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Property values

After getting new information, Madison has revised estimates for the net taxable property value of the city. A decrease in total value means a slightly higher tax rate than anticipated for 2018 and a bump in city taxes for the average single-family home. 

As Madison readies to make final budget decisions, new estimates have decreased the city’s tax base, meaning taxes on the average home will be higher than initially thought.

Mayor Paul Soglin proposed an operating budget in early October, and on Oct. 23 the city’s Finance Committee made amendments and approved a $314.3 million spending plan for next year.

But a lower-than-estimated tax base means the city must raise the tax rate to cover that spending, creating a higher-than-expected hit for the average home.

Based on the Finance Committee’s budget, a second estimated decrease in the tax base in two weeks will result in an $87.78 increase in the city tax bill for the average home over the current year, or about 3.6 percent, for a total bill of $2,505.29 in 2018. That’s $12.08 higher than previously expected.

The average home is valued at $269,377.

Next week, the City Council will consider more amendments and make final budget decisions, which could add or decrease spending and further impact tax bills.

The council could still increase tax collections by about $457,000, or up to about 3.8 percent on the average home, before hitting state-mandated levy limits, city finance director David Schmiedicke said.

In its two revisions on Oct. 24 and Nov. 3, the city decreased net taxable property value by a total $217 million to $24.8 billion. It means overall net taxable value rose a still-healthy 7.2 percent, but not the robust 10.2 percent announced with the initial release of new values in April.

The latest revision happened for several reasons, Schmiedicke said.

  • After considering appeals, the city has been cutting millions of dollars from the assessments of hotels, big apartment buildings and other properties and is now near final values.
  • The reductions in assessments have occurred both within and outside the boundaries of tax incremental financing (TIF) districts. In addition, final manufacturing property values were recently provided by the state. Taken together, the taxable property in the city is slightly lower and the tax rate is slightly higher than estimates made in late October.

Schmiedicke and city assessor Mark Hanson said they can’t recall ever seeing such significant revisions. “It’s been kind of a moving target this year, more than usual,” Hanson said.

Soglin, who had initially hoped for no more than a 2.8 percent tax increase for the average home, could not be reached for comment.

In April, when new assessments were announced, the city delivered significant spikes in value for hotels and big apartments, which the assessor’s office said were far undervalued.

But a high number of hotel and big apartment owners appealed the assessments, and after receiving new information, the city cut tens of millions of dollars in value from those properties.

In all, 30 hotels challenged their 2017 assessments — triple the highest number in the past decade — and the city’s Board of Assessors followed staff recommendations and reduced assessments for 26 of the 30 hotels.

After the changes, 24 hotels still had assessments above 2016 values and six smaller hotels have values now lower than the previous year. On the bottom line, the Board of Assessors reduced initial assessments for the hotels a total of $161.5 million, though the impact on the budget is lower because some hotels are in TIF districts. The 30 properties’ total value was still up $104.7 million from 2016.

Last month, the Board of Assessors reduced assessments for 24 apartment buildings valued at more than $1 million, including some sizable cuts for four properties initially valued at more than $30 million.

Initially, city assessors had to make assumptions on hotel and big apartment values, but appeals brought actual financial information and revisions were made, Hanson said.

“Next year, it will be more of a normal year,” he said. “We won’t have these big swings in value.”


Dean Mosiman covers Madison city government for the Wisconsin State Journal.