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Longitudinal Data - Property Valuation

Overview

Property value is the dollar-value placed on land and buildings for use in the state Equalization Aid formula and for administering property taxes.

What is the difference between Assessed and Equalized Value?

The two commonly-used methods of valuing property in Wisconsin are "assessed" and "equalized."

Assessed valuation

Assessed valuation is property value as determined by the local municipal assessor on January 1 in any given year.

Equalized valuation

Equalized valuation results when the Department of Revenue (DOR) applies an adjustment factor to the assessed value.

The adjustment factor incorporates (among other elements) actual property sales in the municipality during the past year. This "equalization" process is meant to ensure each type of property has comparable value regardless of local assessment practices. Most state computations use equalized value, otherwise known as "fair market" value. Fair market value can be defined as the value that would be agreed upon between a willing buyer and a willing seller in an "arm's length" transaction where neither is required to act.

How do school districts use value?

The first time school districts receive the new-year property value information in an official value certification is in October. The October 1 Tax Apportionment Value Certification is used by school districts to determine municipal tax bills. After October 1, DOR may refine this same set of numbers until a "final" version is issued the following May (almost 1 1/2 years after the date of the assessment). This final version is known as the School Aid Value Certification and will be used in the following year's Equalization Aid formula. So, as an example, property value as of January 1, 2010 will eventually be used in the 2011-12 Equalization Aid computation.

School-Aid and Tax Apportionment Value Formats

Both School-Aid and Tax Apportionment Values are issued in two formats: Tif-In and Tif-Out. "TIF" districts are created and utilized by municipalities to fund property development or redevelopment projects. When a municipality creates a TIF, the value of that property at TIF creation (base-level) is determined. As the TIF property appreciates as a result of the improvements, the value increases. The additional taxes gathered on the increased value are returned to the municipality that created the TIF to help pay for the cost of urban renewal within the TIF district (sewer, water, other improvements, etc.).

Tif-In value includes this increased value and Tif-Out value contains the base-level value for the TIF property (before the improvements). Districts apportion their levy over the TIF-Out property value, as this increased tax base unavailable for taxing by counties, school districts and technical college districts.

School Aid Property Valuation (used in the Equalization Aid Formula)

The amount of Equalization Aid a district receives is generally based on how its value per member (district equalized property value divided by district membership) compares with the state average value per member (all unduplicated equalized value in the state divided by statewide membership). See Membership Report for an explanation of membership.

Equalization Aid Distribution

Equalization Aid is distributed in inverse proportion to district value per member (the more value per member a district has the less Equalization Aid it will receive). The state average value per member is also known as the Tertiary Guarantee, one of three state wealth benchmarks in the Equalization Aid formula.

Equalization Aid Levels

Many factors can affect the level of Equalization Aid a district may receive in any specific year but it can generally be assumed that if a district's value per member (as a percent of the state average value per member) is increasing over time, the district will be receiving less Equalization Aid over time (and the reverse).

The Longitudinal Equalization Aid Value-Per-Member History file contains a multi-year history of district value per member as a percent of the state average value per member. This visual representation will assist viewers in understanding what may be happening to a specific district over time within the Equalization Aid formula.

For questions about this information, contact dpifin@dpi.wi.gov (608) 267-9114