A recent FOX6 investigation has caused a lawmaker to call for a public hearing, after FOX6 uncovered a controversial tax loophole that allows some landowners to take advantage of a tax break meant for farmers. The taxpayers buy up farmland, with every intention of turning it into something else - putting in streets, lights, electrical service and subdividing the lots. While they wait for the lots to sell, they hire a local farmer to cut weeds at least once a year, and bale the weeds as hay. That qualifies the land as "agricultural," and the owners pay almost nothing in property taxes.
This law is meant to help farmers keep their land by farming their property one or two days a year. FOX6's original investigation aired on November 13th. FOX6's original investigation focused on Fairway Woods in Twin Lakes - once an upscale golfing community that now sits dormant thanks to the sluggish housing market. Fairway Woods has paved streets, street lights, electrical service, and subdivided lots, but according to state law, it's a farm.
The day after FOX6's original investigation aired, Rep. Louis Molepske (D-Stevens Point) sent a letter to 28 of his colleagues, calling for the public hearing. Molepske writes that "such flagrant violation of the intent of the law threatens the entire Use Value Assessment Program."
"It should upset every Wisconsinite because they are being duped by those who are taking advantage of hard-working farmers and the state statute, to shift their property taxes to everybody else, unfairly. There should be an uproar by the public, because in tough times, people feel everybody should pay their fair share," Rep. Molepske said.
Kathy Ticha owns a home in Twin Lakes, along with a vacant lot next door, and paid nearly $1,900 in taxes on the empty lot last year. She feels she's being taken advantage of, being forced to pay her fair share in taxes on the vacant lot, while directly behind her, property owners are getting a tax break. That property is a struggling residential development known as Whispering Oaks. Twin Lakes Village Trustee Tom Connolly owns three of the empty, weed-infested lots, and pays just $1.88 in taxes.
In a phone interview with FOX6, Connolly says he didn't purchase the lots for the tax break, but because the price had dropped and they were next to his property. He says he hires a local farmer to cut hay on the empty lots once or twice a year. Connolly admits the lots are do not constitute a farm, but says he didn't make the law.
Ticha says she'd like to pay $1.88 in taxes, but feels it's all about who you know and what you do. She says she approached Twin Lakes Village Appraiser Walter Graeber about getting a Use Value Assessment on her vacant lot, and was denied, and told that even if she planted some corn on the lot, she wouldn't be able to be provided with the lower tax rates. As FOX6's original investigation uncovered, Graeber owns seven empty lots in the Fairway Woods development, and himself gets the Use Value Assessment tax break. Graeber's boss told Ticha she probably could qualify for the Use Value Assessment by planting crops on her property - or selling Christmas trees, as Graeber is planning on doing, because Christmas trees qualify for the tax break.
"You can only put so much lipstick on a pig, and it's still a pig, and that's what they're doing here. You can put a dress on it, you can put the lipstick on it, and it is still developers trying to act like farmers and getting Use Value treatment, and that's not fair," Rep. Molepske said.
Shannon Krause, president of the Wisconsin Association of Assessing Officers says that as an individual, she is bothered by this, but as an organization, assessors have to follow the law, and in Wisconsin, there is no law that guards against potential abuse of the Use Value Assessment. It's up to the legislature to decide whether our law should include such protections.