Wisconsin property values are up. What does that mean for Ripon and Green Lake?
A new data tool from the nonpartisan Wisconsin Policy Forum found that Wisconsin property values grew by a record 13.8% this year — the largest increase since the 1980s.
In 2022, statewide residential property values increased 14.9%, the largest jump since 1985, while commercial property also saw record growth at 13.2%.
Wisconsin Policy Forum Communications Director/Researcher Mark Sommerhauser attributed the growth in residential property values to what’s been going on in the housing market since the start of the COVID-19 pandemic and a lack of new construction.
The pandemic enabled more people to work from home, which caused some to desire more space, and drove up demand for housing, Sommerhauser said.
While demand for housing increased, Wisconsin — like much of the country — has lagged in new home construction since the great recession, he noted.
“It didn’t really pick up again for quite a while after that and, even when it did, it didn’t reach the levels that it was at prior to the great recession,” Sommerhauser said. “We’ve basically had more than a decade in which — historically speaking — a pretty small number of new homes were being built in Wisconsin.”
The lack of new housing, combined with a renewed demand for housing, has helped raise home prices and driven the increase in residential property value.
“It’s sort of economics 101,” Sommerhauser said. “When you have less supply of anything and the demand is constant or goes up, you’re going to see prices increase. That’s what we’ve seen with residential property value.”
The cause for the increase in commercial property value isn’t quite as easy to nail down as some parts of the state saw a decrease in commercial property value last year, Sommerhauser noted.
“We felt like that at the time was probably a reflection of, obviously, the pandemic with fewer people either working in offices or going out to bars and restaurants or to shop out in a public space,” he said. “I think part of that [increase in 2022] had to do with the reopening and the resumption of normal economic activity over the last year.”
At the same time, property tax levies by municipalities for 2022 budgets only grew by 1.6% statewide, which is less than the rate of inflation and is the smallest increase since 2014.
While property value growth far exceeded the tax levy growth, property tax rates continued their long-running decline, according to the Wisconsin Policy Forum.
Wisconsin’s gross property tax rate decreased by 4.9% over the same period, which was the largest drop since 2005 and the eighth straight year in which the rate declined.
Ripon saw similar trends in its property tax rates last year, both at the city and school district levels.
From 2021 to 2022, the city of Ripon’s tax rate fell from $8.73 to $8.53, while the school district’s tax rate fell from $8.95 to $8.27.
In Green Lake, both the city and the school district tax rates remained the same at $5.50 and $4.99, respectively.
Wisconsin Policy Forum’s data tool provided property value data for all of Wisconsin’s 72 counties and 1,850 cities, villages and towns, including the cities of Ripon and Green Lake.
After the city of Ripon’s total equalized property value (the estimated value of all taxable property) dropped by 2.5% from $507,867,000 in 2020 to $495,132,100 in 2021, its property values rebounded.
The city of Ripon’s 2022 total equalized property value was $522,084,300, up 5.4% from 2021, according to Wisconsin Policy Forum.
Meanwhile, the city of Green Lake’s total equalized property values had a small 1.1% increase from $258,072,500 in 2020 to $260,941,100 in 2021.
It’s in for a much larger increase in 2022.
The city of Green Lake’s total equalized property value increased by 22.4% in 2022, raising it to $319,458,700.
What this means for you:
Although property values are rising, the trend of tax levy increases not matching inflation could cause trouble for local governments.
Sommerhauser said Wisconsin tax levy limits have been in place since 2006, which has tightly restricted the ability to raise property taxes to the rate of net new construction.
When the limits were enacted, Wisconsin was experiencing a lot of new construction, he noted. When the Great Recession hit, a lot of that construction slowed.
“In the wake of the Great Recession, I think a lot of elected officials were sensitive to that, and really didn’t want to increase taxes, certainly more than they felt was necessary.” Sommerhauser said.
Until 2022, local governments, as well as consumers and businesses, were experiencing relatively low inflation.
With the “enormous uptick in inflation,” the levy limits are proving to be more challenging for local governments, Sommerhauser noted.
“That kind of threatens to bring this situation to a head for a lot of municipalities because some of them could make do with small levy increases when inflation was 2% or 3% in many of these previous years,” he said. “But when it’s in the 7% to 8% range, you end up with a scenario where the buying power of these levy dollars, in real terms, is declining pretty markedly.
“It definitely threatens their ability to provide the basic services that people expect out of a municipality.”
For property taxpayers, meanwhile, the increase in property values could offset decreases in the tax rate.
“Although tax rates went down in the vast majority of municipalities, that does not necessarily mean that people’s bills will go down,” Sommerhauser said. “It does depend on what your municipality, school district, county, etc. did with their levies and what happened with the value of your property.
“There will still be some people who see a modest increase, even with rates going down, if their properties did increase significantly in value. That can be an issue, especially for people who are on a fixed income, people who are elderly or people that just have disabilities or other things that kind of limit their ability to go out and earn an income and be able to pay property taxes.”
How to submit:
If you have a question, the Commonwealth wants to give you an answer. Send a question, name and contact information to:
Mail: 303 Watson St., Ripon WI 54971, P.O. Box 262, Ripon WI 54971