RACINE COUNTY — As the State Legislature prepares to go back into session with some new lawmakers and a new governor, one topic that will likely get a lot of attention is the “dark store” loophole. The dark store loophole allows for property owners, in this case mostly corporations, to challenge their property assessment with the local municipalities to get a lower property tax rate when comparing their property values to those of shuttered businesses.
For example the Village of Mount Pleasant is currently in court as Wal-Mart and Walgreens challenge their property tax assessment claiming they were assessed too high and should pay lower taxes. Those companies claim their properties should be assessed for the building that’s on them — not the businesses located within.
Opponents argue this allows big box corporations to pay lower taxes similar to an empty, or “dark,” store and shifts the tax burden onto other taxpayers.
Legislation on the loophole was discussed during the last legislative session before it was sent to a committee for study.
Mount Pleasant isn’t the only municipality dealing with this issue; dozens of communities throughout the state, including the City of Racine, have been hit with similar lawsuits.
On Nov. 13, the Racine County Government Services Committee recommended passing a resolution urging the state to take action on the dark store loophole in this upcoming session. It next goes to the full County Board for a vote.
The recommendation passed 5-2 with supervisors John Wisch of Caledonia and Scott Maier of Yorkville voting against it.
Wisch questioned the necessity of such a resolution, considering legislation on this topic is currently being evaluated by a study group in Madison. The group plans to present its findings to a nonpartisan legislative council before a recommendation is made to state lawmakers.
“If they’re working on it already, I don’t know why we need to put input into it in this point in time; I’d rather see what the result is out of the discussion at the state level,” Wisch said. “It’s not that I don’t agree with what the resolution says. … That being said, I would like to see this tabled until we see what the state’s doing.”
County Board Chairman Russell Clark of Racine, who was present at the meeting but did not vote, urged the committee to be patient with the process.
“As far as I’m concerned, I don’t think we need to do anything,” Clark said. “It’s there, they know about it, they’re hearing from both sides. They know compromises have to be made from both sides. … I think they did not rush it last time because there was some problems that they were finding at the 11th hour.”
County Board to act
Supervisor Tom Kramer of Norway said legislation on the loophole received a lot of support from Racine County representatives, and the board should express that support.
“I think we should give them the backing of the County Board and say, ‘Let’s do this and let’s do this right now,’” Kramer said.
Committee Chairman Janet Bernberg of Wind Point said the County Board should send a clear message to local legislators.
“Not that we can solve the problem, but I think we need the input to say that the county is behind this, and this is something that we want done,” Bernberg said. “Everyone says it’s a complicated issue and yes, it is a complicated issue, but it’s simple in the sense: Do we want our homeowners to be paying more than corporations?”
Clark said he has talked with Assembly Speaker Robin Vos, R-Rochester, about working with the League of Municipalities and the Wisconsin Manufactures and Commerce to find a solution.
“(Vos) realizes both sides, nobody’s going to be happy when it’s done. … They’re going to have to do a huge compromise both ways,” Clark said. “... It is extremely complicated and how to resolve it, it’s going to take a lot of time and energy and working with both lobbyists.”
Clark said board members will have an opportunity to talk to local legislators about this issue.
“When we have our legislative forum, this will be a topic for when our legislators are here in January or February, whenever I schedule that,” Clark said. “That is going to be the No. 1 thing that we can have on that (agenda), and that way we can have dialogue and listen to them and ask questions and get answers from them.”