By Kevin Boneske
BROWN COUNTY – The effort to close what’s known as the dark store loophole is among the issues being discussed in the final days leading up to the Nov. 6 general election.
The dark store loophole relates to commercial retailers and manufacturers challenging the assessed value of their properties by claiming they are worth the same or close to the lower assessed value of similar but empty buildings.
Companies which challenged their assessments in court and won have been able to receive a refund with the affected municipalities having to make up the difference with that lost property tax revenue, such as with homeowners having more of the tax burden.
After the effort to eliminate the loophole didn’t pass in the last legislative session that ended this spring, the League of Wisconsin Municipalities (LWM) is now keeping the issue in front of candidates running this year for governor and the state legislature with an issue advocacy campaign funded by itself and member municipalities, including several in Brown County.
The LWM held a news conference Oct. 17 at the Ashwaubenon Community Center, where around two dozen municipal and county officials in support of League’s effort were also on hand, and called on the gubernatorial candidates to include a provision in the next state budget to end the loophole.
“Cities, villages, towns and counties statewide are in the midst of preparing their 2019 budgets and are acutely aware of the need to fairly share the cost of local government services among all property owners,” states a letter the LWM drafted and sent to Gov. Scott Walker and State Superintendent Tony Evers, the respective Republican and Democratic candidates for governor. “We know you agree that homeowners should not and cannot bear more of the tax burden than they already do, which is nearly 70 percent of the total state levy.”
LWM Deputy Director Curt Witynski said Evers, who spoke at the League’s annual conference Oct. 25, indicated he would include a provision to close the dark store loophole in his first state budget, while Walker has not made the same statement, but did say earlier this year he would support such legislation if it reached his desk.
Local municipalities have been dealing with corporations seeking to use the dark store loophole to reduce their property tax assessment.
For example, in the village of Howard, a difference of nearly $6.5 million exists between what the Woodman’s store at 2400 Duck Creek Parkway has been assessed for by the village and what the company claims it is worth.
In court documents alleging Woodman’s is entitled to a refund because of excessive real estate taxes, the company claims the 2018 value of the property, where it is a tenant and responsible for paying the taxes, is no more than $5.25 million.
However, the 2018 property value was assessed by the village at $11,743,300.
“There’s very little risk to Woodman’s to let a lawyer represent them for free, and it’s not fair to the rest of the taxpayers who don’t have that same advantage,” said Howard Village Administrator Paul Evert.
The city of De Pere has also faced legal action related to the dark store loophole, as was the case with the Shopko distribution center.
“We’re hoping that we can get (legislation to close the dark store loophole) to the floor of the legislature,” said De Pere Mayor Mike Walsh. “The votes are there. That was demonstrated in the last session, but it never made it. So we need to get the support of the legislators and administration to get it there.”
The LWM held a Dark Store Day last December to urge people to contact their legislators in favor of ending the loophole.
“We were here (at the Ashwaubenon Community Center) almost a year ago to the day talking about this issue,” said Ashwaubenon Village President Mary Kardoskee. “We need to get this closed, get it on the floor and get it for a vote, so we can stop shifting the tax burden.”
Wisconsin Manufacturers and Commerce opposed ending the dark store loophole in the last legislative session and has claimed eliminating it “would just make it easier for aggressive assessors to raise property taxes on businesses.”
Brown County will be one of 17 counties in the state to hold an advisory referendum Nov. 6 on the dark store loophole.
The referendum’s wording states, “Should the state legislature enact proposed legislation that closes the Dark Store loopholes, which currently allow retail properties to significantly reduce the assessed valuation and property tax of such properties, resulting in a substantial shift in taxes levied against other tax paying entities, such as residential home owners, and/or cuts in essential services provided by an affected municipality?”
Evert said the timing is really good for a campaign to end the dark store loophole with the county’s advisory referendum on the ballot.
“People need to read the question,” he said. “There’s a lot research material you can look at out there on the League site, a nice video that shows the difference.”