RACINE COUNTY— In various pockets of Racine County, there are empty storefronts that used to house big-box stores but are now vacant and, in simplest terms, are likely paying the tax rate of a small business — commonly referred to as a “dark store.”
It’s a topic that has been discussed by legislators. Now, members of the Racine County Board are considering an advisory referendum that could ask members of the Legislature to pass some sort of legislation to close the “dark store” loophole.
The Racine County Government Services Committee decided at the last moment to hold off on making a decision on the referendum at their meeting on Aug. 7.
The committee punted voting on the advisory referendum to the next Government Services Committee meeting in September, thus likely missing the Aug. 28 deadline to have it on the ballot in November.
However, the committee did pass an advisory referendum on the legalization of marijuana for medicinal and recreational purposes if it is regulated and taxed like alcohol.
The marijuana referendum was presented to the County Board for first reading on Aug. 13, and is set have a second reading on Aug. 28.
Had it passed, the “dark store” referendum would have read: “Question: Should the state Legislature enact proposed legislation that closes the Dark Store loopholes, which currently allow commercial 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?”
At that meeting, during public comment, Mount Pleasant Village Board Member John Hewitt urged the committee to go forward with the referendum.
“I believe we have all seen the gains that Walgreens, Menards, Lowes, Target, Meijer, Home Depot and other big-box store companies are doing to shift the property taxes onto the small businesses and also onto the homeowners,” Hewitt said.
Hewitt, who was accompanied by Village Administrator Maureen Murphy, said these types of stores do require attention from area police and fire departments while they are empty.
“I’m sure that our representatives in Madison have received the attention from the big-box guys in ways I don’t need to mention to you,” Hewitt said, suggesting some elected officials are more willing to listen to large retail stores over constituents. “The voters put those representatives in Madison, so I say the votes should receive the most attention.”
County vs. state
During the meeting, County Board President Russell Clark suggested that the board not vote on the referendum and instead consider it at a future meeting because there are thoughts on the other side “that I’m just learning about right now.”
“Those stores are sometimes getting overassessed by the municipality, which the country has no control over,” Clark said. “We’re looking at a situation here where when that store becomes empty, what is the real value of it?”
Clark said it would be good to have a representative on either side of the argument, such as a member from the Wisconsin Counties Association, which is for closing the “dark store” loophole, and a member from the Wisconsin Manufacturers Association.
Members of the committee debated whether the “dark store” loophole is even a county issue to begin with.
Committee member Tom Kramer said it could be difficult to explain what a “dark store” is to voters on a referendum.
“This is more of an executive-director type thing,” Kramer said, adding members of the board could go to Madison to lobby for it. “If we all go up there together and lean on our local legislators, sooner or later they’ll make those loophole (changes).”
Committee member Tom Roanhouse said that although some municipalities may be suffering as a result of this loophole, this issue goes beyond Racine County and should be handled at the state level.
“I don’t know why we could consider a county wide referendum,” Roanhouse said. “This is a statewide issue.”
In February, state Sen. Bob Wirch, D-Somers, attempted to gather support from fellow legislators to address the “dark store” loophole, in hopes of getting a bill passed last session. State Sen. Van Wanggaard, R-Racine, said he is in favor of legislation addressing the matter and was disappointed no legislation came up for a vote.
Assembly Speaker Robin Vos, R-Rochester, said in February he is not in favor of raising taxes on anyone, but admits there are some that take advantage of the loophole. He also added more study is needed to find a solution to this problem.