Village Manager Chris Swartz said on Monday that Shorewood would need to delay approving its budget until other taxing bodies shape their levies — giving the village a definitive picture of how an assessment error affects its levy.
Even with pending legislation that would exclude Shorewood from the levy limit law, officials are forced to take another step in navigating their budget with the valuation mistake. Senate Bill 224, authored by Sen. Alberta Darling (R-River Hills) and Rep. Samantha Kerkman (R-Powers Lake), is on Gov. Scott Walker’s desk awaiting a signature after passing the Senate and Assembly unanimously.
“We have a pretty good sense he will sign the bill,” Swartz said.
The error made by Shorewood’s assessor, Mark Brown of Associated Appraisal Consultants Inc., overstated the value of the village’s Tax Incremental District No. 1, which blankets much of its business district.
Village officials estimated the impact to be an artificial increase of $2 million in Shorewood's tax levy. However, that number will change depending the amount other taxing jurisdictions, including the Milwaukee Metropolitan Sewage District, Milwaukee County and Milwaukee Area Technical College, decide to levy. As the other jurisdictions’' levies increase, so does the additional amount by which the village will have to levy, Finance Director Stephanie Walker said. The school .
Shorewood’s plan to avoid an artificial spike in property taxes thus far is to decrease the levy by $2 million (the estimated amount), borrow or use cash on hand to fund the difference, and then raise the levy the following year by the same amount.
State law prohibits municipalities like Shorewood from increasing its tax levy for any reason other than through development or referendum, but under Darling’s bill, village officials would be able to make good on their plan.
“The individual taxpayer won’t see the impact of this error on their property tax bill,” Stephanie Walker said.
Under Shorewood’s proposed budget, property taxes would increase by $178,188, or 1.75 percent, from last year — the smallest increase in a decade.
after $270,000 in cuts to state aid from Gov. Walker’s 2011-13 budget bill. Shorewood, however, gains more than $230,000 in savings from workers — except for some police employees — contributing 12 percent to the cost of their health care premiums and 6 percent toward their pensions. Those provisions were outlined in Act 10, or the budget repair bill.
Police Chief David Banaszynski pulled out the needed replacement of a second squad car from the budget in order to maintain funding for all police department employee positions. The squad would have cost $42,000.
Among the largest expenses for next year are $9 million in major road reconstruction and sewer projects.
However, Shorewood stands to save $77,000 after with other North Shore communities, agreeing to contract out to Bayside and reorganizing the village's Planning and Development department, resulting in two inspectors who can process residential building, electrical, plumbing and HVAC inspections, rather than contracting out for the service.