May 11th, 2011
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Author: The value of the average Homestead Tax Credit – a state credit given to low income taxpayers to offset their homes’ property tax bills – has fallen about 27 percent since the early 1990s due to inflation, according to the Wisconsin Budget Project.
In 2009, in an effort to increase these credits, the state Legislature approved a plan to index how they’re calculated to inflation. Prior to 2009, the last adjustments approved for the credits dated back to 2000 and 1990.
“For years, the formula for calculating the Homestead Credit was the only major part of the tax code that was not indexed to account for the effect of inflation,” says a report from The Wisconsin Budget Project, a research group connected to the liberal Wisconsin Council on Children and Families.
Gov. Scott Walker’s proposed 2011-13 budget would repeal the changes passed in 2009 (and took effect this year). The budget estimates savings of $8.1 million.
About 247,000 people claimed the Homestead Credit in 2010. To claim on that year’s taxes, filers had to have household income of less than $24,680. The average credit awarded was $520.
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