The “Net Tax” for each property within the School District of Cambridge (Determined by the School District) begins with the dollar amount of the total tax levy approved by the District. The tax levy provides for operating expenses, which is controlled by the State imposed Revenue Limit law, and to repay referendum approved debt. For the 2022-23 school year, the amount of the School District levy for operating was approximately $140,000 less than the previous year, and the amount of the levy for debt was increased to retire referendum approved debt and reduce interest costs to taxpayers.
2022 Tax Bill Explanation
Dear School District of Cambridge Community Members,
We have received a number of inquiries regarding this year’s tax bill. Enclosed is information to help explain how the property tax rate is determined and how it is applied to each properties “fair market value” on the tax bill. Each year, the School District determines the amount of the school’s portion of the tax levy upon adoption of the budget which provides for both operating expenses and debt repayment. The School District’s tax levy is spread over all property in each municipality located within the District’s boundaries. Each year, various factors can result in fluctuations to the calculation of the net property tax. Below is an explanation of some of the major factors:
1. Net Tax
2. Equalized Value/Fair Market Value
The “Equalized Value” aka “Fair Market value” (Determined by the WI Department of Revenue “DOR”) - The DOR establishes the fair market value for each parcel of land in the State and provides those values to municipalities in August each year. This value is based on current sales and other economic data tracked by the DOR and is not the “assessed value” that is familiar to property owners. A tax bill shows both values with the Total Est. Fair Market Value directly below the Total Assessed Value. The School District has all, or portions of, nine different municipalities within its boundaries. The DOR certifies the amount of equalized value of each municipality located in the School District on October 15. This determines the portion of the School District’s tax levy that each municipality receives (“apportionment #1”). In 2022, two of the nine municipalities have larger portions of value in the District than in 2021, resulting in their receiving larger portions of the School District’s tax levy than the other seven. The average equalized value increase across the State of Wisconsin was 14%, however, the equalized value increase for the Cambridge School District was 20.15%.
3. Districts Tax Rate
The Districts Tax Rate per $1,000 of Equalized Value – In Wisconsin, School District’s County’s and Vocational District’s tax rate calculation is performed on the equalized value of property not the assessed value. The School District of Cambridge’s 2022-2023 tax levy was $8,311,736 and the equalized value of all property in the School District’s boundaries was $936,044,593. The levy, divided by the value, equals a tax rate of $8.88 per thousand of 2022 equalized values. This tax rate is applied to the “Total Est. Fair Market” value shown on the December 2022 tax bills. The District’s tax rate applied to the December 2021 tax bills was $9.12 per thousand of 2021 equalized values.
4. Assessed Value
The “Assessed Value” (Determined by Each Municipality’s Local Assessor) – Each municipality’s local assessor determines the “assessed value” for each class of property – residential, commercial, agricultural, other (excluding manufacturing) under the guidance of the DOR. The local municipality receives the tax levy from each taxing jurisdiction (County, School District, Vocational District, Sanitary District and Local Municipality). The municipality spreads out (“apportionment #2”) the amount of all levies on all property within the municipality on the basis of the “assessed value” of the property. Different classes of property may also experience different valuation increases from the prior year which would result in some classes receiving a larger or smaller portion of the tax levies.
Summary
The School District approves the amount of the total tax levy for operating expenses and debt repayment and divides the levy amount into the equalized value of property within the District, producing a tax rate per $1,000 of equalized (“Fair Market”) value. The District’s tax rate per $1,000 of equalized value for 2022 ($8.88) declined, as compared to 2021 ($9.12). However, 2022 equalized value of property in the School District, as determined by the DOR, experienced a significant increase. This can be seen by comparing the Total Est. Fair Market value (aka “equalized value”) on the December 2022 tax bill to the December 2021 tax bill. The State of Wisconsin’s housing market experienced large increases in the valuations (documented by actual home sales) resulting in higher valuations established by the DOR for each property. The equalized valuation of property within each municipality is used to apportion the amount of the District’s tax levy that is given to each municipality and further reallocated on the basis of assessed value of property within the municipality. The significant increase in equalized (”Fair Market”) value, resulted in increased property taxes. The District’s tax rate of $8.88 is applied to the Fair Market value shown on a tax bill. The Net Taxes is the result of applying the tax rate to the Fair Market value and subtracting the dollar amount shown at the top of the tax bill shown as “School Taxes Reduced by School Levy Tax Credit.”
