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Evers says budget will call for closing ‘dark store’ loophole

By SCOTT BAUER, Associated Press

MADISON, Wis. (AP) — Gov. Tony Evers promised on Tuesday that his first state budget proposal would be to close the so-called dark-stores loophole that allows big-box retailers to reduce their property taxes by millions by letting the value of vacant stores influence assessments of active stores.

Local governments have been leading the push to close the loophole, arguing they lose tax revenue when stores like Menards and Lowes benefit from unfairly low property-tax assessments. Last session, the Legislature considered a bipartisan bill that would have closed the dark-store loophole. But it died amid opposition from the state chamber of commerce.

Evers, speaking at a meeting of the Wisconsin Counties Association and later to reporters, also said he would propose more spending on guards at the troubled Lincoln Hills juvenile prison while delaying its closing; oppose Republicans’ plan to reduce incomes; and oversee a review of air permits granted to the Foxconn Technology Group project.

Evers will introduce his budget at the end of the month. It’s certain to meet resistance in the Republican-controlled Legislature, where lawmakers were already disagreeing with Evers on how to pay for a plan to reduce income taxes by 10 percent on average.

Both Republicans and Democrats alike worked together last session on the “dark stores” issue but could not come to an agreement. Their proposed legislation died amid opposition from the state chamber of commerce and mega-stores that argued the way property is now assessed has long been standard in Wisconsin.

Recent court rulings in Wisconsin and other Midwestern states have helped retail giants lower the assessed values placed on their stores for property-tax purposes. The retailers have increasingly argued that they are overtaxed and that the value of active stores should be influenced by the value of nearby vacant stores.

Evers said the current system shifts property taxes onto small businesses and homeowners.

“Having large big-box stores have the property tax levied at a level as if the building is empty is absolutely a non-starter with me,” Evers said. “It should be fair for all and in order to do that we have to close that loophole.”

Assembly Speaker Robin Vos and Senate Majority Leader Scott Fitzgerald, both Republicans, did not immediately return messages seeking comment. Vos was opposed to the proposal last session to close the “dark store” loophole, saying he was reluctant to take a step that might increase retailers’ taxes.

Voters in 17 Wisconsin counties and six municipalities approved a non-binding resolution in November calling for the loophole to be closed.

On other topics, Evers said he:

  • had directed the Department of Natural Resources to review air permits granted to Foxconn Technology Group. That review has not begun but Foxconn officials told him they are not concerned, Evers said.
  • would include additional money to hire more guards at the Lincoln Hills juvenile prison, while delaying the closing for at least a year while work proceeded on designing smaller centers. Evers said the delay, first announced last week, was not “ideal” but the process shouldn’t be rushed. Current law requires the prison to close by 2021, but Evers and counties working on the new prisons say that timeline is unrealistic.
  • doesn’t support the Republican income-tax plan because it taps budget reserves to pay for it. Evers prefers all-but-eliminating a manufacturing-and-agriculture tax credit to pay for lowering taxes for the middle class tax, a policy Republicans are opposed to.

One comment

  1. “Voters in 17 Wisconsin counties and six municipalities approved a non-binding resolution in November calling for the loophole to be closed.” Really? I’ll bet if you interviewed people in these areas or any other in the state, they could not even tell you what that retail property tax issue is about! If it wasn’t called a “loophole” is the discussions, many individuals wouldn’t give it another thought.

    Municipalities, on the other hand; being the recipients of increased tax revenue when stores are occupied feel deprived of revenue when those stores are empty. But, the value of the real estate is legitimately lower for unoccupied (empty — no one paying rent) property than before.

    The real problem, is that property taxes should not be based solely on property assessment value.

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