MARCH 2023

In a previous newsletter, we covered the tax impact of the proposed referendum, but tax impact does not necessarily correlate with a dollar-for-dollar tax increase. Tax impact, tax levy, and mill rate are complicated terms that we talk about often, so let’s dive in a little bit more about how tax levies work and how the proposed tax impact will affect the school portion of your overall tax bill. 

A tax levy is the amount of money the school district receives from property tax based on the revenue limit. Revenue limits were put in place by the state legislature in 1993 in order to control property taxes; the amount of our levy or tax (our revenue) is controlled and limited by the state law. When the state formula for the annual revenue limit is determined, the school district sends the levy amount to each municipality to distribute among all property taxpayers. For Monona Grove School District, the City of Monona, Village of Cottage Grove, and Town of Cottage Grove make up 99.5% of this levy distribution with very small portions of the Town of Blooming Grove, City of Madison, and Town of Sun Prairie making up the rest. 

For the past four years, the amount of money that the Monona Grove School District has received from the tax levy has gone down by 5.6%. This corresponds with a 30-year low in our current mill rate of $10.31 (the mill rate is the total amount of the levy divided by equalized property value across the district).  

The tax impact of the proposed referendum restores the mill rate to what it was two years ago. The estimated tax impact ($2.05 per $1,000 of fair market value in year one, an additional $0.52 per $1,000 of fair market value in year 2, and an additional $0.72 per $1,000 of fair market value in year 3 and thereafter) on a property with a fair market value of $300,000 is $1,002 by year three (it does not continue to increase). Because the school levy has been decreasing as outlined above, our projections show that if the referendum passes, by year 3 (2025-26) the school portion of property tax bills will be less than they were in 2020-21 as shown in the graph below. The graph demonstrates the estimated school tax based on a $300,000 home, but the projections remain consistent across all property values.

It’s important to keep in mind that projecting tax impact is complicated since these numbers may change based on new commercial and residential developments, state funding, etc. Projections are based on annual property growth estimate of 5.0% each year. Tax bills may shift based upon annual fair market value (FMV) shifts. Source: PMA Financial Network.

In next week's issue

In these weekly newsletters, we'll address frequently asked questions and provide information. In next week's issue, we'll go into more detail on what the proposed referendum will do if approved.

Have a question or a topic you'd like to see covered in this newsletter? Email us at mgreferendum@mgschools.net.

5301 Monona Drive, Monona, WI 53716  Phone: (608) 221-7660  Fax: (608) 221-7688