1 UNITED STATES - June 2017 HOW BIG BOX STORES SHIFT THEIR PROPERTY TAXES ONTO HOMEOWNERS... 2 WASHINGTON -BIGGEST EDUCATION REFORM IN STATE HISTORY WILL RELY HEAVILY ON PROPERTY TAXES... 3 TEXAS LEGISLATURE TO REVISIT PROPERTY TAX REFORM IN SPECIAL SESSION... 4 NEVADA GETS $26.2M IN FEDERAL PROPERTY TAX COMPENSATION... 6 INDIANA - INDIANA LIKELY TO END UP IN COURTS OVER ONLINE SALES TAX... 7 ILLINOIS - ABOLISH PROPERTY TAX EXEMPTIONS FOR RICH NONPROFITS... 8 ALASKA COMMUNITIES TO RECEIVE MILLIONS IN PAYMENTS IN LIEU OF TAXES... 9 NORTH DAKOTA - PROPERTY TAX FACTS FROM LOCAL REPRESENTATIVES ILLINOIS - OUTSIDER TO REVIEW COOK COUNTY ASSESSMENT PROCESS WISCONSIN - MONONA WALMART SEEKS MAJOR REDUCTION IN LOCAL TAX BILL TEXAS - PROPERTY TAXES: HOW HOUSTON COMPARES TEXAS - 4 PROPERTY TAX REFORM BILLS SIGNED BY GOV. ABBOTT TEXAS - HOW MUCH IS THE PROPERTY TAX ON COMMERCIAL PROPERTY IN TEXAS? TENNESSEE - REAPPRAISAL APPEALS DOWN DESPITE STEEP RISE IN HAMILTON COUNTY PROPERTY ASSESSMENTS PENNSYLVANIA - IT'S TIME FOR NEW MODEL ON PROPERTY TAXES PENNSYLVANIA - WESTMORELAND LEADERS FINE WITH 44-YEAR-OLD ASSESSMENT SYSTEM OHIO FARMERS PUSHING FOR CHANGES TO LAND VALUE FORMULA NEW YORK - OLEAN SOLAR PROJECTS SEEKING PILOT OVER ASSESSMENTS NEBRASKA - LPS BUDGET DISCUSSIONS INCLUDE $18 MILLION FROM INCREASES IN PROPERTY VALUATIONS MICHIGAN - BLACK VICTIMS OF DECADES-OLD DISCRIMINATION FIGHT TAX BILLS MICHIGAN - WALMART ACQUIESCES IN BIG-BOX DARK STORE TAX DISPUTE IN MICHIGAN ILLINOIS - TRUTH IN TAX INCREMENT FINANCING ARRIVES WITH PROPERTY TAX BILLS ILLINOIS - AMAZON MAY EMPLOY 8,000 PEOPLE IN ILLINOIS BY END OF ILLINOIS - BERRIOS DEFENDS COOK PROPERTY TAX ASSESSMENTS AFTER TRIBUNE REPORTS INEQUITIES FLORIDA - SUPREME COURT RULING GIVES FORT PIERCE WIN IN CASE OVER MARINAS' PROPERTY TAXES DISNEY SUES OVER PROPERTY ASSESSMENTS FOR MAGIC KINGDOM, OTHER PROPERTIES CALIFORNIA - PROPERTY TAX EXEMPTIONS CALIFORNIA - COULD TAX BREAKS TURN EMPTY LOTS INTO URBAN FARMS?... 31
2 P a g e 2 CALIFORNIA - ALBANY ASSESSOR TO RETIRE FOLLOWING TAX BREAK ERROR ALASKA - CITY OF FAIRBANKS MOVES TO RAISE TAX CAP; WOULD MEAN INCREASE IN PROPERTY TAXES How Big Box Stores Shift Their Property Taxes Onto Homeowners Something called the Dark Store Loophole lets companies like Wal-Mart shift their property taxes to homeowners and small merchants. This obscure [property tax dodge, which has been going on for more than two decades, has pitted Big Box retailers like Lowe s, Home Depot, Target and Wal-Mart against taxpayers in small towns across America. Wealthy corporations who ought to be paying their fair share, have managed to escape paying millions of dollars in property taxes by arguing their stores have no more value than an abandoned building. This past week, Wal-Mart was at it again: challenging its property tax assessment in Monona, Wisconsin. The city has assessed Wal-Mart for $646,485 in property taxes, but Wal-Mart is seeking to cut their bill by one-third, to $433,000. A complex legal decision rendered by the Wisconsin Supreme Court nine years ago in a Walgreen s case may help Wal-Mart force Monona to settle. Big Box stores are trying to convince cities and town and courts in many states that their stores should be appraised based on the value of Dark Stores which are vacant big box buildings. Wal-Mart Realty has abandoned hundreds of dead stores by the roadside, which often decay for years before being torn down. Big retailers want assessors to value a fully-functioning store similar to one that has no sales at all. The Wisconsin Supreme Court ruled that a property tax assessment of leased retail property using the income approach must be based on market rents, which is what a company would pay to rent the property, based on rentals of similar property. The city of Madison, Wisconsin argued before the court that retail assessments should be based on contract rents, which is the amount that the company actually paid to rent the property. But the League of Wisconsin Municipalities (LWM) is pushing back. The group has called this tax loophole movement a carefully-orchestrated wave of lawsuits forcing assessors to slash the market value of thriving national retail stores, shifting their tax burden to local mom and pop shops and to their home-owning customers. The LWM is backing legislation at the state level that prohibits assessors from valuing thriving stores the same as abandoned ones. The League warns, If the Legislature fails to close theses loopholes, we estimate that millions of dollars in property taxes will shift from large commercial properties to homeowners and other taxpayers over the next few years. In Wisconsin, homeowners already bear 70% of the property tax burden. Big Box stores in many states have exploited this Dark Store loophole. The battle in Wisconsin is not unique. According to Governing magazine, Michigan localities have taken a Dark Store hit, and counties in Alabama, Florida and Indiana are watching their property tax base erode. The National Association of Counties tags this as a growing challenge in Iowa, North Carolina, Ohio, Tennessee, Washington and Wisconsin. The Dark Store bill, LRB-0373, now in the Wisconsin legislature, is modeled after similar legislation passed by Michigan and Indiana in The bill clarifies that when assessors use sales of comparable properties for determining the value of a property they must use properties that are within the same market segment and similar to the property being assessed with regard to age, condition, use, type of construction, location, design, and economic characteristics, the LWM says. The bill explicitly provides that assessors may not use a dark store as a comparable for property that is not dark or vacant. The city of Janesville, Wisconsin, where U.S. House Speaker Paul Ryan lives, has been served with 20 Dark Store lawsuits in the past six years, and has had to refund taxes in seven of those cases. This Dark Store battle is an issue that appears to have strong bipartisan support, with Republicans leading as sponsors in the state legislature.
3 P a g e 3 Last month, the Common Council of Janesville unanimously adopted a resolution similar to 46 other villages, towns, cities and counties in Wisconsin, urging the Governor and Legislature to close loopholes that shift a greater property tax burden from commercial to residential properties. The resolution says lawsuits in Wisconsin are forcing assessors to reduce the market value of thriving national chain stores, shifting the tax burden to local businesses and home owners. The resolution urges the Governor and Legislature to protect local businesses and home owners from having more of the property tax burden shifted to them by passing legislation that allows for leases to be appropriately factored into the valuation of leased properties. Most communities don t have deep enough pockets to challenge a Dark Store lawsuit. Wealthy companies like Wal-Mart show no shame in trying to push costs onto small homeowners in towns where their stores are thriving. Corporate America lives off of such loopholes. WASHINGTON -Biggest education reform in state history will rely heavily on property taxes SEATTLE The state s tentative budget pumps billions more into education, relying heavily on property taxes to foot the bill. Lawmakers say the two-year budget deal amounts to $43.5 billion, with $7.3 billion of that for education that will be phased in over four years starting this fall. Eight key negotiators who worked on the budget and the education portion of the plan believe the deal will comply with the state Supreme Court s 2012 McCleary decision in which the justices ruled the state was failing to fully fund public education. The court gave the state until 2018 to comply. It heals a wound that s been festering for 30 years and it closes the gap of the haves and the have-nots, Sen. Ann Rivers, R- La Center, said. The outline of the education plan provided Thursday sets a minimum starting salary for teachers at $40,000, with adjustment for inflation and regional differences. Under the plan, the average minimum salary for instructional staff will be $64,000, and adding in regionalization, it will range from $66,194 to $82,081. School districts can pay a salary over the maximum of $90,000 by up to 10 percent for educational staff associates or teachers who teach science, technology, engineering, math or in bilingual or special education programs. Also under the measure: There s a mandatory 10 percent increase after 5 years of employment. Starting in , the minimum state allocations for salaries must be adjusted annually for inflation. Starting with the 2023 session, and every six years after that, the Legislature must review compensation to make sure they are adequate based on the market and economic differences between school districts. The Washington Education Association, which represents teachers, said in a news release that while the new funding plan "represents progress, it falls short of amply funding our students' K-12 public schools" as required under the McCleary decision. I the budget gets the votes needed for passage and the governor s signature by midnight Friday, there will be no government shutdown when the new fiscal year kicks in on Saturday, July 1. The budget will also impact many Washingtonians in a big way. When it comes to 1.1 million kids in public schools, lawmakers promise that classroom sizes will shrink and more resources will be given to special education and other programs. You will notice additional help for low-income students, Sen. Andy Billig, D-Spokane, said. The plan will increase the statewide property tax earmarked for education to pay the salaries of basic educators instead of the current situation where salaries are paid through levies raised by local school districts. Starting in 2018, levy dollars would only be allowed for enrichment programs and for salaries outside of basic education, for example, compensation for a coach.
4 P a g e 4 Educator salaries will increase across the board but also equalized so that a teacher in Spokane will make relatively the same as an educator in Bellevue. There is a provisional (item) that if you live in an area that s high-cost... you will get some additional funding to compensate your teachers, Billig said. Nobody s salaries will go down; it could be the case that some districts won t see the salary increases that others will because they are already paying high salaries, Sen. Christine Rolfes, D-Bainbridge Island, said. Education funding will affect Washingtonians, depending on where you live. Property taxes will pay for about $4 billion of the $7.3 billion in new revenue pumped into education. If you live in an area with high property values, such as Seattle, Mercer Island and Bellevue, expect to see substantial property tax increases. It is possible that some homeowners in Seattle could see their property taxes go up by $400 in one year and Mercer Island close to $1,000. The exact numbers have yet to be announced but they are expected to be close to those projections. But Republicans on Thursday said many Washingtonians would see their property taxes go down. It s absolutely helping the middle class and 73% of Washington, Sen. John Braun, R-Centralia, said. Braun said the deal finds a way to comply with the McCleary decision in a fair way. But Democratic Sen. Reuven Carlyle, who represents Seattle, says it s far from fair. It s a stressful situation; it looks like property taxes are a major component of this and I think it s safe to say it s a Democratic budget with a Republican tax plan, Carlyle said. Carlyle called the budget the good, bad and the ugly. Sen. Kevin Ranker, D-Orcas, one of the key budget negotiators, said both sides had to compromise. In the end, politics have to be the art of yes. There has to be compromises in the end; Republicans would only agree to property tax increases, Ranker said. Democrats say they would have liked a capital gains tax and a carbon tax to generate the money for education, but neither made it in the deal. But Ranker says they pushed to close current tax exemptions. It s closing the loophole on big oil, so extracted fuel -- as well as closing the (sales tax exemption) loophole on bottled water, Ranker said. Lawmakers also agreed on requiring online companies like ebay to charge a sales tax on goods sold online. The sales tax measure will generate about $1 billion in new revenue. Lawmakers have to vote by midnight Friday to prevent a government shutdown. Texas Legislature to revisit property tax reform in special session State lawmakers will return to the Capitol for a special session next month to tackle property tax reform, a legislative priority for Lt. Gov. Dan Patrick that was stymied in the House during the regular session.
5 P a g e 5 Texans pay the sixth-highest property tax in the nation and Texans have told us loud and clear that common-sense property tax reform legislation is long overdue, Patrick said in a statement in November after Sen. Paul Bettencourt, R-Houston, filed Senate Bill 2, which limits property tax increases to less than 5 percent before a rollback election is automatically triggered. Property taxes are driving people out of their homes and hampering business expansion and growth, Patrick said. It s time for this to stop. The Senate passed the bill in March. The House excluded the automatic rollback election provision in its version of the proposal. Critics argue it handicaps local governments ability to fund public services and does little to cut property taxes as it doesn t include school districts, which account for a majority of a Texas homeowner s tax bill. (School finance is) where you have to start if you want real property tax relief, Rep. Tony Dale, R-Cedar Park, said. Dale said House Bill 21 would have provided an additional $1.6 billion into school funding, increasing the basic allotment to $5,350 per student. The bill didn t receive the Senate s backing. That was our attempt to help school funding and add property tax relief, Dale said. More than half of Texas counties, including Bastrop, have passed resolutions opposing the bill, and the mayors of Austin, San Antonio, San Marcos and New Braunfels issued a joint statement attacking the plan, saying it would save their taxpayers little but would result in significant cuts to city services. You can never anticipate when there will be a terrible disaster in the community, Bastrop County Judge Paul Pape said after commissioners passed the resolution. We (out) of 254 counties in Texas know better than anybody that when it happens, you need to be able to raise the funds to provide the services that your citizens need and deserve. Under existing law, local governments may raise effective tax rates (the rate needed to raise the same total amount of taxes from the same local properties as the year before) up to 8 percent before residents can petition for a rollback election. Senate Bill 2 would automatically trigger a rollback election when a local government, except for school districts, increase the effective tax rate by 5 percent or more. It s complex but it needs to be addressed and that is the incredible rise in property taxes in this state. I can feel the groans, Gov. Greg Abbott told Bell County Republicans during a speech earlier this month. People are being priced out of their homes, he said. It turns out you re not owning your own property and there needs to be a solution. But it seems like at least a starting place, and maybe the best way to solve it, is to for those who pay the property taxes, let them have a say on what those property taxes will be. Give them a vote on their own property taxes. Smithville City Manager Robert Tamble and Bastrop Mayor Connie Schroeder said city taxes in each jurisdiction represent about 20 percent of taxes levied across the county, while schools account for about 55 percent of all property tax bills statewide. City property taxes are used to fund community services like fire, police, street repair, and drainage improvement, Tamble said. The city estimates this legislation will place an unnecessary financial burden in the amount of $8,000 per election if/when an ad valorem tax increase is needed that exceeds the 5 percent limit. These funds are not allocated in our budget and our city will be forced to either find a new revenue source to cover the cost of a mandated election, or more likely, streamline an already tight budget and cut necessary services to our community. In Bastrop, a home valued at $150,000 pays $3,860 per year in total property taxes. The city s portion of that bill is $846 or $2.32 per day, Schroeder said. If the state caps property tax increases at 5 percent, the city could only raise taxes by $42 annually or 11 cents per day before triggering an automatic rollback election, Schroeder said using the $150,000 home value figure. It seems the main point of Senate Bill 2 is to provide a distraction from addressing the real issue when it comes to high property taxes for Texas citizens - funding public education, she said.
6 P a g e 6 Every citizen has an expectation their city will keep its tax rate as low as possible and spend every tax dollar collected in the most efficient manner, she said. I believe the citizens of Bastrop are well served in this area. Bastrop County has not raised property taxes by more than 2.25 percent in the past 10 years, County Auditor Lisa Smith said. The sole tax increase in those 10 years came after the 2011 Bastrop Complex Fire when officials raised the rate from cents to cents per $100 valuation. The county s current tax rate of 59.9 cents per $100 valuation is the lowest it s been since 2001, Smith said. You can never anticipate when there will be a terrible disaster in the community, Pape said. We (out) of 254 counties in Texas know better than anybody that when it happens, you need to be able to raise the funds to provide the services that your citizens need and deserve. The Texas Municipal League, which advocates the interests of and lobbies for cities, said SB 2 is an assault on public safety. Legislators can t proclaim that they support law enforcement officers if they vote to restrict the source of funding that pays for salaries, equipment, vehicles, technology, health insurance and pensions of the men and women who protect our citizens. A vote for S.B. 2 is a vote against law enforcement, the group said in a talking points memo. Rep. Celia Israel, D-Pflugerville, said changing the rollback process for tax increases equates to the state telling cities how to do their jobs. She said legislators were unable to find consensus on the matter during the regular session and doubts it ll change during the special session, which begins July 18. I don t understand the practicality of taking on property taxes and cities in 30 days when we couldn t find a solution in 140 days, she said. Dale said every member who served during the regular session is returning to Austin for the special session and the likelihood of them changing their minds is low. Nevada gets $26.2M in federal property tax compensation Sen. Dean Heller, R-Nev., says Nevada will receive $26.2 million from the Payments In Lieu of Taxes program this year. PILT is a federal program designed to compensate states for property tax revenues they're unable to collect because they have a high percentage of non-taxable federal land within their borders. In Nevada, 85 percent of the land is federally owned and, therefore, non-taxable. Heller said the PILT money helps local governments in Nevada's 17 counties provide essential services including public safety and education. He said this year's total PILT funding is a record $464.6 million. Heller applauded Interior Secretary Ryan Zinke for his support for the program. Zinke, who visited Nevada this past week, said growing up in Montana, "I know how important PILT payments are to local communities that have federal lands." "PILT investment often serves as critical support for local communities as they juggle planning and paying for basic services such as public safety, fire fighting, social services and transportation," he said. While Alaska has the most federal land million acres Nevada has the highest percentage of federal land at 84.9 percent or 58.2 million acres. Esmeralda and Lincoln counties have the highest percentages of federal property. Both are more than 98 percent federally controlled. But Lander, Nye and White Pine counties are all more than 90 percent federal.
7 P a g e 7 INDIANA - Indiana likely to end up in courts over online sales tax As online sales continue to rise and brick-and-mortar retailers suffer the consequences, there s another surprising loser: states. A 25-year-old Supreme Court case decided even before the birth of the largest e-commerce company, Amazon prohibits states from collecting sales tax from businesses unless they have a physical presence in the state. Indiana lawmakers, however, passed a law this spring claiming the state has a right to collect sales taxes from those using only online transactions. If companies abide by the state law, it could mean Hoosiers will pay more sales taxes starting July 1. But if companies don t which is likely Indiana will find itself in a court battle. We anticipate further litigation and actually, we welcome the litigation, said bill sponsor Sen. Brandt Hershman, R-Buck Creek. For years, states have grappled with the 1992 Supreme Court case Quill Corp. v. North Dakota as online retailers started to dip into the revenue of traditional retailers. Between the start of 2016 and 2017, e-commerce sales increased by 14.7 percent, while total retail only increased by 5.1 percent, according to the U.S. Department of Commerce. The impact is evident in the number of large retailers such as Sears and JCPenney that have announced they are closing stores. As a result, the state is losing some of its largest source of revenue: sales taxes. In 2016, more than 40 percent of the state's $18 billion revenue came from sales taxes. A study published by the Indiana Fiscal Policy Institute and Ball State University estimated the state lost around $77 million in 2012 because Indiana cannot collect all online sales taxes, while a separate University of Tennessee study put that figure at $195 million for the same year. The Indiana Department of Revenue declined to release their current estimates, due to "imminent pending litigation." The state is still able to collect some of its online sales taxes, through agreements with nearly 2,000 companies, including Amazon, which add state sales tax to purchases. But many others have refused to do so. By law, consumers are also supposed to pay that tax later themselves as a use tax, however Appropriations committee chair Luke Kenley, R-Noblesville, estimated less than 5 percent of Hoosiers remit that tax on their annual tax returns. According to a fiscal analysis from the Legislative Services Agency, the state only made $2 million in use tax collected on tax returns. Congress has the authority to regulate interstate commerce, so it could pass legislation allowing for online sales taxes. For more than a decade groups, like the National Conference of State Legislatures have lobbied Congress for such a law with little success. In 2013, the Senate passed the Marketplace Fairness Act, but the bill couldn t get the support of the House. A law was proposed in Congress this year that could still go somewhere, but many states have decided to take the matter into their own hands. Online giants Wayfair Inc., Overstock.com Inc. and Newegg Inc. are now suing South Dakota for its 2016 law that nearly mirrors the one passed in Indiana this spring. Both the Indiana and South Dakota laws require online retailers that make 200 separate transactions or have sales exceeding $100,000 per year in the state to collect and remit the sales tax. The case is now being debated in the top South Dakota court and could make its way to the U.S. Supreme Court. Indiana lawmakers want the court to intercede in hopes that the it would affirm the state s right to collect the tax. We re pretty confident that we can win, Kenley said.
8 P a g e 8 Apart from his desire to build up the state s revenues, Kenley also worried about the stores operating within Indiana that are required to collect the 7 percent sales tax, while online retailers with no physical presence in Indiana are not. After all, Indiana has the second-highest state sales tax in the U.S. It s becoming a bigger problem and a bigger issue of fairness, Kenley said. It s kind of a big issue to our brick-and-mortar stores because they re at a disadvantage here, and they do something for the state by operating in the state and employing people in the state. Those opposed to the online sales tax see it differently. NetChoice, a trade association of e-commerce businesses, argues adhering to the tax codes in every state and city would be "bureaucratic gymnastics." The association is pushing for their own legislation protecting online-only companies from state taxes: the No Regulation without Representation Act of But Grant Monahan, the president of the Indiana Retail Council, said those who have a physical presence in the state are at a significant disadvantage. That should change, he argued. "We know that retailing is tough and competitive, and that s not going to change," Monahan said, "but it should be a level playing field when it comes to collecting and remitting sales tax." ILLINOIS - Abolish property tax exemptions for rich nonprofits Illinois is the land of special favors for those with lobbyists, connections or clout. Just look at the state's property tax laws and the exemptions for rich nonprofits. Retired homeowners living on fixed incomes pay hefty property taxes, despite the so-called "senior exemption." On the other hand, real estate owned by many rich nonprofits is completely exempt from property taxes. This includes private university campuses and their sports facilities, the gleaming skyscrapers of qualifying private hospitals and magnificent church cathedrals. And lots of other expensive real estate owned by other qualifying nonprofits. All completely exempt and unfair. Wealthy nonprofits with expensive real estate use and benefit from the same law enforcement, fire protection and other basic services as other property owners. These nonprofits may not principally use their real estate to make money, but neither do most families. This system also dumps the hefty shares of the tax burden that these nonprofits should pay on the rest of us. We can no longer afford this burden. Illinois has the highest median property tax rate in the nation, according to a 2016 analysis by CoreLogic. Reports indicate that in 2016, Chicago property tax bills increased by an average of almost 13 percent and will increase by about another 10 percent in Abolishing the exemptions for these nonprofits would allow taxing bodies to lower tax bills for poor and struggling homeowners, fund more basic services or both. Abolishing these exemptions also would eliminate some broader negative economic consequences. The exemptions make it less expensive for nonprofits to own real estate than it is for homeowners and businesses. The exemptions give nonprofits subsidies that the rest of us do not receive. Nonprofits end up owning more real estate than they would otherwise. This reduces the supply of real estate for homeowners and businesses and makes the remaining supply more expensive. More expensive real estate means higher prices for homes, goods and services. The bottom line is that rich nonprofits should pay property taxes at the same rates as the rest of us. It is inexcusable that the University of Chicago, with its $12 billion in investment assets, is exempt from taxes on its 217 acres in Hyde Park. Or that
9 P a g e 9 Northwestern University, with its $10 billion endowment, is exempt from taxes on its 240 acres on Lake Michigan's lakefront in Evanston and blocks of real estate in Chicago's Streeterville neighborhood. But what about small or struggling churches, charities or other nonprofits for which property taxes would be a particularly heavy burden? The answer is both simple and fair: Limit the exemptions to property value under $1 million. If a nonprofit is rich enough to own real estate worth more than $1 million, it is rich enough to pay property taxes like the rest of us on the part of the value of the property that is over $1 million. Completely exempting churches and other favored nonprofits is no more equitable than completely exempting the elderly, lower earners or any other group of property owners. It is time to abolish property tax exemptions for rich nonprofits and instead limit these exemptions to $1 million of property value. Continuing to give rich nonprofits unlimited special treatment feeds a corrupt system that we can no longer afford. Alaska communities to receive millions in Payments In Lieu of Taxes PILT funding is determined by Congress and provides local governments with funding they can t get from tax-exempt federal lands within their boundaries. It pays for services in communities containing national parks, national forests and other public lands. Because there are impacts from people coming to visit those federal lands for recreation, for fishing, for hiking, whatever there are costs associated with with maintaining roads, public safety, Kenai Peninsula Borough Mayor Mike Navarre said. It s tax exempt but there are costs associated for local governments and state governments to pay some of the costs of services. And that s what a Payment in Lieu of Tax is for. So it s very important. Alaska s 18 organized boroughs will each get a check from the federal government. Navarre s borough and the Mat-Su Borough will receive the largest funding amounts with both getting more than $3 million each from the federal government. However, Alaska also has vast tracts of land not in organized boroughs, according to Kathie Wasserman with the Alaska Municipal League. This land, known as the state s Unorganized Borough, will also see money from the PILT payments, but it won t be in the form of one payment since there is no borough government to receive it. So those 18 boroughs will each get a check and then the state gets a big one for all the geographical land that is in the Unorganized Borough, Wasserman said. And they send it to every organized municipality within the unorganized borough. So 146 municipalities will split a large check from the state. Navarre said that certain capital projects in his borough wouldn t get funded without assistance from PILT funds. We ve just set up a highway service corridor for emergency services. And it s going to be paid for, in part, with Payment in Lieu of Taxes, Navarre said. And the reason it s important is it s a whole corridor from almost Hope all the way down to Sterling and into Moose Pass. Those highways, where there s a lot of federal land adjacent to it, where there s large swaths of highway that there s no residents that live in, but emergency services have to be provided, or should be provided. The almost $30 million Alaska will receive is part of a record $464.6 million that will be distributed to 1,900 local governments in the country this year. President Donald Trump, in his budget proposal, proposed a 12 percent cut to PILT funding for next year. Navarre said that with reductions in PILT funding, the budget gap would end up falling on state residents to fill. Having that land be tax exempt means that the other taxpayers on taxable lands and taxable properties have to pay for those costs of services. So it s important that we continue to make that case to the federal government. Taxpayers in areas near federal lands, particularly Western states, will have to wait for Congress to pass a federal budget before they know how much they will receive in next year s PILT payments.
10 P a g e 10 NORTH DAKOTA - Property tax facts from local representatives Property taxes are a concern of everyone who owns property. The following are some facts when you are discussing the issue of property tax. Fact #1: The state of North Dakota does assess one mill of property tax for the Medical School at the University of North Dakota, other than that, the state does not levy property tax. Property tax is a local tax. Fact #2 Starting in 2007, the State of North Dakota has increased its contribution to local property tax relief through picking up 115 mills of public k-12 education and a 12% buy down of the local property tax liability. The 115 mills were permanent, however, the 12% was to help the local property tax payer because the state had the revenue. The total amount of property tax relief for the biennium equaled $1,254 million (1.25 billion), which was 20% of the $6.2 billion General Fund Budget. If the State of North Dakota had done nothing with property taxes from 2007 to the current time, then the property tax payer would have paid the total $1.25 billion over the past two years. Fact #3 replacing the 12% buy down with the 20 mill County Social Services was not equal, because most counties levied around 11 to 13 mills, therefore, the state replaced approximately $242 million with $142 million. This is equal to a 7.5% buy down and depending on what the local political subdivision levies for property taxes will be the key, however if everything would stay the same, it would mean an approximate annual increase of $30 on a $100,000 home, $60 on a $200,000 home and $90 on a $300,000 home. Fact #4 During the next ( ) biennium the State of North Dakota has appropriated a total of $1,362.4 million (1.36 billion) for the 115 mills of k-12 school funding and the 20 mill take over for the County Social Services. The total property taxes paid for services in the State of North Dakota equals $3.5 billion and the State pays $1.36 billion of that amount, which equals 39%, and is the responsibility of the State of North Dakota. Fact #5 The $1.36 billion of property tax take over by the State of North Dakota is embedded in the $4.33 billion total General Fund Appropriation for the biennium. $1.36 billion is 31.4% of $4.33 billion, which means that the property tax payers of North Dakota receive a benefit of 31.4% of the State General Fund Budget. Fact #6 The State of North Dakota has appropriated $3.5 billion over the past six years as one time funding to build roads and help communities with building streets. These one-time infrastructure appropriations have taken the pressure off the backs of property tax payers, because if the state funding had not pick up the cost to build roads and streets the responsibility would have fallen on the property tax payer. Fact #7 Prior to 2007 the State of North Dakota did not do any type of property tax relief. When you add up the 115 mills for K- 12 and the 20 mills for County Social Services that equals 135 mills, which generates over $1.36 billion per biennium, and it has been permanently eliminated from the local property tax payer and will be the responsibility of the state. ILLINOIS - Outsider to Review Cook County Assessment Process The president of the Cook County Board says the county assessor has agreed to an outside evaluation of the property tax assessment process. Board President Toni Preckwinkle says she and embattled Cook County Assessor Joe Berrios, a close political ally, have agreed to bring in a third party reviewer, although they don t know yet who that will be. The decision to review how assessments are conducted comes in the wake of a Chicago Tribune investigation that found the county s property tax system regularly overvalues properties in poor and minority areas, and undervalues properties in wealthier areas. Berrios has defended the practices of his office, saying that claims of a regressive system are unfounded.
11 P a g e 11 Every property tax assessment system ought to be fair and equitable Preckwinkle said during an interview Thursday on Chicago Tonight. The assessment process across the country is complicated and nuanced. I ve had conversations with Assessor Berrios and he and I have agreed to have a third party look at our entire tax system and try to figure out how we can improve it. In a statement, Berrios confirmed the plan. President Preckwinkle and I agree that an independent third party will look at and evaluate the county s current assessment models, he said. The third party will also evaluate new, developing or proposed models which others may be working on. The Assessor s Office always strives to assess property as fairly and as close to market value as possible. We will continue to strive for that. We will also continue to support the right of taxpayers to appeal to our office or the Cook County Board of Review. But in her statements to Chicago Tonight, Preckwinkle acknowledges the possibility that the assessment system is discriminatory toward minorities and the poor, and has vowed to get moving on a review in the next few weeks. We re exploring that process and have contacted folks and asked them for help, she said. We ll be able to identify an entity that will do this work for us, or we will put a process in place to choose such an entity. Preckwinkle also said she believes Berrios should be transparent about how the process works and acquiesce to Freedom of Information Act requests seeking that data. WISCONSIN - Monona Walmart seeks major reduction in local tax bill Is a lawsuit forthcoming? If successful in an anticipated lawsuit against the city, the assessed value of Monona s Walmart would drop from $28.6 million to $9.6 million. Local government officials are calling on state lawmakers to stop corporate tax loopholes they say have individual taxpayers picking up the bill. Walgreens, CVS, Target and other national chains have successfully challenged their property tax bills, asking that the market value of their successful stores be based on sales of comparable properties that are abandoned and vacant. Successful court battles by the corporations have slashed property tax bills in half in some cases. In May, the Monona City Council approved a resolution urging the governor and Legislature to not allow big businesses to shift taxes to homeowners and small businesses. A carefully orchestrated wave of hundreds of lawsuits in Wisconsin is forcing assessors to slash the market value of thriving national retail chain stores, according to the resolution. Walgreens and CVS stores in Wisconsin have argued in communities across the state that the assessed value of their property for property tax purposes should be less than half of their actual sale prices on the open market. There are Walgreens stores in Monona and McFarland, as well as a CVS store in Cottage Grove. Walgreens and CVS rely on a 2008 Wisconsin Supreme Court decision, Walgreens v. City of Madison, to control how assessors must value their stores. Target, Lowe s, Menards and other big box chains are using what is known as the dark store theory to argue the assessed value of a new store in a thriving location should be based on comparing their buildings to sales of vacant stores in abandoned locations, or traditional warehouse properties. Representatives of the Walmart store in Monona are challenging the city s assessment of that property. Records show the 13.4 acres are assessed at $1,862,100, with improvements valued at $26,707,500, for a total assessed value of $28,569,600. Based on this assessed value, the company pays $646, in taxes.
12 P a g e 12 Walmart representatives have filed paperwork with the city challenging those numbers, insisting instead the total value should be $9,550,000 a full two-thirds less, which would reduce their tax bill by about $433,000. City Clerk Joan Andrusz said she expects a court challenge of the city s assessment, and Walmart has until early September to file a lawsuit if that is the intention. Target Corp. has won a court case against the city of Sun Prairie. Target Corporation said it was overtaxed from on its Sun Prairie store property at 660 S. Grand Ave. and took the city to court, similar to cases it s fighting statewide. Under a legal settlement agreement, the city of Sun Prairie agreed to refund Target $85,020 in property taxes with assessments reduced by more than $1 million. An attorney representing the city said the settlement avoided a Dane County Court trial that would have cost the city at least $100,000 more if Target had prevailed. In February 2014, the city of Wauwatosa agreed to repay Target Corp. $189,780 in property taxes as part of a settlement. Representing Target in all these cases was attorney Don Millis, who s been successful in getting big bucks back for corporations. Millis, whose clients include Walgreens, K-Mart and Land s End, said Target as part of the retailer s business plan looks at all property assessments and cuts costs where it can to stay competitive. He said Target stores are usually assessed at $55-$75 per square feet. With the settlement, the Sun Prairie store comes in the mid-range of that, Millis said. Andrusz said there are proposals at the state level that would overturn the Walgreens v. City of Madison decision and close the dark store theory loophole, but neither would go into effect until the next tax year at the earliest. TEXAS - Property Taxes: How Houston Compares In cash-strapped Houston, property taxes play a large role in financing city services. They represented around 46 percent of the total general fund in the city of Houston s latest budget. But a citywide revenue cap, approved by voters in 2004, restricts annual property tax increases and, Mayor Sylvester Turner has argued, hamstrings the city government in the process. In his State of the City address in May, Turner said the city had foregone an estimated $221 million in lost revenue since the cap went into effect in Turner has promised to bring the cap before the voters in November, asking them to repeal to the measure. Repealing the revenue cap means a better credit rating for Houston, and lower costs for taxpayers when we finance improvements to the City buildings, parks and libraries that serve our neighborhoods, said Turner in his May address. Many, including former mayoral candidate Bill King, have been vocal about the need to keep the cap, particularly as tax bills surge upward along with property values in Houston. It is a little embarrassing to ask voters to repeal the property tax cap in a year when the property taxes are increasing by double digits, wrote King in the Houston Chronicle. But, according to a national analysis by the Lincoln Institute of Land Policy, Houston has the lowest effective property tax rate the tax bill as a percent of a property s market value among Texas cities. Nationally, however, Texas cities stand out for their relatively high tax rates, partly because the state has no income tax. And even though Texas bans any statewide property tax, some have argued in legal challenges, that the reliance on that revenue to fund schools has effectively created just that.
13 P a g e 13 Property Taxes on Median Valued Home for Largest City in Each State in New York and Illinois both have two cities included in the count since their taxation schemes vary so much. Source: Lincoln Institute of Land Policy. Comparing the largest cities in each state in 2016, the latest annual report from the Lincoln Institute ranked Houston 16th for its effective property tax rate of 1.78 percent and 23rd for its tax bill for a median valued home. The city s effective tax rate for
14 P a g e 14 commercial properties 2.36 percent ranked 19th among the biggest cities in each state. And for apartment property taxes, Houston ranked 13th with an effective tax rate of 2.35 percent, according to the report. Comparing the taxes paid on apartments and homestead residences those occupied by a homeowner as their primary residence and that receive tax exemptions the report also quantified the degree to which apartments subsidize homestead property taxes. In most cities, commercial property taxes were responsible for a larger chunk of the subsidy but in a handful, including Houston, the effective tax rate for apartments was higher than for commercial property, meaning apartments paid for a larger chunk of the subsidy for homeowners. The report also tried to contextualize the variation in tax rates by assessing how reliant a local government was on property tax revenue. Here, Houston ranked 15th out of 73 cities despite ranking 21st for its tax rate. Median home values in Houston also fell on the lower end of the rankings: 50th out of 73. TEXAS - 4 property tax reform bills signed by Gov. Abbott Abbott calls Texas Legislature back for special session AUSTIN - Four property tax reform bills aimed at bringing added transparency, accountability and simplicity to the property tax process in Texas have been signed by Gov. Greg Abbott. Officials said three bills authored by Sen. Paul Bettencourt, as well as one bill authored by Rep. Jim Murphy and sponsored in the Senate by Bettencourt, will now become law. "Any day that you can implement common sense reforms to the property tax process that give taxpayers more options, better information and more clarity in the overall process is a good day," Bettencourt said. "This package of bills represents another step forward as we continue our effort to bring about meaningful property tax reform and relief for all Texas taxpayers." "If we can make our taxing process easier to understand, easier to administer and more fair, those are things that I am proud to team up with Sen. Bettencourt to achieve," Murphy said. The bills are: SB 731, sponsored in the House by Rep. Bohac, raises the limit from $3 million to $5 million for a property owner to appeal an Appraisal Review Board decision through binding arbitration rather than filing a lawsuit. SB 945, sponsored in the House by Rep. Murphy, allows a chief appraiser in some cases to correct an erroneously denied or canceled exemption. SB 1286, sponsored in the House by Rep. Murphy, requires the comptroller to establish rules for Central Appraisal Districts and property owners for providing electronic copies of evidence for an ARB hearing, as well as speed up the process of how arbitrators are selected by as much as 30 days. HB 2228, authored by Murphy and Senate sponsor Bettencourt, streamlines the property tax process by changing certain deadlines and making the overall process more efficient. Abbott has called the Texas Legislature back for a special session that is scheduled to begin July 18. Officials said one of the overall priorities identified by the governor for the special session is additional property tax reform and relief, such as what was found in Senate Bill 2, by Bettencourt, which passed the Senate in the regular session but did not receive a vote in the Texas House. "While we did pass several bills that included useful taxpayer tools and appraisal process protections, Gov. Abbott is absolutely correct when he says there is more work to be done," Bettencourt said. "Property tax bills have been rising must faster than Texans' ability to pay them. As appraised values go up, property tax rates should come down. Taxpayers expect to have a vote on this critical issue, and SB 2 is on the call for the special session for that exact reason."
15 P a g e 15 Officials said Senate Bill 2 was formulated after almost 50 hours of testimony before the Senate Select Committee on Property Tax Reform and Relief's statewide tour. Bettencourt has pledged to reintroduce legislation similar to Senate Bill 2 when the special session gets underway. TEXAS - How much is the property tax on commercial property in Texas? Once again, a simple question requires a long-winded answer to be of any value to the questioner. It depends and varies from county to county, and from taxing entity to taxing entity. Let me explain - In Texas, each county collects property tax on land within that county. Tax is collected by the County Tax Assessor-Collector, an elected official who presides over the County Tax Office. The tax office merely collects the tax, it does not set the tax rate. The land value (fair market appraisal) and tract parcelization is tracked and officially assigned by the County Central Appraisal District. This entity maintains the official Tax Map Of all individual taxable land parcels, no matter how large or small, located within the County. Non agricultural Land is taxed based on its market value and taxes on agricultural land are adjusted based on actual productivity and it's agricultural market value, which is usually substantially less than market value. The Appraisal District does not collect taxes nor set the tax rate, it merely determines taxable land values. As for taxes? Each taxing entity within the County sets its own tax rate, with the approval of the voters - either directly in called tax rate elections, or indirectly by firing elected officials who raise (or lower) taxes too much and enrage the voters. Taxing entities are commonly: city, county, School district, hospital district. Other special taxing entities, created by the voters to fund special needs, may exist in some places. Such special districts include (but are not limited to) such entities as community college district, hospital district, wastewater improvement district, rural emergency services district, flood control district, mosquito control district and similar. Tax rates may vary wildly from city to city and between various taxing entities. I have a home in Brazos County. The City is College Station. Taxes on my house are: City Tax, County Tax, and College Station Independent School District Tax (school tax). Brazos County Tax - $0.485 College Station City Tax - $ CSISD School Tax - $ Combined Tax rate- $ per $100 valuation. To determine the taxes due on any property in Texas, simply go to the Appraisal District website and see what the combined tax rate for all entities which have taxing jurisdiction over the property. Multiply the combined tax rate by the actual value assessed by the Appraisal District and that will provide you the taxes for each individual property. I hope this helps. TENNESSEE - Reappraisal appeals down despite steep rise in Hamilton County property assessments The property tax assessments for most Hamilton County homeowners rose this year by the biggest amount in at least eight years, but fewer homeowners are appealing their reappraisals than in previous assessment periods. The Hamilton County Board of Equalization began hearing appeals of local property assessments last week and will continue hearing cases and accepting appeals through at least next week.