Hugh Buchanan has paid property taxes on the 295 acres he owns in the Eau Claire County town of Otter Creek since he bought the land in 1972, so tax increases from year to year are no surprise to him.
But the 87-year-old Buchanan said he was “stunned” when he opened his property tax bill last month and learned the amount he owed topped $10,000.
“Where in the world am I going to come up with that kind of money?” Buchanan said when asked about his reaction to learning of his tax bill.
Buchanan’s property tax bill in 2016 totaled $3,985 for his acreage, his modest house, a garage and a small granary. For 2017 that tab nearly tripled, rising to $10,530, according to a copy of Buchanan’s tax bill he provided.
“It’s a huge jump in one year,” Buchanan said. “It’s tough to stomach.”
Puzzled at the large one-year increase, Buchanan contacted town of Otter Creek assessor Eric Kleven. He learned the tax jump is the result of multiple factors, including state legislation enacted two decades ago in an effort to promote more farming, rural property values that have risen significantly since then and a relatively long time since Otter Creek town properties were reassessed.
The town was reassessed last year, and some properties — especially rural lands not used for farming — that previously had been undervalued were significantly increased, Kleven said. Kleven has been town assessor since 2010, and the last property revaluation there occurred sometime before that, he said.
Buchanan’s land assessment was $206,800 in 2016 and jumped to $637,100 in 2017.
Woodlands, which make up significant portions of Buchanan’s property, have experienced much higher values in recent years, Kleven said. Parcels previously valued at $100 or $200 per acre — many of them classified as ag land — now are assessed at their $3,000-per-acre market value price as woodlands.
Kleven acknowledged the property tax jump Buchanan experienced between 2016 and last year “is certainly significant.” However, state Department of Revenue regulations regarding property assessments are specific about how land should be taxed, he said.
“It all depends on how land is being used,” he said. “If you have someone like (Buchanan) who is not farming their land and they let it grow up into trees and woods, they are going to pay a lot more in taxes now when that property gets reassessed. At the same time, you see valuable pieces of farmland where people get a huge tax break.”
While Kleven said he understands Buchanan’s frustration at his higher tax bill, there is another side to the issue. Buchanan’s property has been undervalued for years, Kleven said, and his property taxes were less than they might have been.
“In a way he got a break longer than he should have, and we’re catching up with it now (with the reassessment),” he said.
Buchanan isn’t alone among residents in rural areas facing significantly higher property tax bills when their properties are reassessed, Kleven said.
“Whenever we do a revaluation I hear from a lot of people about this issue and others,” he said.
Use value legislation approved as part of the 1995-97 state budget was designed to encourage the use of more cropland in Wisconsin by giving farmers tax breaks for doing so. At that time use value figures for those properties were slightly less than assessed values of those lands used for tax purposes, Kleven said.
Since then property values for rural lands have skyrocketed while use value figures used to determine tax payments have dropped, creating bigger tax breaks for farmers and higher costs for land not used for agricultural purposes.
Many landowners purposefully make sure some of their property is farmed so they avoid the heavy tax hit, Kleven said. Others enroll their woodlands in the state Department of Natural Resources managed forest program, a move that significantly reduces the taxes they owe on those properties.
Buchanan said he once rented some of his acreage to farmers, “but my land hasn’t been used for that purpose for a lot of years.” He did not enroll property in the managed forest program.
Upset at his tax bill hike, Buchanan said he contacted the offices of state Sen. Kathleen Vinehout, D-Alma, and state Rep. Kathy Bernier, R-Lake Hallie, seeking a political adjustment of property tax laws. He’s hoping they address the issue.
“The real problem with this is the bureaucrats in Madison,” Buchanan said. “They need to address an unfair system.”
In the meantime, Buchanan said, he will struggle to pay his property tax bill. He said he likely will borrow money to do so this year and wonders how he will come up with enough in the future to pay taxes.
“Maybe I’ll have to sell my place,” he said of the remote property about 20 miles southeast of Eau Claire he and his wife bought in 1972. “I don’t want to do that, but I may not have a choice.”
Emerson is a reporter for the Eau Claire Leader-Telegram, which is owned by APG Media of Wisconsin. He can be reached at email@example.com.