An issue that municipal officials in St. Croix County say is putting the squeeze on local coffers is being targeted by the Tony Evers administration. The Democratic governor earlier this month said he would include a measure to close the so-called "dark-store loophole" in Wisconsin. A 2008 Wisconsin Supreme Court ruling allows retailers to have open stores assessed at the rate of a vacant store, allowing them to pay lower property taxes.
Democrats at the Capitol note the effort has been successful for retailers in Fond du Lac, where Menards saw its assessment reduced by $4 million and a CVS Pharmacy in Appleton received a $350,000 property tax refund after an assessment challenge.
The issue has brought legal action in Hudson and New Richmond, where big-box retailers have sued those cities to recoup taxes under the ruling.
"That's a big one," New Richmond City Administrator Mike Darrow said last week of the issue.
City of New Richmond officials are working with the Wisconsin League of Municipalities to overturn the law.
Walmart filed suit in September 2018 against the city of New Richmond. The lawsuit alleges the $11.35 million value set by the New Richmond city assessor's office exceeded the $4.25 million value claimed by Walmart.
That case was consolidated with an identical 2017 suit brought by Walmart alleging the city of New Richmond incorrectly valued the building at $11.35 million. That year's value should have been $7.79 million, according to the company.
Sen. Patty Schachtner, of Somerset, has been among Democrats backing Evers' proposal. She cites the League of Wisconsin Municipalities in a news release, saying Hudson residential taxpayers could be on the hook for a 9 percent property tax increase "if the dark store strategy is fully implemented."
Menard's filed a suit in December 2018 against the city of Hudson, alleging the 2018 value of its building there was worth no more than. $4.4 million. The city assessor valued the same property at $10.3 million. It seeks a refund of the property taxes-plus interest.
"An actual and justiciable controversy exists as to the 2018 value of the property and Menard's right to a reduction in the value" under state statute, the company stated in its court filing.
Menard's alleges the city's Board of Review didn't grant a waiver it sought and provided only a 90-minute notice in advance of a hearing on the matter.
In its response, the city contended it properly denied the waiver due to non-appearance.
Menard's filed a similar lawsuit against the city of Hudson in 2017, alleging the $9.7 million valuation set by the assessor was incorrect. It alleges the correct value in 2017 was $6.4 milion.
Opponents of the effort to overturn the ruling, including the Wisconsin Manufacturers & Commerce (WMC) group, say they're protecting businesses from "overly aggressive assessors."
"These companies challenge the illegal assessments in court to bring their taxable amount back to an appropriate amount," a WMC news release states.
"Dark store" legislation was introduced last year at the Capitol, but never got a full vote.
Rep. Shannon Zimmerman, R-River Falls, said he backed efforts to close the loophole last year, but has since taken a more contemplative approach.
He said he's awaiting the new bill to see if its provisions have changed.
"Before saying I'm all in, I want to do my due diligence and review the language," Zimmerman said, adding that he wants to evaluate the argument from businesses "that this claim is really not an issue, but local municipalities creating or finding ways to obtain needed revenue."
For now, "I'm all in investigation mode right now," he said.