Transparency versus stability

Berry said although the state-imposed levy limits are intended to force towns, villages, cities and counties to hold the line on property taxes, they actually encourage the opposite.

Each year’s levy establishes a new baseline under the law. So if local governments don’t take the maximum increase allowed, they lose most of that unused capacity in the following year. That creates a perverse incentive to “use it or lose it.”

Berry called the Sauk County committee’s maneuver a budget “trick” that is legal, but not exactly transparent or ideal behavior.

“One cannot call it transparent in a way that promotes public understanding of county financial practices,” Berry said, adding that state lawmakers are guilty of much larger budget trickery.

Although there are certain exceptions, the state law generally limits levy increases to the percentage growth in equalized value from net new construction during the prior year.

For example, if a county’s net new construction was 4 percent, the property tax levy may be increased by no more than 4 percent. If no new construction occurred, taxes cannot be raised.