(Published Friday, March 23, 2007 10:25:22 AM CST)
A d v e r t i s e m e n t
By Todd Richmond Associated Press
MADISON, Wis. - Homeowners could save tens of millions of dollars thanks to a bill state lawmakers introduced Thursday that would strictly limit property tax exemptions for waste treatment facilities and equipment.
State law has provided a property tax break for waste treatment facilities and equipment for more than 50 years. The new bill is designed to block manufacturers that convert waste into sellable products, such as paper mills, from claiming the exemption and forcing municipalities to raise taxes elsewhere, said Sen. Rob Cowles, R-Green Bay, one of the bill's authors.
The measure comes in response to a state Tax Appeals Commission ruling in 2004 that extended the exemption to all property owned by Paperboard Corp. in Milwaukee. That company contended it deserved the break because it transforms waste paper into cardboard.
A Dane County judge upheld the ruling, and $11 million of Paperboard property wasn't taxed.
Local government officials fear more companies could follow Paperboard's lead and get the tax break. That could force municipalities to raise taxes on homeowners and other businesses to make up the lost revenue, said Rich Eggleston, a spokesman for the Wisconsin Alliance of Cities.
"The scope of this, if the law doesn't change, it could be a 'me, too' sort of thing," Eggleston said.
Two other companies, Fox River Fiber Co. in De Pere and Green Bay Packaging, have qualified for the exemption on the same grounds as Paperboard Corp., resulting in the loss of about $23 million in property taxes, according to the nonpartisan Legislative Fiscal Bureau. The Department of Revenue is weighing applications for the exemption from eight other companies.
The bipartisan bill would rework state law so only a facility or equipment that exclusively and directly treats waste would qualify for the exemption.
One of the bill's authors, Sen. Dave Hansen, D-Green Bay, accused manufacturers of trying to exploit a loophole that the tax commission's ruling created.
"The decision was not fair to the property taxpayers of this state," Hansen said.
Pat Schillinger, president of the Wisconsin Paper Council, refused to call the commission's decision a loophole.
"This was judicially interpreted use of the law," he said, adding companies take advantage of any legal breaks they can get, just as any taxpayer would.
The exemptions are crucial in his industry, which is struggling to survive against foreign competition, he said. The council will keep trying to broker a compromise such as exempting a portion of a company's property from taxes, he said.
Still, government should take a lesson from the private sector and scale back its budgets, he said.
"Faced with shrinking revenue, the response is not to try to cut costs," Schillinger said. "It's 'OK, we'll just legislatively change this process, this issue, overturn a court decision so the tax authorities can continue to receive more revenue."
Both Green Bay Mayor Jim Schmitt and Appleton Mayor Tim Hanna called the bill a good fix.
"It's what we're looking for," Hanna said.
Senate Majority Leader Judy Robson, D-Beloit, will push for passage in her house, her spokesman said. A message left at the office of Assembly Speaker Mike Huebsch, R-West Salem, wasn't immediately returned.
Democratic Gov. Jim Doyle, who can sign the bill into law or veto it, is reviewing the measure, spokesman Matt Canter said.
