Wisconsin’s net property taxes, the sum of all property tax levies minus the state’s school levy credit, were $8.11 billion in 2006-07, up 3.3% from the previous year. An increase in the $593.1-million credit—the first since 1996-97—from $469.3 million helped hold net levy growth to 3.3% despite the larger gross increase. The lottery and gaming credit, another source of property tax relief for homeowners, totalled $144.7 million, up 23% from $117.5 million in 2005-06.

The larger increases in the second year of the freeze were due primarily to accelerating growth in school district property taxes. School levies, long the largest portion of Wisconsin property taxes, rose 5.4% in 2006-07. In the previous year, levies fell 0.5%. In 2005-06, through a large increase in aid, the state was able to "buy down" school taxes. This year, there was no such increase.

Despite the larger property tax increases, the freeze did lead to a decrease in property taxes as a share of personal income. According to WISTAX calculations, net property tax levies fell from 4.35% of total income in 2004-05, the year before the limits were imposed, to 4.21% in 2006-07.

Along with rising property values in 2006, the freeze contributed to a fall in the statewide property tax rate in 2006-07, WISTAX noted. The average net tax rate was $17.30 per $1,000 in full-market property value, down from $18.36 in 2005-06. However, the current slowdown in the real estate market could mean an end to the falling property tax rates of the past 10 years.

Tax rates varied by municipality. Among cities and villages with populations of at least 8,500, La Crosse had the highest overall net rate at $25.03. The City of Pewaukee ($13.11) had the lowest. Among towns of at least 8,500, rates ranged from $11.48 in the Town of Waukesha to $19.23 in the Town of Menasha.

This year’s property taxes were the second to be levied under a state-imposed property tax "freeze" signed into law in 2005. WISTAX researchers found mixed results from the initiative. Although it had a significant impact on counties and municipalities, the effect was smaller on schools and nonexistant on technical colleges. In 2006-07, county levy growth was the smallest in two decades, while municipal growth was the third slowest in 10 years.

Municipalities and counties were generally limited to levy increases of 2% or the percentage growth in property values due to new construction, whichever was greater. There were exceptions for debt service and referenda to exceed the limits. Municipal levy changes varied considerably: more than 10% reduced their levies, while another 8% had double-digit increases.

Of the four major local governments, school district levies rose the most, at 5.4%, followed by technical colleges (4.6%), municipalities (3.5%), and counties (3.2%). Among minor levies, tax incremental financing (TIF) district property taxes increased 11.1%, state forestry levies rose 2.6%, and special purpose property taxes grew 2.3%.

County-purpose property tax levies rose in 71 of 72 counties in 2006-07, with growth ranging from 1.0% in Rock County to 8.0% in La Crosse. The only county with a levy decrease was Racine, where levies dropped 8.2% as a result of a spending shift from the county to its school districts. Including Rock, five counties increased levies less than 2%; the others were Waushara (1.9%), Richland (1.8%), Manitowoc (1.7%), and Waukesha (1.3%).

Technical colleges were the only major local government entity without levy restrictions under the tax "freeze" law. They remain subject to a $2.00 per $1,000 of equalized value operational rate limit. In the last decade, technical college taxes have increased the fastest of the major levies, rising 85.7%, or an annual average of 6.4%.

Though the limits imposed by the "freeze" have expired, new restrictions may be imposed in the 2007-09 budget currently under negotiation in the state legislature. The Democratic majority in the senate passed a version that allows counties and municipalities to increase property taxes 4% or the percentage increase due to new construction, whichever is greater. The GOP-controlled assembly’s version would limit counties, municipalities, and technical colleges to 0%, or the increase in new construction.