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By Dave Umhoefer July 18, 2011

Gov. Scott Walker says average property tax payer will save $700 under 2011-’13 state budget

Trying to put the divisive fight over collective bargaining behind him, Gov. Scott Walker is framing his budget battle as a victory for Wisconsin’s property tax payers.

In a July 7, 2011 news release and column, Walker said a 60-year-old custodian told him a $500 property tax increase he experienced in 2010 will mess up his coming retirement.

Walker said the man, who was not identified, told him, "I will have to find a part-time job just to live normally."

The governor continued: "Under our budget, the average property taxpayer will save $700. It is my hope that savings like this will help keep more people like that custodian safely in their homes."

That claim of $700 savings caught our eye.

Walker’s budget featured tight property tax caps -- caps that fulfilled a campaign promise, and would rein in growth. But there was no talk of a big reduction in property taxes.

Walker spokesman Cullen Werwie said Walker did not mean to suggest people would see a real-dollar tax cut of $700 over their previous bill.

Rather, Werwie said, Walker means they would pay $700 less over the two-year (2011-’13) budget compared with what they would have without Walker’s moves.

At best, that’s highly confusing.

Especially since Walker juxtaposes the "$700 savings" claim with the story of one person’s bill going up $500 the year before. In other spots where we found Walker using the $700 figure we found a similar lack of context.

But under either approach, there are problems with Walker’s claim.

A bit of background first.

For years, the state has imposed property tax limits on local governments and school districts, resulting in a slowing of tax growth that somewhat reduced Wisconsin’s high national ranking on property tax burden.

Ultimately, in the two-year budget signed in June, Walker won support for much tighter property-tax controls -- even a virtual freeze on municipal levies.

The tight levy limits were important to lead to property tax relief. Walker’s budget included large aid cuts to school districts and local units of government. If those officials didn’t -- or couldn’t based on in-place union contracts -- use tools to make employees pay more for pensions and health care, they could have raised property taxes to cover the difference.

To back up the governor’s statement, Werwie pointed us to one page in a Department of Administration budget document from March 2011. It was part of Walker’s budget proposal.

The page shows a chart estimating the property taxes on a median-valued home for the next two years under Walker’s budget, compared to what they might have been under a different scenario.

"The typical taxpayer will save a total of $736 over the biennium," the chart notes.

So that’s where the governor gets the $700 figure.

Let’s take a closer look at the two scenarios Walker is comparing in order to make his savings claim.

The department, which constructs the state budget, provided us the assumptions behind the chart.

The problem was immediately obvious -- the chart, while useful in one respect, doesn’t offer a clean "old way" vs. "new way" comparison that Walker would have needed to make the claim he did.

To get that, you could compare what property taxes might have been under the old aid levels and a continuation of the Doyle-era tax limits -- vs. the estimated taxes under Walker-proposed limits and aid cuts.

That’s old vs. new.

Instead, on the "old" (pre-Walker) side of the equation, the chart inserts one of Walker’s own key proposals -- the big aid cut to local governments and schools.

That has the effect of pushing up the property tax hike that "might have been" -- in part because it assumed that schools and local governments would almost tax to the maximum allowed to replace the lost aid.

That makes the "savings" projection bigger.

The chart is not wrong. It’s a useful cautionary illustration for lawmakers deciding how strong the levy limits needed to be to avoid big property tax increases in light of Walker’s school aid cut plans.

But its conclusion can’t be used to make the kind of claim Walker makes.

No such analysis has been published yet, based on what we heard from tax experts.

To sum up, Walker claimed the 2011-’13 state budget will "save" the average homeowner $700 over two years.

If he meant a $700 tax cut compared to the past bills, that’s not in the cards at all. The state’s nonpartisan Legislative Fiscal Bureau projects the typical homeowner would see a $55 increase in two years compared with 2010.

And even if he meant $700 less of an increase, his assertion is not based on an apples-to-apples comparison of his budget vs. the old law. The real figure is not yet known, but we do know that the approach Walker cited was designed in a way that puffs up the "savings."

The claim, with its shorthand presentation, rates as False.

Our Sources

Governor Scott Walker, press release and column, July 7, 2010

Greenfield Patch, guest column by Scott Walker, July 9, 2011

Wisconsin Department of Administration, budget in brief chart, (page 52) March 2011

Wisconsin Legislative Fiscal Bureau, Property Tax Estimates, July 5, 2011

Interview with Fred Ammerman, program supervisor, Transportation and Property Tax Relief section, Wisconsin Legislative Fiscal Bureau, July 12-13, 2011

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Gov. Scott Walker says average property tax payer will save $700 under 2011-’13 state budget

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