Milwaukee Mayor Tom Barrett "has held the line on property taxes."
Barack Obama on Monday, August 16th, 2010 in a speech at a campaign fund-raiser for Tom Barrett's gubernatorial campaign
Obama says Tom Barrett "has held the line on property taxes"
President Barack Obama, in Milwaukee on Aug. 16 to attend a fund-raising luncheon for Tom Barrett’s gubernatorial campaign, praised the Milwaukee mayor for intervening in a domestic dispute outside of State Fair Park last year - and cast his fellow Democrat as something of a hero to taxpayers, saying in his remarks:
"Under his watch, this city has held the line on property taxes, it’s expanded opportunity, it’s put more cops on the street and reduced crime as a result."
The part about property taxes caught our attention. Barrett isn’t widely regarded as a tax hawk -- at least not in comparison with Scott Walker and Mark Neumann, the Republican candidates for governor.
"Held the line," of course, may mean one thing in the eye of the holder and another in the eye of the beholder, so let’s take a look.
We’ll start with a definition.
To hold the line, according to Merriam-Webster’s definition, is to "maintain the current position or situation."
So, if you don’t increase property taxes at all, that certainly fits. Or if an increase is within inflation -- and does not come with any hidden costs -- that may fill the bill as well.
When we asked the White House to elaborate on Obama’s "held the line" comment, a spokesman referred us to the Democratic National Committee. The DNC e-mailed PolitiFact Wisconsin a statement that made four points.
One point spoke of why Barrett raised the levy -- the total amount of property taxes collected -- and another told how he has worked to cut pension costs. Neither of these points addresses how much property taxes have risen under Barrett.
The DNC’s other two assertions were more on point - but not very persuasive:
First, in Barrett’s six years in office, the DNC said, property taxes have risen less than inflation in three of those years.
Even that part of the DNC statement was confusing and included an error. It used "taxes" and "tax rates" interchangeably, when DNC spokesman Derrick Plummer later told PolitiFact Wisconsin it should have said "tax levy." Additionally, Plummer said the increase was below inflation in two years and near inflation in a third.
So, the levy increase was higher than inflation in four of six years.
Second, Barrett’s proposed levies, the DNC said, were higher than the levies ultimately adopted by the Common Council in four of the six years -- but less than 1 percent higher.
That sounds like the council, not the mayor, was more closely watching the bottom line. Moreover, highlighting the difference between the executive and legislative branches says nothing about how high taxes actually went up.
Beyond that, revenue collected from fees has more than doubled under Barrett. That means property owners are paying higher fees -- for services that used to be covered by property taxes -- as well as higher property taxes.
The newest fee -- for storm water management -- was created under Barrett; he proposed it and the Common Council approved it in 2006. When you add revenue from the storm water fee to revenue from the three other major fees -- for solid waste disposal, snow and ice removal, and sewer -- the fee collection total is projected to hit $89.6 million in 2010 -- more than double the $40.1 million that was collected when Barrett took office in 2004.
Shifting the cost of a city service from the property tax to a fee does spread that cost among more payers; for example, nonprofit organizations that don’t pay property taxes do pay fees. But, the bottom line is that the city is now collecting nearly $50 million per year more in fees under Barrett for services that used to be provided through the property tax levy.
So, let’s re-focus strictly on property taxes.
We’ll use 2004 as the base line. That was the year Barrett was elected mayor and the year that the tax levy was approved for his first budget, in 2005.
Starting with the levy for 2004 of $199,012,386, the levy increased 2 percent for 2005; 4.96 percent for 2006; 3.3 percent for 2007; 3.25 percent for 2008; 4.29 percent for 2009; and 4.12 percent for 2010, when the levy is to hit $246,754,533.
The six annual increases total 21.92 percent, which means levy increases under Barrett have averaged 3.65 percent per year.
The figure led Dale Knapp, research director of the Wisconsin Taxpayers Alliance, a research organization in Madison, to disagree with Obama’s characterization of Barrett’s record on property taxes.
"I’m not sure if I would call that holding the line on taxes," Knapp said. "They’re (the levies) not growing outlandishly, but then again, they’re not flat or growing at a couple percent either. They seem to be generally very average."
Surprisingly, perhaps, Michael Birkley, an advocate for lower property taxes, agreed with Obama’s take on Barrett.
Birkley is legislative director of Madison-based Wisconsin Property Taxpayers, a group not as well known as the Wisconsin Taxpayers Alliance. WPT says it works "to reduce the statewide property tax burden and reform Wisconsin’s antiquated and regressive property tax system."
"Held the line? You bet he did," Birkley said of Barrett.
In his estimation, that means not holding growth below inflation, but using a combination of inflation and an allowance for new construction growth in the city. That was the formula set out under Gov. Jim Doyle and the Legislature in the years the state put a cap on property tax growth.
The U.S. Bureau of Labor Statistics calculates the CPI-U -- the consumer price index for urban consumers. Its figures for the Milwaukee-Racine area show an average increase of 2.48 percent per year from 2004 to through the first half of 2010. Meanwhile, figures from the City of Milwaukee assessor’s office show growth from new construction averaged 1.91 percent per year from 2004 through 2010.
Together, the two figures tally an average growth of 4.39 percent. That’s more than the 3.65 percent average increase in the property taxes collected.
In his assessment, Birkley said he is not including the shift to fees:
"Our concern is the property tax," he said.
That’s fine. But to the average resident, it’s money from a different pocket. Had the revenue from fees remained on the levy, property taxes would have risen an average of 5.87 percent per year during Barrett’s six years, well above the 4.39 percent increase in inflation plus new growth.
So, how does all of this shake out?
Property taxes may not have not shot up under Barrett; the increases in levies have been kept below inflation plus new growth in the city. But in some years the city was limited by state-imposed caps on how much property taxes could be increased. And, in some years, the property tax levy was lower than the mayor proposed once the Common Council finished its work.
President Obama’s statement ignores the shift of items from the property tax to fees, with total revenue collected from the four main fees more than doubling under Barrett. So city property owners are hit with that increase, on top of the higher property taxes. We rate the president’s remark Barely True.
Editor's note: This statement was rated Barely True when it was published. On July 27, 2011, we changed the name for the rating to Mostly False.
Published: Friday, September 3rd, 2010 at 11:30 a.m.
The White House, Remarks by the President at Luncheon for Mayor Tom Barrett, Aug. 16, 2010
Democratic National Committee, Tom Barrett has Held the Line on Property Taxes, e-mailed to PolitiFact Wisconsin, Aug. 17, 2010. Follow up interview, Democratic National Committee regional press secretary Derrick Plummer
Telephone and e-mail interviews, Wisconsin Taxpayers Alliance research director Dale Knapp, Aug. 17, Aug. 19 and Aug. 23, 2010
Telephone and e-mail interviews, Wisconsin Property Taxpayers Inc. legislative director Michael Birkley, Aug. 18 and Aug. 19, 2010
Telephone and e-mail interviews, City of Milwaukee Budget Director Mark Nicolini, Aug. 20, Aug. 23 and Aug. 24, 2010
City of Milwaukee, Levies, Budgets, Valuations and Shared Revenue 1998-2009
City of Milwaukee, 2010 Plan and Budget Summary(page 17 of plan/page 34 of pdf)
City of Milwaukee, City of Milwaukee Municipal Service Fees: Annual Revenues
Telephone and e-mail interviews, City of Milwaukee Assessor Mary Reavey, Aug. 23 and Aug. 24, 2010
U.S. Bureau of Labor Statistics, Consumer Price Index for Urban Consumers, Milwaukee-Racine, U.S. Bureau of Labor Statistics
Meriam-Webster dictionary, definition of hold the line
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