County Budget

1
County Budget
Retain essential personnel
.8 Mil
9 Million2007 Sales Tax(8.1 million from
residents .9 million from nonresidents)
Direct Property tax relief from county property
tax(12 reduction)(.65 cut in rate)
7.4 Million
Indirect property tax relief from city, town and
village taxes
.8 Mil
Cities, Towns Villages
5 per capita
Moderation of new fees or retention of essential
personnel
2

• The average home in Winnebago County has grown in
  value to about 124,000.
• That is a 3.8 increase from 1/1/05.
• With the maximum equalized rate under the levy
  freeze, the average homeowner will see a 40
  increase on their County property tax from the
  prior bill
• If the property tax relief/sales tax proposal is
  adopted, the average homeowner will see a 55
  decrease on their County property tax from the
  prior bill

3

• To determine your individual benefit of the
  property tax relief/sales tax, you need to know
  how much your household spends on items subject
  to sales tax and the fair market value of your
  property.
• Remember that debt payments, groceries, medicine
  and most services are not subject to sales tax.
• Also note that the sales tax would not begin
  until April 1, 2007.

• Sales tax will vary widely from household to
  household but a rough average would be 43 of
  your Gross Income times .005 times 9/12.

4

• The property tax savings can be estimated by
  taking the fair market value of your home divided
  by 1000 times .76

• Example124,000 fair market value/ 1,000
  124x .76 94.24

5
For most households, the property tax savings and
sales tax will net out to small amounts.

• This means that a household with 4000/month
  gross income, with a home worth 124,000 might
  expect to pay 73.80 in county sales tax and to
  save 94.24 in property tax.

94.24 (Property Tax Relief) - 73.80
(Pay in County Sales Taxes) 20.44 Savings
Example based on median household income and
median home price. Actual results will vary
according to circumstance.
6

• Property tax savings will start with your tax
  bill due in January, but sales tax will only
  occur as you make purchases subject to sales tax
  on or after April 1, 2007.

• Homeowners on tight budgets such as retirees on
  fixed incomes, families with children in college,
  and people with large medical bills, will likely
  save money while others with large disposable
  incomes may pay more.

• Renters are generally believed to pay property
  taxes through their rent which should rise less
  with property tax cut.

7

• Year after year local property taxpayers have
  carried a larger share of county expenses.
• Under state imposed levy rules, Winnebago
  countys equalized tax rate will increase in 2007
  unless a sales tax is adopted.

Property tax relief is needed in 2007
8
How Do Property Taxes in Counties Without Sales
Tax Compare to the State Average?

• The 10 counties without a county sales or stadium
  tax have an average equalized property tax rate
  of 6.05.
• The statewide average equalized property tax rate
  is 4.01.

9
How Do The Rates in Growth of the Property Tax
Base Compare?

• The growth in the property tax base in the ten
  counties without a sales tax averaged 6.84.
• The statewide average was 9.59.
• Each of the 10 counties w/o sales or stadium tax
  were below the average rate of fair market
  growth.
• The relationship is probably not causal but
  clearly the sales tax does not harm growth in
  fair market value.

10
Tourism in Winnebago County

• Winnebago County ranks 14th in tourism among
  Wisconsins 72 counties.
• In 2005 tourists spent over 230 million in this
  county.
• Winnebago county residents pay higher sales taxes
  when visiting 62 other Wisconsin counties than
  those countys residents pay when they visit here.

11
Tourism in Winnebago County

• More tourists visiting Wisconsin come from
  Minnesota and Illinois than any other states.
• Illinois sales tax is 6.25.
• Minnesotas sales tax is 6.5 (9 on alcoholic
  beverages and 16.2 on rental cars).
• Tourists impact road maintenance, public safety,
  and sometimes the courts.

12
The last county to adopt a sales tax will have
charged its residents more property taxes and
provided them with less services for the benefit
of tourists who will not even be aware that they
are being favored at the expense of local
residents.
13
Who Benefits Most From a Shift Between Property
Taxes and Sales Tax?

• Property owners with modest incomes, high medical
  expenses, or children in college.
• Farmers who are often land rich and cash poor.
• Manufacturers and their workers because materials
  and energy used in production are not subject to
  sales tax.

14
How Would Sales Tax Revenues Be Used?

• 82 would be used for direct property tax relief.
• 9 (tourist share) would be used to preserve
  essential County services.
• 9 would be transferred to cities, villages, and
  towns on a per capita basis to preserve essential
  services, to hold down fees, or to give
  additional tax relief as their leaders think best.

15
Tourist Dollars

• the amount of new revenue retained by the County
  will be roughly equal to the sales tax revenue
  from tourists.
• The County will continue to reduce its workforce
  and bargain for smaller pay increases.
• This will reduce the portion of County spending
  raised from property tax, reversing a long-term
  trend.

16

• To keep faith with County taxpayers, the adoption
  of Property Tax Relief and a County Sales Tax
  must be accompanied by miserly control of County
  spending

17
Why Does the Sales Tax Need to Be Adopted Now?

• Essential local services are at risk because of
  the levy freeze combined with the past
  thriftiness of area Government.
• State Legislators continue to flirt with revenue
  limits that might cut off the sales tax option in
  the future. This will benefit visitors at a
  local property taxpayers expense.

18

• With or without a sales tax, it is time for
  elected officials to bring ongoing revenues in
  line with ongoing expenses. Continued use of
  one-time solutions to structural budget
  imbalances will put the Countys future at risk.

19
Will Taxpayers Accept Property Tax Relief and a
Sales Tax?

• 59 counties have adopted a sales tax between 1986
  and 2006. There is no serious movement in any of
  those counties to reverse that decision.
• None of those counties have shared the revenue
  with cities, towns, or villages.

Note 3 counties w/o sales tax have a stadium
tax and some counties have both taxes)
20
In the 2006 budget 43 positions were eliminated
and raises and benefits were reduced for all
non-represented employees. The County Executives
2007 budget proposal will eliminate 19 more
positions (most through attrition) and the
budgeted wages assume much smaller raises will be
negotiated in the new union contracts.
21
A balanced budget without the property tax
relief/sales tax proposal will require additional
spending cuts.
775,000 to stay within the levy freeze
limits
1,177,000 to avoid raising the equalized
rate
2,247,000 to hold county property tax bills
to a zero increase for the average homeowner.
4,199,000 This is in additional cuts beyond
those made in the proposed budget.