A Message from the President with Mike Theo: Homeowners Make Better Lovers

 Mike Theo  |    August 01, 2012

Okay, now that I have your attention, I admit I don’t have quantitative data that proves homeowners make better lovers. However, it’s indisputable that homeowners help make safer neighborhoods, better schools, stronger families and better students as well as better local, state and national economies. 

But homeownership rates in Wisconsin have fallen recently, according to the respected Wisconsin Taxpayers Alliance. Their latest report, called ‚ÄúMeasuring Success ‚Äď Benchmarks for a Competitive Wisconsin 2012,‚ÄĚ says that Wisconsin‚Äôs homeownership rate, which is the percent of total households that own homes, fell to 68.5 percent in 2011, down from 71 percent in 2010. That‚Äôs also a five percent drop from our peak of 73.3 percent back in 2004. While we‚Äôre still better than the U.S. average of 66.1 percent, Wisconsin lags behind most of our upper Midwest neighbors. Homeownership in Michigan is 74.1 percent; Minnesota is 71.34 percent; Iowa is 71.2 percent; and Illinois is 68.4 percent.¬†

What can we do to improve homeownership in Wisconsin? Unfortunately, many of the economic factors that determine whether someone or some family can afford a home are not in our immediate control. Those factors include the mortgage interest rate, the unemployment rate and the consumer confidence rate. But there are some factors that influence the price of a home that we do have some control over. One of those factors that can be controlled is how we tax homeownership, including the real estate transfer tax annual property taxes.

When the Wisconsin legislature commences a new legislative session in January, they should consider reforming Wisconsin’s property tax system as a way of reducing the cost, and thus increasing our rate, of homeownership. Wisconsin is far more reliant on revenues derived from property taxes than most other states, and as a result, the cost of owning a home in Wisconsin is higher than many other states. 

The WRA was a founding partner in the Wisconsin Way project, which was a multi-year effort by a coalition of diverse organizations that produced a far-reaching set of recommendations to revolutionize the way we tax, spend and invest in Wisconsin. The Wisconsin Way partners included the WRA, the statewide teachers union, counties and municipal government representatives, transportation builders and perhaps most importantly, hundreds of citizens who attended numerous town hall meetings held across the state over many months. Among the group’s recommendations were ideas for how to reform property taxes in Wisconsin. 

The recommendations included ideas on both the revenue and expenditure side of the equation. At the risk of being overly brief, some of the ideas included:

  • A goal of permanently cutting property tax revenues by 25 percent by consolidating the management and delivery of many local governmental services, including public safety, human resources, K12 education and infrastructure maintenance.
  • Consolidating appropriate school district administrative functions including school building priorities and regional purchasing of energy, textbooks, paper and technology.
  • Shifting funding of certain services off the property tax to the state general fund using new or existing sales tax revenues and/or user fees for specific services to pay for them.
  • Allow counties to increase the sales tax in exchange for permanent property tax cuts.
  • Restricting property taxes to only property-related services and schools.
  • Review all state mandates on local governments to achieve greater efficiencies and ensure appropriate funding sources.
  • Carefully review, and revise where appropriate, the five major existing property tax relief programs funded by the state.
  • Require all property tax exemptions to be justified and re-codified within 24 months, then reviewed on a staggered basis every five years.

These and many other property tax reform ideas were offered in the context of other major tax reforms, economic growth and development ideas and recommendations for government reforms and modernization. 

A newly elected legislature in January should review these and other property tax reform ideas and adopt proposals that will increase the number of homeowners in Wisconsin and thus increase the social and economic benefits that will result. 

Homeowners may or may not make better lovers, but they do own a piece of the American Dream for which renters still lust.

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