she said. “There were other decreases too, but that’s the biggest one.”
She explained that this change helped to increase the tax bill because the mill rate used to calculate the bills is the levy for each taxing jurisdiction (Village of East Troy, East Troy School District, Walworth County, Gateway Technical College) divided by the total assessed value. This means if the assessed value decreases, the tax rate increases. The opposite is true if the assessed value increases, the tax rate decreases.
“I like to think of it as a teeter-totter effect,” Suhm said.
The second reason she cited for the increase greater than the levy was because the village properties saw an increase in equalized value, which is set by the state.
“It’s considered a more equitable valuation of the properties in a municipality because the state reviews and adjusts this on an annual basis,” she said. “It’s often referred to as the ‘fair market value’ on your tax bill.”
Suhm said the village’s equalized value increased by approximately 6 percent in 2017, more than $22 million.
“Based on my conversation with the Department of Revenue – Milwaukee Equalization District Office, this is due largely to economic adjustments, meaning the market has picked up,” she said. “I think anybody who has been watching real estate can say for certain we have seen an increase in values and activity in recent years.”
Suhm explained the equalized value is used to distribute the levy of jurisdictions that span multiple municipalities because it is a more equitable method than using assessed value.
Since the village’s equalized value went up more than the other municipalities in the area, the village’s share was greater, Suhm said.
Suhm told the Village Board she was going to be sending out a letter with the tax bill to explain what happened this year in the hope it would help with the residents’ questions.
She also pointed out that the village’s share of the total tax bill was only a small portion of the bill and much of what happened in this year’s “adjustment” was simply beyond the village’s control.
“The important thing that our taxpayers realize is there are many factors that contribute to calculating a tax bill and tax rate,” she said in the follow up interview. “Unfortunately, the majority of the increase they will see on their 2017 tax bills are due to factors that were beyond our or other taxing jurisdictions’ control.
“While I am ecstatic to see our market recovering and that our equalized value has surpassed our highest level in 2009 by approximately $1.6 million, a significant jump in one year can be a double-edged sword.”
Suhm said anyone who would like more information on the process should visit the Wisconsin Department of Revenue website, www.revenue.wi.gov, and search for the 2017 Guide for Property Owners.
The 2018 Village of East Troy budget is available online at www.easttroywi.gov, along with the presentation from the Nov. 6 Village Board meeting – go to Village Government, Agendas, Packets and Minutes and select budget to view the budget document or packets to find the presentation.
Anyone with specific questions about the budget or tax bills, can call Suhm at 262-642-5482.
