Understanding the City of Marshfield’s City-Wide Revaluation: Your Frequently Asked Questions Answered

City of Marshfield Property Owners Receive Notice of Real Estate Assessment

MARSHFIELD, WI (OnFocus) – Property owners in Marshfield are receiving a Notice of Real Estate Assessment in the mail this month. The most common question surrounding this seems to be: What does this mean for my taxes? The answer: It’s complicated.

In an effort to help explain the complicated, we’ll take this piece by piece.

What is a Real Estate Assessment Revaluation?

The revaluation is the process of replacing outdated assessments with new assessments that better reflect market value (i.e. what each property could sell for on the open market). The value of property changes and the City is required to keep accurate records of these values.

The Wisconsin Department of Revenue requires a revaluation be performed when the overall level of assessment is less than 90% or more than 110% of market value in five consecutive years. The DOR determined Marshfield’s overall level of assessment to be out of compliance and in need of revaluation for 2023.

In Marshfield, several property owners are seeing an increase in value.

“The main reasons for the large increase that many property owners are seeing would be it has been 13 years since our last revaluation in 2010; and, during that time period (especially over the last few years), real estate prices have increased significantly in the general housing market,” explained Steve Barg, City Administrator.

City Tax Bills Explained Generically

Think of city taxes like a bill you have to pay for living in the city. This bill is based on how much your property is worth and how much money the city needs to run everything, like schools, roads, and services.

Your property’s assessed value is an estimate of how much your property is worth. It’s used to figure out how much you should contribute to the city’s budget. The tax rate is like a percentage that’s applied to your assessed value to calculate your taxes.

During the revaluation process, when the city is re-evaluating everyone’s property values, the exact tax rate can’t be determined right away. This is because the city’s budget isn’t set in stone yet. The city needs to figure out how much money it needs and then divide that by the total value of all properties in the city.

If your property’s value goes up because of the revaluation, it doesn’t necessarily mean your taxes will go up, too. It’s a balancing act. If your property is worth more, the city might adjust the tax rate down a bit to make sure your taxes don’t skyrocket. So, even if your property is worth more, your taxes might not go up by the same amount.

When your property’s value changes, it doesn’t mean your taxes will change in the same way. The city figures out how much money it needs, and if your property value goes up, they might adjust the tax rate so that your overall taxes don’t increase too dramatically.

The City Budget Process Explained

Every year in the fall, the City Council needs to decide on how much money the city will spend and where it will come from. Before this decision is made, City leaders and departments start working on this plan in June. They put all the information together, and the City Administrator suggests a budget plan to the Council.

In October, the City Council has several meetings to discuss the budget plan. Then, there’s a special meeting where anyone from the public can come and share their thoughts about the budget. After that, the Council makes the final decision to approve the budget.

The budget outlines how much money the city will get and how it will spend that money. The city’s property tax rate, which determines how much people have to pay in taxes, is based on this budget plan.

The City Administrator’s budget plan is the main document that shows how the city will spend its money. The budget plan has to be followed, unless the Council agrees to change it later. They can move money from one part of the budget to another, but they need a special agreement (with 7 out of 10 votes) to do that.

Making it More Complicated: Levy Limits Explained

A state levy limit, often referred to as a “tax levy limit,” is a legal or statutory restriction placed on the amount of revenue that a local government, such as a city or county, can collect through property taxes or other specified sources. The purpose of a levy limit is to control and cap the amount of money that a local government can raise from its residents and businesses, ensuring that property tax increases are kept within certain bounds.

Levy limits are typically imposed by state governments as a means of fiscal restraint and to prevent excessive tax burdens on taxpayers. These limits are designed to promote responsible financial management by local governments and to provide a degree of predictability and stability for taxpayers.

Here’s how a state levy limit generally works:

Calculation: The specific calculation for determining the levy limit can vary from state to state, but it often involves factors such as inflation, population growth, or a fixed percentage increase.

Cap on Revenue: The levy limit sets a maximum amount of revenue that a local government is allowed to collect from property taxes or other specified revenue sources.

Budgeting Constraints: Local governments must operate within this revenue limit when creating their budgets. They cannot exceed the limit without taking certain steps, which might involve seeking voter approval through referendums or making adjustments to their spending plans.

Exemptions and Overrides: Some states allow local governments to exceed the levy limit under certain circumstances, such as in cases of emergencies or specific voter-approved projects. These exemptions or overrides are typically subject to specific rules and processes.

Compliance and Reporting: Local governments are usually required to report their budget and tax levy information to the state government to ensure compliance with the levy limit laws.

The goal of a state levy limit is to strike a balance between funding essential public services and preventing property tax increases from becoming excessive. While levy limits can provide stability for taxpayers, they can also pose challenges for local governments that need to fund critical services and respond to changing needs. As a result, discussions and debates around levy limits often involve considerations of fiscal responsibility, local government autonomy, and the provision of public services.

“The total amount that the City can collect through property taxes is greatly limited by the State’s levy limits. The only noteworthy addition to what the City may collect is based on ‘Net New Construction.’ This allows the City to increase its tax levy by a percentage (60%) of its net new growth to help offset the cost of extending services to cover new development,” explained Barg. “For 2023, this percentage was .55%, which means that if we collected X dollars in total tax levy from our property owners in 2022, we were only allowed to collect X, + an additional .55% of X, in 2023. As a result, what revaluation basically does is to re-carve the existing pie, not provide a windfall of revenue to cities.”

Putting it Together: Assessments & Taxes

City taxes are determined by multiplying the property’s assessed value by the tax rate, which is influenced by the City’s total valuation and budget. Tax rates cannot be precisely calculated during the revaluation process, as they depend on budget adjustments after property values are set.

Property value changes resulting from the revaluation do not directly correlate to changes in taxes owed. A property’s value going up does not necessarily lead to higher taxes. Taxes are determined by the total valuation and budget. A higher valuation may be balanced by a lower tax rate, mitigating potential increases.

For example, if the average assessment increased by 25% (this number is theoretical), a property owner whose assessed value increased by 25% would theoretically (all else being equal) pay the same amount of taxes as the year before. If one of his/her neighbor assessed value increased by 20%, that person’s taxes would decrease, and the neighbor to the other side whose assessed value increased 30% would experience an increase.

An increase or decrease in assessed value does not necessarily mean an increase or decrease in property taxes.

“Put simply, we are basically going to collect the same amount of tax revenue as the previous year; however, there will be individual ‘winners and losers’ from among taxpayers,” explained Barg.

Some property owners may see a decrease in both value and taxes owed, some may see an increase in both value and taxes owed, and some may see an increase or decrease in value and the opposite in taxes owed.

A property’s value going up does not alone cause a higher tax amount owed.

Here are sample numbers to illustrate this concept:

Total Budget = $20,000,000
City Valuation Total = $1,000,000,000

Tax Rate (Mill Rate): $20,000,000 divided by $1,000,000,000 = $.0200 (or $20.00 per thousand)

For a home valued at $150,000, the taxes owed would be $3,000.

Now, let us suppose the sample underwent a revaluation.

Total Budget = $20,000,000
City Valuation Total = $1,100,000,000

Tax Rate (Mill Rate): $20,000,000 divided by $1,100,000,000 = $.0182 (or $18.20 per thousand)

For the home valued at $150,000, the taxes owed would be $2,730.

It is important to remember, that during a revaluation all property values are adjusted
closer to market value. If the home was reassessed from $150,000 to $165,000, the taxes owed would be $3,003 (similar to the taxes owed prior to the revaluation).

It’s also important to note that the Assessor’s Office is strictly tasked with attaining accuracy in valuation. This is true both of revaluation years and non-revaluation (“maintenance”) years. Technically, taxes and budget are outside the scope of the Assessor’s Office. The total tax rate includes other taxing entities such as the Marshfield Schools, Technical College, and Wood or Marathon County.

Bottom Line:

Marshfield property owners would not see an increase in taxes directly because of this assessment. They could see an increase in taxes due to an increase in the tax rate.

If a Marshfield property owner’s property value went up and they do not want their taxes to go up significantly, they need to talk to their Council representative and ask them to keep the tax rate as low as possible.

The change in taxes (if there is one) would be starting with 2023 taxes paid in 2024 (i.e. the tax bills that go out in December 2023).

Find the City Budget here.
2023 Budget changes here.

What Property Owners Can Do About Assessment Values

Property owners can review property data at www.assessordata.org, and those with questions or concerns can contact the City of Marshfield Assessor’s Office at any time at 715-384-3856 or [email protected].

To appeal an assessment, first contact the City Assessor. For more information on appealing, visit this website.

Most importantly, pay attention to City government and budget meetings. If a property’s assessed value is accurate, one way to mitigate tax increases is to control the Mill Rate. This is done by the City of Marshfield Common Council.

Important Dates:

An Open Book session will be held August 28-30 from 9:00am-3:00pm at City Hall. Open book is a set period of time for property owners to contact our office with questions regarding their new values. After notices are mailed, property owners with questions are encouraged to contact our office via phone or email. If a property owner wishes to meet with an appraiser in person, an appointment will be set up to discuss their property.

The Board of Review will meet September 7 at 8:00am in the Council Chambers.
A property owner who still disagrees with the assessed value has the right to appear before the Board of Review. This board acts like a court by taking oral testimony from the property owner and the Assessor’s office. The board then makes decisions based upon the evidence presented. The Assessor’s value is presumed correct unless compelling contrary evidence is presented. Information on board of review and how to object to your valuation will be referenced on each notice of assessment and is available on the Department of Revenue’s website.

We welcome your stories! Contact us at [email protected]!