Dan Rossmiller: What is going on with property taxes?

The column below reflects the views of the author, and these opinions are neither endorsed nor supported by WisOpinion.com.

If you are like me, you may have received a bit of “sticker shock” when you received your property tax bill this year. Why did property taxes increase so much? The answer is not a simple one, as many factors produced the number on your bill. Maybe your first instinct was to blame your school district, but did you know that most of these factors are outside of the authority of your local school board?

Decisions made at the state level

1. No general state school aid increase

School district spending is controlled by state-imposed revenue limits. Schools collect revenue through a mix of general state aid and property taxes, but they must stay within these limits. A school district can only exceed its state-imposed revenue limit if voters pass a referendum approving additional spending.

Since the 2023-24 school year, revenue limits have increased each year by $325 per student. While initially agreed upon by Gov. Tony Evers and the state Legislature for the 2023-24 and 2024-25 school years, it was extended to this school year (and the next 400) as a result of a controversial line-item veto by Gov. Evers that was later upheld by the state Supreme Court. For context, it is relevant to note that this annual increase is less than the rate of inflation.

Ordinarily, the state provides additional school aid when it adjusts revenue limits upward. It does so to hold property taxes down. If a school district doesn’t get enough additional state aid to meet its revenue limit adjustment, local property taxes cover the difference. That is one reason property taxes increased.

The 2025-27 state budget passed by the Legislature and signed by Gov. Evers included no general school aid increase, unlike the previous two years. This means the entire cost of this year’s $325 per student revenue limit increase was shifted to property taxpayers. There was no new state money to narrow the gap. In fact, 71% of school districts actually saw their state general aid go down this year. Some of this is the result of changes in property values as well as the passage of local referenda in many districts. Nevertheless, the lack of an increase in state general aid no doubt played a major role in such a high number of districts losing aid relative to last year.

In short, the state allowed districts to raise and spend more revenue but didn’t fund that increase. As a result, that spending showed up directly on local property tax bills this year.

State policymakers were aware of the consequences (higher property taxes) of this decision but approved the budget in a bipartisan manner anyways. The political parties now point their fingers at each other, and schools are forced to deal with the fallout.

2. Almost two decades of lagging inflation

You may have heard about a “historic” increase in special education aid—the largest in decades (but still reimbursing about 20% less than in the 1980s). However, it comes alongside 17 straight years of revenue limit adjustments that failed to keep up with inflation. Revenue limits have not even covered the cost of maintaining existing services, and the latest budget shifts a heavier burden onto already-stretched property taxpayers.

As a result, while a welcome investment, this “historic” moment is muted at best. In part, that is because special education funding has no direct impact on property taxes. It is paid to districts outside the revenue limit as a reimbursement for special education expenses incurred in the previous school year. It is also because, in recent weeks, we have learned that the percentage of special education costs reimbursed by the aid increase will be several points lower than was assumed when the budget was passed. This means school districts must continue to transfer money from their general budgets, which are covered by the revenue limit, to pay for unreimbursed special education costs, which are not.

Just as your costs go up as a private citizen, schools are not immune to these realities. Even without adding new programs, districts are facing significant cost increases for staff salaries, insurance, utilities, transportation and more.

3. School referenda at record highs

The only way for a school board to raise additional revenue above its state-determined revenue limit (to meet challenges such as inflation) is to go to a referendum where their local taxpayers vote whether to increase their own school property taxes. The number of districts going to referendum and the amounts approved by voters have increased substantially in the past decade.

This is not a coincidence. It is another symptom of the state not providing revenue increases that match the rising costs of goods and services, and districts having to go to their voters for additional resources.

Some might ask: If there are fewer kids in the state, why are schools seeking more money through referendums? While it’s true most schools are seeing declining enrollment, this “loss” of students happens gradually, with a few students leaving one year and a couple more the next. It takes several years of declining student populations before cost-saving measures, such as cutting staff or consolidating school buildings, can be implemented. During that time, the rising costs mentioned above have not decreased.

4. A declining share of state revenues allocated to schools

According to annual fiscal reports from the Wisconsin Department of Administration, the share of state budget revenue going to schools in 2003 was 43.1%. By 2023, that share had fallen to 36.6%. Similarly, Wisconsin Policy Forum reports have found comparable declines in per-pupil school spending compared to other states and as a percentage of income.

5. Private school vouchers

It should also be noted that growth in private school vouchers—publicly funded private school enrollment—also contributed to the property tax increase on bills statewide. The state funds payments to private schools participating in the statewide and Racine voucher programs by deducting state aid from the districts in which those voucher pupils reside. Those districts are then allowed to increase their property taxes by an amount not exceeding the state aid withheld from them. In part, because the state budget raised the amount paid per student voucher, the impact of these voucher programs on property taxes grew by 15% this year, adding nearly $47 million to statewide property taxes.

6. Property value assessments

It’s a common misconception that higher property taxes always mean schools are spending more. Individual tax bills depend heavily on local property assessments. Shifts in your assessment and/or that of the municipality in which your property is located may not reflect what is happening in the local school district. The mix of local assessments, state aid and the allowable levy determine individual tax bills—not school spending alone.

While state decisions are contributing to increasing property taxes for the average taxpayer, a specific taxpayer’s school share of local property taxes may increase, or not, regardless of a school board’s decisions on utilizing the $325 per pupil increase or even passing operating referenda.

Ultimately, the school portion of your property tax bill is determined by a balance of several factors that are largely outside the control of your local school board. School spending is only one part of this equation and is not always the primary driver of tax changes. Please keep these factors in mind when reviewing your property tax bill.

Dan Rossmiller is executive director of the Wisconsin Association of School Boards (WASB).