Property-Tax Revenue Collections versus Net New Construction

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Since 2005, Wisconsin has used net new construction within a municipality to cap property levy tax increases.

Advocates say the strategy helps keep a lid on property taxes. Opponents say low-growth municipalities are unfairly penalized. The cap may also cause some municipalities to take on more long-term debt to fund services, which is generally exempt from levy limit restrictions.

Another aspect that makes the formula troublesome for some is a town’s ability to override the cap. A town with a population of fewer than 3,000 people – which applies to all 14 of Door County’s towns – may increase its levy beyond the allowable limit if town residents approve the move. Given that town residents must vote to approve the budget every year, asking for permission to increase the levy is a common practice for towns. 

Cities, villages and counties can also override the limit, but only by referendum. 

The table below shows the percentage change in revenue collected from municipalities in 2021 over 2020, versus the municipality’s net new construction for 2020, upon which the levy cap is based. Note that the difference between the two for any given municipality is because of the numerous adjustments that may reduce or increase its allowable levy. Revenue needed to pay the municipality’s debt, for example, is not subject to the levy limit. 

Start a conversation: Why did property-tax collections grow or decrease in your municipality this year over 2020? How did that affect your 2021 property taxes or the services provided by the municipality?