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18 April 2007

To: Senate committee on Commerce, Utilities and Rail
Re: Support SB 122 to limit some property tax exemptions

The purpose of SB 122, as we understand it, is to clarify an existing 1953 statute providing a targeted property tax exemption to reduce air and water pollution from manufacturing sources.  It will continue the exemption but only for manufacturers' property used "exclusively and directly" to remove, store or cause physical or chemical change in industrial waste or air contaminants. This is intended to reverse the effects of a 2004 decision by the Tax Appeals Commission commonly referred to as the Newark decision.

The League of Women Voters supports SB 122 on these grounds:

• One, it is essential that the state maintain a solid and dependable revenue base rather than weakening it. Exemptions put the revenue base on that oft-cited slippery slope.
• Two, tax fairness among all categories of property cannot be sustained if selected groups receive special treatment through exemptions.
• Third, each exemption puts more burden on the base of the property tax -- residential property.  By previously granting various property tax preferences to business and industry, Wisconsin has already significantly moved the tax burden disproportionately to homeowners.

SB 122 is an important protection for the financial health of Wisconsin's local governments and educational institutions.