Janesville officials voice support for assessment legislation
JANESVILLE—The city has joined nearly 40 other Wisconsin municipalities in supporting legislation that city officials said could prevent property taxes shifting to residents.
The Janesville City Council and city officials have voiced support for two bills.
The first would prevent comparing a business to a vacant or “dark” store when assessing its value for property taxes.
The second would reverse a 2008 Wisconsin Supreme Court decision that controls how assessors value Walgreens, CVS and other single-tenant stores.
Since 2011, 33 Janesville entities—including Bliss Communications, which owns The Gazette—have appealed their property value assessments. Among those, six used the dark store theory to argue their assessments should be lowered, according to a summary provided by the city.
Of the six, the city settled two with Target and Sears. Two lawsuits from Bank Mutual and CFT Development doing business as Panda Express and Firehouse Subs are pending. Litigation with Farm & Fleet was withdrawn, and a settlement with Menards is pending and soon will be finalized, according to the summary.
In total, the dark store strategy has cost the city more than $281,000 in legal fees and refunds, accounting for a nearly $9 increase in the tax bill for the average home, according to the summary.
While Janesville will get the money it needs to operate regardless, officials said it's unfair for businesses to argue this theory to lower their assessments, thereby requiring taxes on other properties, including homes, to make up the difference.
“We're charged with providing the best quality services and programs to our citizens for the best value, and with that shift onto the residential property taxpayers, it's a fairness issue,” said Maggie Darr, management information specialist for the city.
The bill being circulated by Rep. Rob Brooks, R-Saukville, and Sen. Roger Roth, R-Appleton, would codify language in Wisconsin law and the Wisconsin Property Assessment Manual to clarify that assessors can't compare a property to a vacant store when determining its assessed value.
“We just see this continuing to be a bigger and bigger problem. It's great that it's getting traction and something's actually being done,” Darr said.
When Janesville settled the Target and Sears dark store litigation, the refunds were paid by the city. A 2016 legislation change allows Janesville to charge other taxing jurisdictions their proportionate shares when issuing refunds from assessment appeals.
The city has started talks with other jurisdictions to see if they'd be willing to fund future lawsuits, considering they now have a stake in the outcome, City Assessor Michelle Laube said.
The other bill, sponsored by Brooks and Sen. Duey Stroebel, R-Cedarburg, would require assessors include lease values when assessing property.
Walgreens and CVS, who lease to themselves, claim to have inflated lease prices that shouldn't be included when determining the properties' values. However, the businesses use the inflated prices when selling and exchanging properties, Laube said.
The bill would reverse the court decision and allow assessors to include lease amounts in the valuation process.
Janesville hasn't yet had to deal with such a case.
“Not discarding that it couldn't happen, but with this legislation, we would kind of protect ourselves further,” Laube said.
City Manager Mark Freitag wrote an email to Sen. Janis Ringhand, D-Evansville; Sen. Steve Nass, R-Whitewater; Rep. Debra Kolste, D-Janesville; and Rep. Amy Loudenbeck, R-Clinton, urging them to support both bills. So far, only Kolste has replied saying she'll co-sponsor them, Darr said.
City officials encouraged residents to contact their representatives in support of the bills.