A Wisconsin Department of Revenue report released on Friday shows that total property values in Wisconsin fell about 0.5 percent between January 1, 2008 and January 1, 2009. According to the department’s historical data, the $2.5 billion reduction is only the second decrease in total property values statewide in the last 50 years.
The value of residential property fell by 1.3 percent. A DOR press release notes that its figures are “in line with estimates from the Federal Housing Finance Agency (FHFA), which reported that Wisconsin’s existing home values were nearly stable from 1st quarter 2008 to 1st quarter 2009, declining only 0.9%.” The department contrasted that Wisconsin figure with the trend in valuations nationally, which it says “dropped by an average of 7.1%.”
Manufacturing property also dropped by 1.3 percent, but the value of agricultural property grew by 1.6 percent, or $36 million, and commercial property grew by almost $2.2 billion, or 2.4 percent.
DOR also released a report on net new construction. On a statewide basis, new construction increased property values by a net of more than $6.6 billion, or 1.3 percent, but that increase was more than offset by declining property valuations.
Among Wisconsin’s 29 largest cities, Milwaukee had the largest percentage decline in property values – almost 3.1 percent – which represents a loss in property tax base of nearly $1 billion. The largest county declines were in the two counties across the river from the Twin Cities: 5.9 percent in Pierce County and 5.4 percent in St. Croix County. On the other side of the state, Milwaukee County property values declined by 2 percent, but Manitowoc County had a 4.6 percent increase.
The differences between various communities highlight the importance of the state’s equalization aid formulas. Unfortunately, much of the equalization aid has been frozen for many years or cut, which hinders the ability of those formulas to help cushion revenue losses in the communities that have been the hardest hit.
