The equalized values are based on data from January 1, 2009 and January 1, 2010, when the national economy and housing market dipped to its lowest point. In Wisconsin residential property values fell by 3.5 percent, or $12.9 billion, over that time period.
Equalized values are calculated annually to ensure statewide fairness and equity in property tax distribution. An equalized value represents an estimate of a taxation district's total taxable value, and provides for the fair apportionment of taxation district levies (including school districts and counties) to each municipality. Changes in equalized value do not necessarily translate into a change in property taxes.
8-yr Trend (City of Sun Prairie)
A quick glance of the 8 yr track record of equalized values for the city of Sun Prairie show the phenomenal growth, including a maximum of 25% increase in equalized value in 2004. However, things have changes since the recession took hold in fall 2008. For 2009, the net change in equalized value was flat (0%). For 2010, we saw a drop of 5%. That is amazing given an average increase in equalized value of 13% for the 5yr period from 2003 to 2008.Total Equalized Values for SPASD communities 2010
If one averages the change in equalized values for all the communities that make up the Sun Prairie Area School District, we see that the average reduction for all is -4.04% .But....that involves the TOTAL values. And clearly, while Madison has a total equalized value of over $23 billion, only a small portion of Madison lies within the Sun Prairie Area School District. So, we need to re-apportion these values to a more proper reflection of their contribution to the whole "pie".
While the town of Blooming Grove actually experienced a 1.6% increase in equalized value over 2009, less than 1% (0.83%) of Blooming Grove's property falls within the SPASD. Therefore, that increase will not impact us much.
Clearly we don't have all the keys to the magic kingdom, but it is equally clear that we know, from annual school tax levy reports, exactly how much tax levy from each of the 10 cities and towns that make up the Sun Prairie Area school district.
And once we know that, we can take the percentage share from THIS year's equalized values and project the new equalized value for the district.
For instance, last year, we know that only $623,820,761 of the City of Madison's equalized value contributed to the Sun Prairie Area School district. While this accounted for 15.84% of the total equalized value for SPASD, it only represented 2.7% of Madison's total equalized value. Therefore, we can take 2.70% of Madison's 2010 Equalized value ($22,212,095,800, a 3.97% LOSS), and apply that dollar amount to SPASD's total for 2010. We can use this same approach for the other 9 municipalities that comprise SPASD.)
We may be off by a small degree, but it would take some major corrections to turn -4.4% into 0%. Not gonna happen, folks.
Fall 2009 School District Certification of Full Equalized Value - Tax Apportionment
Why do you even care?
You should care, because the equalized value is the "denominator" in the mill rate equation. For the less math-minded, as the denominator shrinks, the mill rate INCREASES by the same amount.
Projected mill rate as of 8-27-2010 was $11.90. This is based on a 0% growth in the Equalized Value ($3,937,400,000). If we know the result (mill rate) and the denominator (Equalized Value), then the numerator (tax levy) has to be $46,850,000, give or take a few thousand $.
If the equalized value drops 4.4% to $3,760,000,000, then the mill rate increases 4.4% to $12.46. That's a net increase of $0.56, which translates to an extra $112 on a $200,000 home.
Looking at it another way, assuming our equalized value projections are accurate, in order to retain the mill rate of $11.90, the tax levy must be reduced by another 4.4%, or about $2.1M.
What is "Equalized Value"?
The estimated value of all taxable real and personal property in each taxation district, by class, as of January 1 and certified by the Department of Revenue on August 15 of each year. The value represents market value (most probable selling price), except for agricultural property, which is based on its use (ability to generate agricultural income) and agricultural forest and undeveloped lands, which are based on 50% of their full (fair market) value.
--2010 Guide for Property Owners ( http://www.revenue.wi.gov/pubs/slf/pb060.pdf )
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