OZAUKEE PRESS EDITORIAL: Voters to legislators: End the big-box tax dodge

For lame ducks, they sure moved fast.

The members of Wisconsin’s lame-duck Legislature acted last week with amazing speed and a grim determination that kept them working late into the night to pass a package of bills that limit the authority of the incoming governor and restrict early voting.

If only those state representatives and senators had devoted that energy and alacrity to legislation the voters actually want to become law.  

Voters in November made it clear they want the Legislature to give priority to a bill that would close a state tax loophole that lets big-box retailers get away with below-market-value assessments on their properties and shifts more of the tax burden to homeowners and small businesses.

Referendums in 23 counties calling on the Legislature to end the so-called dark-store loophole were passed by overwhelming margins. In the referendum closest to Ozaukee County, 72% of the voters in Washington County approved it. The margin was even higher in other counties; 79% in Kenosha County, for example.

The dark-store loophole was created by a misguided Wisconsin Supreme Court ruling in 2008 that allowed the Walgreens drug store chain to use unrealistically low valuations of its stores in Madison on the grounds that they should be taxed on the value of vacant stores instead of their actual value as determined by the purchase price and rent of the properties.  

Since then, numerous large retailers have exploited the ruling to justify demands for reduced assessments. A study by the Wisconsin Policy Forum found that 79 of the 215 communities in the survey faced dark-store valuation appeals in 2017.

Meijer Inc. has been particularly aggressive. The supermarket and discount store chain has sued Wauwatosa, claiming that based on the dark-store rationale its huge building in that city should be taxed on only about one-fourth of the amount the city determined as the assessed value. The Village of Grafton, home of a sprawling Meijer store, should be concerned.

Wisconsin’s municipalities, counties and towns, through the organizations that represent them, have been strong advocates for an immediate legislative fix for the high court’s mistake, and with good reason—it’s costing them many millions of tax dollars, and the shortfall has to be covered by homeowners and small businesses.

The Legislature once seemed to share that urgency. In fact, bills in the Senate and Assembly that would close the loophole have been ready to go for months. There was so much enthusiasm for passing them that one bill garnered 84 sponsors and another had 61 sponsors. State Rep. Rob Brooks of Saukville and Senator Duey Stroebel of Cedarburg are among them.

Rather suddenly, support for the bills cooled, and they now reside in some file in the Capitol that is probably not marked “urgent.” Some observers have suggested that the loss of interest in protecting communities from the dark-store valuation effect coincided with the announcement by the Wisconsin Manufacturers & Commerce lobbying organization that it opposes the reform bills. The WMC has been a generous contributor to the campaigns of legislators in the Republican majority.

Though he is a member of that majority, Stroebel, to his credit, demonstrated he understands the need to end the dark-store loophole in a statement he issued earlier this year: “Right now, we’re shifting the tax burden onto homeowners because assessors must pretend that the real value of certain commercial properties is lower than it really is.”

That made the issue pretty clear. And so did the votes of the thousands of citizens who approved referendums telling the Legislature to end dark-store giveaways to big-box retailers.

When the new Legislature gets into session, its response better not be lame. Rather, it needs to be quick, decisive action to get a bill to the governor’s desk—in the way those fast-flying lame ducks did last week.

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Ozaukee Press

Wisconsin’s largest paid circulation community weekly newspaper. Serving Port Washington, Saukville, Grafton, Fredonia, Belgium, as well as Ozaukee County government. Locally owned and printed in Port Washington, Wisconsin.

125 E. Main St.
Port Washington, WI 53074
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