An article published in Education Week examines how big-box stores are using “dark store theory” to reduce their property tax payments, and how that is threatening to drain more resources from our public schools. The trend – in which companies claim their stores should be assessed as if they were vacant – has become pronounced in Michigan, Indiana and Wisconsin.
The article cites the case of Menards suing to significantly reduce its tax payments in the Howard-Suamico School District north of Green Bay, and the impact of lost tax revenue on the district:
In the short term, said Matt Spets, the assistant superintendent for operations, the district could manage the lower revenue amount. In future years, however, Spets said, the district would have to ask residents to pay higher taxes or cut its budget by a corresponding amount if more retailers succeed in lowering their taxes. But residents may not be inclined to raise their taxes for schools: Last April, voters rejected a referendum that would have helped fund building upgrades, student support services and personnel costs.
“It’s not an ideal situation,” said Spets who noted that rural school districts are the most vulnerable.
Read the entire Education Week story:
Paying attention to how much nearby corporate retailers pay in property taxes may not be a priority for most school district leaders, but some policymakers think that could change soon. Across the country, retailers-in particular big-box stores-are pushing back on how local governments assess the value of their properties with the goal of lowering their tax bills.