New construction numbers revealing

Net new construction during 2015 totaled $7.0 billion, or 1.4% of the total value of all taxable property in the state. Both figures are the highest since 2007, prior to recession. However, they lag well behind the $12 billion in new construction in 2007, which added 2.8% to property values.net-new-construction-history

 

 

Annually in August, the Department of Revenue releases widely reported equalized property value figures local governments. At the same time, they issue a report on “net new construction” for cities, villages, and towns. This report is more revealing as it details where new development is occurring in the state. Moreover, it helps determine how much local property taxes will rise next year. This year’s report shows the strongest region to be one from Chippewa County south to La Crosse County and east to Juneau. Little new construction is occurring in the north.

New construction varied throughout the state. It averaged more than 2% in Calumet, Dane, Eau Claire, Lafayette, Outagamie, and Trempealeau counties. It was less than 0.5% in Bayfield, Iron, and Price counties. In fact, net new construction was less than 1% in most northern counties.

Wisconsin-counties-nnc-2016

 

These numbers matter for municipalities and counties, as they are used by the state to limit increases in local property taxes.  If new construction is just 0.5% for a city, it can increase its levy by that percentage. That can make budgeting a challenge since property taxes are the largest revenue source for cities and villages, and state aids flat or declining in recent years.

 
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League of Wisconsin Municipalities and WISTAX release “State of Wisconsin’s Cities and Villages”

Since the Great Recession, Wisconsin’s cities and villages have maintained critical services despite no significant increases in local or state revenue.

But challenging times are just around the corner for local road systems, and Wisconsin’s smallest communities are still waiting for the economy to recover fully, according to a new Wisconsin Taxpayers Alliance report commissioned by the League of Wisconsin Municipalities.
The inaugural edition of “The State of Wisconsin’s Cities and Villages” is a combination of data analysis and local government survey information prepared for the League of Wisconsin Municipalities by the Wisconsin Taxpayers Alliance (WISTAX).

A copy of the report can be found on the League’s website.

WISTAX President Todd Berry and League Executive Director Jerry Deschane discussed the report’s findings with WisconsinEye.

The Wheeler Report summarized the report’s major conclusions.

 
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School revenues to rise slightly in 2016-17

A recent release of school aid information by the Department of Public Instruction received much press coverage. The department noted that general school aids are slated to rise $108.1 million next year, resulting in more aid for 61% of the state’s 424 public school districts. However, in the complex world of Wisconsin school finance, the increase in general aid will not mean more money for schools. Instead, they will benefit from a small increase in another aid program.

The general aid increase does not help schools because they are subject to state-imposed revenue limits, which cap the amount they can collect from a combination of general aids and school property taxes. For both the 2015-16 and 2016-17 school years, the state is not allowing any increase in these limits, unless voters approve one via referendum. With the revenue limit unchanged, the increase in general school aids is offset by a reduction in school property taxes; there is no additional money for schools.

However, the state is providing additional funding outside of the revenue limits. The 2011-13 state budget created a per pupil payment that is not subject to the caps. In 2015-16, schools received $150 per student, unchanged from 2013-14. For 2016-17, districts will receive $250 per student, a bump of $100.

With no change in revenue limits and a $100 per student increase in per pupil payments, the average district will see a 0.8% increase in non-federal revenues next year, up from 0% in 2015-16.

 

 
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