Property Tax Bills Soaring for Many, Due Mainly to Inflation 

Property tax bills are arriving in mailboxes this week throughout Waukesha County and hitting many residents with a big dose of sticker shock. A report from the Wisconsin Policy Forum stated, “The recent state budget delivered historic aid increases to municipalities and counties, yet this December’s gross property tax bills will climb by the largest amount since the Great Recession.”

According to the Forum’s report, the average property tax increase across the state is predicted to be +4.7 percent, the largest increase since 2007. According to the Legislative Fiscal Bureau, the average state-wide tax levy increases are across the board, including: 

• Counties: +2.6%
• School Districts: +5.4%
• Technical colleges: +4.9%
• Municipalities: +3.4% 
• Tax incremental districts: +13.6% in municipalities where they exist

The impact of inflation is clear, with the average home value in Waukesha County now $425,295, according to Zillow. This is an increase of 7.1 percent from a year ago. Add this to the tax rate increases, and it’s a toxic brew for homeowner’s budgets. Anecdotal reports from individuals and business property owners who have received their tax bills this week indicate that many of us are seeing net increases of over 20 percent in Waukesha County. 

Much of the increase in tax levies for municipalities and schools is also driven by inflation, as the cost of goods and services is still rising (although at a slower rate than the past few years). The cost of talent is also a key driver, up 8 percent on average, as organizations have had to increase salaries to recruit and retain their workers over the past several years.

The Forum’s report encourages us to look at the bright side, as it could have been worse if not for increases in the state school tax credit and lottery tax credit, which lowered our net tax totals. The report explained, “The 2023-25 state budget increases the school levy tax credit by $255 million, or 27%, on this December’s levies. The budget will also increase the state lottery credit by $15.9 million over what it otherwise would have been, producing a similar effect. These provisions will help hold the statewide property tax increase much closer to those seen in the years preceding the pandemic – likely about 2% to 3% – while allowing a healthy increase in local revenues.”

Although most property owners pay their property taxes by December 31 in order to get the biggest deduction possible for their income taxes, some may not be able to handle it this year. Fortunately, property tax payments can be spread out in installments, with the final payment due May 31, 2024.