In 2016, state government spent more than $9.8 billion, or 40% of state taxes and fees, on property tax relief. The spending was in the form of aid to local governments, property tax credits, and selected income tax credits. In addition, it imposed strict property tax limits on local governments. Despite the effort, Wisconsin’s property tax burden ranks 11th among the states.
In Wisconsin and in 26 other states— particularly in New England—the majority of government services are provided by local governments.
Where Wisconsin differs from nearly all these states is how it pays for these services. Here, the combination of state aid and local property taxes account for 78% of local revenues. In only two of the other 26 states—New Hampshire and New Jersey—is that percentage higher.
Part of the reason is that Wisconsin has few local taxes other than the property tax. That is unusual for a state that delivers many services locally and helps explain why our property tax burden is 11th highest of the 50 states (Census Bureau, 2014).
Surveys consistently show the property tax to be the least popular tax in Wisconsin. That, together with the relatively heavy burden, helps explain why politicians of both major parties have long run on property-tax relief plans.
Lawmakers have tried to reduce property taxes in a variety of ways. State aid to local governments is the lead approach. However, credits shown on December property tax bills are the most visible form of relief.
In addition, the state imposes tax limits on schools and local governments. It also provides several income tax credits designed to reduce property tax burdens for specific taxpayers.
Among tax researchers and analysts, debate over the effectiveness of these policies is widespread. That issue will not be settled here. However, each of the main forms of relief are analyzed, beginning with state aid. First, though, Wisconsin’s property tax during the post-war years is examined.