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Error may raise Shorewood property taxes

Sept. 1, 2011

Shorewood - Village residents could face an unexpected bump in their property tax bills this year because of a data-entry error, apparently made by the village's outside assessor.

The mistake was discovered when the state published its list of municipal equalized values in mid-August.

Village officials and consultants are working to fix the problem - but it's complicated, and they could conceivably have to wait until next year to make it right.

Stephanie Walker, Shorewood's finance director, said the mistake apparently happened when someone at the office of the village's assessor, Associated Appraisal Consultants Inc., entered three extra zeros in the number describing the increase in the assessed value for the village's biggest tax incremental finance district. The result was that the district was reported to have grown by $77 million, instead of $77,000, she said.

Mark Brown of Associated, who serves as Shorewood's assessor, didn't return calls seeking comment.

The report was made to the state Department of Revenue, which in mid-August published a list of all equalized values of the state's municipalities. A complicated set of calculations based on the state numbers would result in an additional $2 million being placed on village property tax bills than if the number had been reported correctly - though Walker said that's just an estimate, based on 2010 levies by all the village's taxing units, because budgets aren't set yet for the coming year. The extra money would go into the fund for repaying the borrowing set up in the TIF district.

Based on the 2010 numbers, that would lead to property tax bills 5.8% higher on average than they would otherwise have been.

The problem would correct itself in the next taxing year, with the village taxpayers having to pay $2 million less than normal into its TIF district, but that would leave residents with inflated bills this year and what Shorewood financial adviser Mike Harrigan called "a roller-coaster effect on taxpayers" over the next few years.

Plus, Walker said, if the village decreased its 2011 tax levy to protect taxpayers from an increase, state levy limits might prevent the village from returning to ordinary taxing levels next year.

Can't the village just get the state to correct its numbers? It's not so easy, Walker says.

"They haven't shown a willingness to do that," Walker said. "I don't know if statutorily they can."

Department of Revenue officials said state law prohibits the agency from changing the numbers after they're certified, which by law must be done by Aug. 15. The state's municipalities rely on the numbers in their budgeting process, and for that reason, they can't change.

The faulty number apparently looked wrong to the department before it certified its list.

"Our numbers are based on what assessors give us," said Stephanie Marquis, Department of Revenue spokeswoman. "We contacted the Village of Shorewood assessor before publication because we were concerned the value was not correct, but the assessor confirmed that it was."

There may be other ways out of the situation, and Walker says the village is exploring them with the help of Harrigan and his firm, Ehlers and Associates.

One solution, Walker and Harrigan said, would be to borrow money this year to keep the tax levy down, and then repay it next year.

Harrigan said another alternative would be to seek a "one-time adjustment" in the new state levy-limit law to prevent the problem in the second taxing year. He added that alternatives for a fix would be shared with village officials and eventually the Department of Revenue.

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