Neumann announces property tax plan

Jul 22, 2010 — Milwaukee Journal Sentinel

Lee Bergquist

Jul. 22, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- GREENFIELD -- Republican gubernatorial candidate Mark Neumann unveiled a plan to let homeowners avoid paying property taxes in 2011, if they agree to make monthly -- instead of annual or semiannual payments -- starting in 2012.

Neumann, a former member of the U.S. House, said his proposal amounts to the largest tax cut in state history.

But the campaigns of his chief Republican and Democratic opponents criticized the plan, saying it didn't amount to a true tax cut.

Todd Berry, president of the Wisconsin Taxpayers Alliance, agreed and said Neumann's proposal amounted to a change in when the property taxes are paid.

"The key point is all this does is change the timing when you pay your property taxes -- it doesn't cut them," Berry said. "So the main benefit -- if there is a benefit -- is that it might free some escrow money for some people and that might have a stimulative value."

According to Neumann's calculations, the plan would save $11 billion if everyone who pays property taxes participated. That would amount to about $4,500 in money already paid into escrow for the average homeowner, he said.

Berry said the measure wouldn't help renters and those who don't put money away through an escrow account. There might also be cash-flow issues for schools and other units of government.

Neumann said his plan would increase spending or savings and generate more income tax and sales tax revenue that could be used to balance the budget or provide tax cuts.

Neumann insisted his plan was not a shift, but a cut, since property tax payers would be getting money they wouldn't ordinarily have.

The plan would work this way:

Property owners with a $6,000 tax bill in 2011 would keep the money from their tax escrow account held by their mortgage company, instead of using it to pay 2011 taxes that would fund 2012's governmental needs.

Starting in January 2012, those property owners instead would send their local municipality $500 per month. Neumann said technology upgrades would make it easier for funds to be allocated to the appropriate taxing jurisdictions.

The plan is voluntary. Property owners could continue to make annual payments, and for them, there would be no savings in 2011, Neumann said.

Neumann, a Nashotah homebuilder, is running in the Republican primary against Milwaukee County Executive Scott Walker.

Walker's campaign said Neumann's plan did nothing to lower the state's property tax rate.

"This is just more smoke and mirrors by Mark Neumann," said Keith Gilkes, Walker's campaign manager.

Neumann's Democratic opponent, Milwaukee Mayor Tom Barrett, also issued a statement criticizing the measure.

Barrett campaign spokesman Phil Walzak said Neumann was lowering taxes by "playing a shell game with the payment schedule."

Newstex ID: KRTB-0130-47177879