Coggs Responds  |   Home  |   Spinning the Porkulus

Sherman Wants to Amend Uniformity Clause

This is a bad idea. 

Madison – Rep. Gary E. Sherman (D-Port Wing) reintroduced legislation last week to address the rising property tax burden on Wisconsin homeowners.

Under the State Constitution, taxation systems like that in place in Minnesota, which protect homeowners from rapidly escalating property values, are forbidden. A provision called the Uniformity Clause bars treating some classes of land differently from others.

“It seems that every special interest group in Wisconsin has found a way around the Uniformity Clause, while homeowners have been left bearing the largest burden of property taxation,” Sherman said. “It is time that those who are struggling to hang onto their homes were given the support that they deserve.”

Sherman’s proposal, AJR 8, would amend the Constitution so that it becomes possible to target property tax relief directly to homeowners. Constitutional amendments require passage through both houses of the legislature in identical form in two successive sessions and then passage in a statewide referendum.

Here’s a good refresher on the Uniformity Clause if you aren’t familiar with it.  Basically, it requires that taxation be levied uniformly.  The government can’t impose different levels of taxation for different kinds of property.  They can make a class of property exempt, but if it is taxed then it must be done at the same level as everyone else.  There are a few exceptions, but that’s the meat of it. 

It’s a bad idea to gut the uniformity clause because it would make the property tax ripe for abuse.  There have been proposals in the past to do things like give senior citizens a lower property tax rate or exempt the first few thousand dollars of a primary residence.  While these may sound like good ideas, politicians have a way of using the tax code to reward and punish people.  I could easily see such latitude being abused. 

For example, Democrats might want homes over $400,000 or secondary homes to pay a higher property tax rate.  After all, those property owners must be rich, right?  Or perhaps Republicans would want to make people in high crime neighborhoods pay a higher property tax rate because the cost of police services is higher in those neighborhoods.  Maybe it would be a good idea to grant people who vote a discount on their property taxes because as a way to encourage voter turnout.  The possibilities are endless and politicians have a knack for screwing things like this up.  Exhibit A: the federal income tax code. 

While perhaps well-intentioned, gutting the uniformity clause would leave the door open for rampant abuse and sets Wisconsinites up for an even more complex and unfair tax system.

Posted by Owen at 1946 hrs
Politics + Politics - Wisconsin

1. I’m sure that you’re aware that property tax breaks are one of the primary ways that other states have lured manufacturing-intensive businesses out of Wisconsin.  The existence of the uniformity clause creates a big problem when it comes to putting together incentive packages for businesses that might receive overtures from other states when they need to expand facilities.

   Local governments in Wisconsin have few tools they can use to aggressively target business because the property tax is for all intents and purposes their own method of revenue collection.  The uniformity clause prevents government from taxing certain classes of property more, but it also prevents government from taxing certain properties less.

   Besides that, the Legislature and Governor Thompson basically destroyed the uniformity clause anyway when they created use-value assessment, a total giveaway to farmers.  A system in which certain classes of land are taxed based on what you intend to do with the land?  Nice.  When I used to get phone calls from angry homeowners in rural communities wondering why their property taxes have tripled in five years, I never hesitated to point that out.  Farmers screwed hundreds of thousands of homeowners on that one.

   Perhaps there would be merit in allowing differential tax rates for broad classes of property - primary residences, secondary residences, agricultural and commercial property, for instance.  Lots of states do that already without any real controversy.  But as you said, it’s important to avoid situations where politicians are constantly tinkering with little details.

   Posted by Recess Supervisor on February 09, 2009 at 2250 hrs
   
   
   

2. I agree completely, and I also agree that use-value has hurt homeowners in Wisconsin.  The uniformity clause keeps us from implementing something like Florida’s “Save our Homes” or California’s Prop 13 where new entrants to the state pay more than people who’ve owned a home there for decades and neighbors can pay vastly different property taxes for similar houses.  I’ve always thought that property taxes should be based on the value of the property - not how long you’ve owned the house, what you do there, or anything else.

   Posted by .(JavaScript must be enabled to view this email address) on February 10, 2009 at 2303 hrs
   
   
   

Commenting is not available in this channel entry.