Tax bills arrived in the mail this week for property owners in Janesville.
In their tax bills due in 2023, most city property owners won’t see much change from what they paid in 2022. The city’s portion of the tax rate is up, while the Janesville School District and Rock County portions are down, mostly negating each other.
Looking ahead, 2024 and 2025 could be a changing story. Some things ahead, that we’re keeping an eye on, could affect city, county and school district budgets and end up reflected on tax bills.
Both the city council and county board voted this fall to authorize drawing from reserves to fund 2023 budgets. Neither may ultimately tap into those rainy day accounts, but both took that step in order to adopt a balanced budget.
With inflation and what some city leaders have called an inconsistent distribution of state shared revenues in Wisconsin, the city council authorized, as it adopted its $61 million 2023 budget, drawing $1 million from its reserves. The Rock County Board similarly voted to authorize taking $5.6 from its reserves and also applying $2 million in excess sales tax to balance its $218 million 2023 budget.
Either may tap those reserve funds as needed as the year progresses, up the authorized amount. But if economic headwinds worsen with a 2023 recession, either could vote to tap their reserves deeper than that, on an emergency basis. That’s unlikely to happen. But how a recession could affect city and county reserves heading into 2024 and 2025, is something to watch.
To be fair, the city ended 2022 with about $1.2 million in excess funds that were returned to its coffers, and its tax rate is low in comparison to many other like-sized cities in Wisconsin, demonstrating the council’s fiscal accountability.
But for city taxpayers, new costs may also be ahead. If the anticipated $50 million Woodman’s Sports and Convention Center is approved, construction debt and operating expenses may be reflected on tax bills by 2025. Some costs would be funded privately. But any city construction debt could impact its budget for two decades, and operating expenses could become an annual city cost.
Granted, the city is already operating an ice arena. Costs would be higher at the new center, due to its size, but there is already an operational line-item in the budget. User fees and other new revenue tied to the new center could further offset costs.
And we recognize the potential broader economic benefit of the proposed Woodman’s Center, in bringing in sports tournaments and conventions whose participants might stay in hotels and patronize other businesses.
But the project will require a tax investment, at least initially.
Finally, the city is now kicking off a revaluation that could affect 2024 tax bills for Janesville property owners, depending on whether their home rises or falls in value in that process.
On the county portion of the tax bills, meanwhile, property owners are going to start seeing an impact from the nearly $100 million Rock County Jail expansion, upon which construction is now underway.
And Janesville School District’s current operating referendum will expire in 2025. District taxpayers are likely to hear as 2023 progresses about a new operating referendum on the ballot sometime in 2024.
The Janesville School District saw its portion of the tax rate drop this year, due in part to state revenue caps that require the school districts to hold spending below a certain line, unless authorized by a referendum. Meanwhile, rising local home values have allowed the school district’s portion of the tax rate to drop while the district’s total tax levy stays consistent.
But like other school districts across the state, Janesville has been challenged by the state biennial budget that held the line on both per-pupil aid and revenue limits. And it has been challenged by inflation-fueled rising costs. And in an additional coming impact, federal COVID-19 relief funds that flowed into school district coffers nationwide in significant amounts, are sunsetting. Those must be spent by 2024.
As so, while little on their 2023 property tax bills might sound an alarm bell, Janesville taxpayers might want to pay attention as the new year unfolds, to factors that might affect taxes in 2024 and 2025.
