Before I get to the gist of this blog
I have to share that I laugh when petty critics of Franklin Mayor Steve Olson insist that I’m his ‘campaign manager.’ (Olson is running for re-election this spring and I wholeheartedly support him.)
Such a ridiculous statement about me being a ‘campaign manager’ is not surprising coming from people who have no idea what the hell they’re talking about.
No, I’m not Olson’s campaign manager. Haven’t been paid to speak out on his behalf. Never. Not once. I’m just a lowly volunteer.
But I can tell you who is Olson’s campaign manager.
Honest and truly.
Are you ready?
Olson’s campaign manager is …NOBODY.
HE DOESN’T HAVE ONE!
It ain’t me, babe. In fact Olson and I don’t always concur.
Case in point: the ongoing court fight in Wisconsin over so-called dark stores.
The Council of State Governments wrote last October:
Dark store theory is championed by many “big box” stores like Walmart and Meijer, asserting that for tax assessment open, bustling stores are equivalent to ones that failed and closed. This means that during the assessment process, a commercial property should be compared to a shuttered warehouse rather than an open store. Companies justify this approach by arguing that stores are designed in such a specialized way that the property will lose much of its value as soon as the company leaves. They argue that these properties should be appraised according to how the next occupant may use it.
This dispute involves assessing stores built under contract by third-party developers and then leased by retail stores. Walgreens maintained two locations with 60-year leases which obligated the company—rather than the developer/owner—to pay property taxes. The city of Madison considered Walgreens’ lease payments as a form of income (i.e., “income approach”). Walgreens argued those payments significantly exceeded market value because the lease payments reflected additional expenses associated with the initial sale-lease transaction including construction, land purchase and financing.
Lower courts decided in the city’s favor, but the Supreme Court of Wisconsin reversed. The court referred to Section 70.32(1) of the Wisconsin Statutes which stated properties should be assessed “in the manner specified in the Wisconsin property assessment manual.” This manual states the assessors should use market rent rather than contract rent. The justices concluded that the power to determine the appropriate methodology for valuing property for taxation purposes lies with the legislature.
In the past I have blogged:
Kudos to the Racine Journal Times, that while I believe leans in favor of closing the loophole, still had the principles, unlike the local tax and spenders, to give readers the chance to consider two rather than one viewpoint.
“While no one wants homeowners to have to pay more in taxes, we also don’t want to scare away businesses because of taxes.”
Congrats to whoever left a thoughtful comment on the Eau Claire Leader Telegram website (the paper inexplicably doesn’t identify him/her). The unknown writer calls ripping retailers that try to work to their own advantage “misplaced frustration.”
The comment continues, “Real frustration should be directed at the state level, where Republicans have refused to allow a vote on closing the so-called dark-store tax loophole.”
Here’s where I give the writer (who wants the Legislature to ultimately settle this) huge credit:
“Until then, it would be good for local governments to consider reducing their expenses rather than passing any additional tax burden onto homeowners or small business. Those who take every opportunity to reduce personal or business taxes should be celebrated, not attacked.”
And here’s more from the Wisconsin Manufacturers and Commerce:
- There is no loophole. Local governments argue that the so-called “dark stores loophole” allows businesses to lower their property tax assessment by comparing newly constructed occupied properties with vacant dilapidated properties. This is a myth because this type of comparison is already illegal. Advocates of the legislation are looking to tax business value. They argue occupancy (i.e. business value) makes a property worth more and that value should be taxed.
- There is no tax shift to homeowners. The shift has actually gone in the opposite direction. Over the last decade, commercial and manufacturing property owners in Wisconsin have seen over a two percent increase in their share of the property tax burden statewide, while homeowners have seen a reduction.
- This bill will double tax businesses. The property tax is meant to tax real property – the land and building – not income. However, this bill would transform Wisconsin’s property taxation system into a local income tax because it will allow business value and intangible assets like financing agreements to be taxed through the property tax in addition to the fair market value of the land and building.
Fast forward to today (February 21,2023) and the latest:
“Why Wisconsin municipalities see ‘major victory’ in state Supreme Court ‘dark store’ decision
If your read careully this is not a slam dunk pop the champagne ruling. Franklin’s Stetve Olson contends it’s a huge win for taxpayers. I foresee more cases ending up in court.
I repeat what that Eau Claire letter to the editor wrote:
“…it would be good for local governments to consider reducing their expenses rather than passing any additional tax burden onto homeowners or small business. Those who take every opportunity to reduce personal or business taxes should be celebrated, not attacked.”Why Wisconsin municipalities see ‘major victory’ in state Supreme Court ‘dark store’ decision
If your read careully this is not a slam dunk, pop open the champagne ruling foir local units of government. Franklin’s Steve Olson contends it’s a huge win for taxpayers. I foresee more cases ending up in court.
I repeat what that Eau Claire letter to the editor wrote:
“…it would be good for local governments to consider reducing their expenses rather than passing any additional tax burden onto homeowners or small business. Those who take every opportunity to reduce personal or business taxes should be celebrated, not attacked.”
Amen, whoever you are.
So Steve Olson and I disagree.
I’m still enthusiastically voting for him come April.
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