City of Brookfield – Worst-case scenario: Property tax bills for the average resident go up $233.50.

The city’s common council is doing its best to make sure that the worst-case scenario can never come to pass.

Brookfield’s aldermen unanimously approved a resolution Tuesday night that urged Gov. Scott Walker and the state legislature to close loopholes that are causing property taxes in many municipalities to be shifted more onto the shoulders of residents rather than businesses.

The debate, which has been taken up in not only Wisconsin, but around the Midwest, stems from the ability for thriving national retail chains to have their assessed market values slashed which in turn lowers their property tax bills.

“The League of Wisconsin Municipalities has asked us to assist them to figure out how we can close this loophole,” city of Brookfield assessor Allan Land said. “The whole purpose of this is to just encourage more municipalities to create resolutions like this, encouraging the governor and the legislators like this to take action because it is affecting us right now.”

Land noted that many municipalities are having trouble fighting the cases of businesses, such as Walgreens, challenging their assessed values. The loophole is created by what is called the dark store theory.

“What they’re saying is that if you want to look at comparable sales, you need to look at abandoned, vacant properties as comparable,” Land said. “If you were looking at residential values, you wouldn’t look at vacant and abandoned properties to evaluate the rest of the properties in the area.”

While the dark store theory has been used for years, it has only recently become a serious issue close to home.

“It really started in Indiana and Michigan to the point where municipalities were losing money. They were having to close down libraries and eliminate services because they were expecting a certain income coming in from those properties and it disappeared,” Land said.

The League of Wisconsin Municipalities asked the city of Brookfield and other communities to estimate what would happen if all national retailers were able to utilize the dark store theory in order to shift the property tax burden to residents.

In Brookfield, it is estimated based on the amount of national retail chains, 2015 mill rates and median home values that the average homeowner would pay an additional $233.50. By comparison, in the city of Wauwatosa, a full implementation of the dark store theory is estimated to result in an increase of $382.12 for the average homeowner.

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