School Information System

Chandler on Business/Residential Property Taxes

Madison Resident Richard Chandler:

There seems to be an orchestrated effort under way to blame high residential property taxes on businesses. This assertion has been made recently by some legislators, a school administrator and local officials who are opposed to a property tax freeze, spending limits, and other efforts to reduce Wisconsin's tax burden by restraining spending.

The argument goes something like this: Over the past 30 years, the share of total property taxes paid by homeowners has risen while the share paid by businesses has dropped. The claim is that this shift is the result of tax exemptions for businesses. While it may serve some political purpose to make this claim, it's not true.

Simply put, the changes in the percentages of property taxes paid by different categories of property over the past three decades are primarily the result of changes in the economy, not tax breaks. During this period, residential property values have increased rapidly in Wisconsin -- and with it the amount of property taxes they pay. What's usually not mentioned is that the share of property taxes paid by commercial property has climbed along with the residential share as we've moved to a more service-oriented economy.