Ending Agricultural Use Assessment Abuse

Agriculture is one of Wisconsin’s most important industries, and various state laws are intended to protect existing farms from urban encroachment. For example, Wisconsin, like many other states, assesses agricultural property for property tax purposes based on its use value rather than its market value. Assessing farmland by its use value protects existing farmers from forced sale of their land when urban encroachment raises the market value of the farmland.

Existing farmers are not the only ones benefiting, however, from agricultural use assessments. Both local and national media outlets identified a growing problem: agricultural use assessment abuse. [See here ; here ; and here.] Wealthy developers and property owners put their property to agricultural uses so that the property benefits from a use value assessment instead of a market value assessment. The use assessment often results in considerable tax savings. Most coverage of the issue criticizes the practice, but either describes the practice as a loophole or implies that local government units are powerless to do anything about it.

Most coverage fails to recognize, however, that local communities can put a stop to much of the abuse. Many new agricultural uses implemented simply for the tax benefit violate existing local zoning ordinances. The Wisconsin Department of Revenue says that tax assessors must assess agricultural land by its use value even if the agricultural use violates local zoning ordinances.

The Wisconsin Department of Revenue also says that local communities can stop the abuse by enforcing zoning ordinances. There are various reasons why communities choose not to pursue enforcement. Communities may fear that an enforcement action could bankrupt a developer which would then prevent the completion of a stalled project. Local leaders may not want the political risk involved in taking on wealthy developers or residents. Regardless of the reason for avoiding enforcement, communities are not powerless to reduce agricultural use assessment abuse.

Agricultural use assessment abuse is not a victimless transgression. Illegal agricultural use assessments harm other property owners by either shifting the tax burden to other property owners or forcing local governments to reduce services. During these difficult economic times, local governments must make many difficult choices. Local governments should not, however, allow illegally obtained tax breaks.

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An Analysis of the 7th Circuit’s Wisconsin Act 10 Anti-Public Sector Collective Bargaining Law Decision

On Friday last week, the 7th Circuit in Wisconsin Education Association Council vs. Walker (7th Cir. Jan, 18, 2013), affirmed in part and reversed in part the Western District of Wisconsin’s decision in the same case.

The case involves the now-infamous Wisconsin Act 10, which came to international prominence in February 2011 when Wisconsin Governer Scott Walker, under the pretense of a budget crisis, sought to attack public unions by passing legislation which would deny collective bargaining rights to most public sector employees in the state.

That only “most” public sector workers in Wisconsin were covered by Act 10 – most general public sector employees were, but most public safety workers were not – became the basis of the federal constitutional challenges under the First Amendment free speech clause and the equal protection clause in this case.

The Western District of Wisconsin held that Act 10’s distinctions between different types of employees passed constitutional muster as far as the general anti-collective bargaining measure because it met the low-threshold rational basis review standard (there was a legitimate reason for such distinctions). On the other hand, the District Court struck down the anti-dues checkoff and punitive recertification provisions of the law as being without any legitimate basis.

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Fining Felons and Felling Trees to Fill our Public School Libraries

Section 16 ImageLast year, a total of $32.5 million were distributed to Wisconsin’s public school libraries thanks to a land grant ordinance that predates the United States Constitution. This little known gift from the Confederation Congress has a fascinating history that reflects the high value placed on public education since our nation’s inception.

The founding fathers believed that public education was the surest way to prepare citizens to exercise the freedoms and responsibilities of our “republican form of government.” As such, the Land Ordinance of 1785 granted every new state one square mile of land within each township (specifically designating “section sixteen” on each township’s newly surveyed thirty-six section plat map) “for the maintenance of public schools . . . .” The sentiment behind this grant was reiterated in the Northwest Ordinance of 1787, which announced that “schools and the means of education shall forever be encouraged.”

Despite their enactment prior to the ratification of the United States Constitution in 1789, these two landmark ordinances continued to govern the process of states’ accession into the Union for many years to come. As such, when Wisconsin was in pursuit of statehood over seventy years later, the Wisconsin Enabling Act contained a provision that the “section numbered sixteen, in every township . . . shall be granted to said state for the use of schools.” This resulted in nearly 1.5 million acres of federal land being handed over to a young State of Wisconsin for the creation of its public school system. Although much of this land was quickly sold to new settlers, Wisconsin’s schoolchildren still enjoy its dividends today.

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