State Senator Mary Lazich (R-New Berlin) represents parts of four counties: Milwaukee, Waukesha, Racine, and Walworth. Her Senate District 28 includes New Berlin, Franklin, Greendale, Hales Corners, Muskego, Waterford, Big Bend, the town of Vernon and parts of Greenfield, East Troy, and Mukwonago. Senator Lazich has been in the Legislature for more than a decade. She considers herself a tireless crusader for lower taxes, reduced spending and smaller government.
The Legislative Audit Bureau (LAB) has finished a limited review of the use value assessment of agricultural land.
To qualify for use value assessment, land must be devoted primarily to agricultural use. All property that meets this definition qualifies, regardless of the owner’s occupation or the purpose for which the land is zoned.”
The LAB review was spurred by recent news accounts that claimed loopholes in the law were allowing non-farmers to benefit inappropriately from owning land that continues to qualify for use value assessment because of temporary cropping, despite being zoned for residential, commercial, or industrial purposes. Concerns have been raised that the perceived loopholes defeat the law’s purpose of preserving farmland. Another concern is that the use value assessment of this land diverts the property tax burden from real estate developers to other taxpayers.
As part of its probe, the LAB analyzed agricultural land classification and assessments in 14 municipalities statewide. The LAB’s findings:
- All agricultural land reviewed met the criteria for agricultural use established in Wisconsin Administrative Code.
- However, more than 6,300 agricultural acres in the 14 municipalities were zoned for non-agricultural purposes.
- More than 3,800 agricultural acres were owned by real estate or property development businesses that might demonstrate a greater likelihood for the land to eventually be sold or developed.
- Following collaboration with assessors in each of the 14 municipalities to estimate the effect of use value assessment on property taxes within their municipalities, the LAB uncovered that “If those communities had assessed agricultural land that is zoned for another purpose at market value in 2009, the owners of the land would have owed a total of $4.7 million in additional property taxes, and the tax liability of other property owners in those municipalities would have been reduced by the same amount. On an individual basis, taxes on agricultural land that is zoned for another purpose would have increased by an average of $3,516, while taxes on all other parcels would have decreased, on average, by $38.”
- Recently, the Legislature enacted the Working Lands Initiative to promote local farmland planning.
As always, the LAB provides valuable direction and advice to legislators by identifying programs in other states, should the Wisconsin Legislature choose to change use value assessment. For example, legislators could limit eligibility based on factors like ownership, income and parcel size, thus ensuring farmers are sole beneficiaries. However, the LAB cautions changes face some obstacles, including varying zoning policies across the state and the possibility of legal challenges to any proposed statute modifications.
You can read the full audit report here.