Aids to local governments increased dramatically since 1955, according to the study. Local school aids rose 10.8% per year, while shared revenues to local governments increased 4.9% annually. However, WISTAX researchers point out that there are questions about the long-term effectiveness of local aids for reducing property taxes. Economic research in Wisconsin and elsewhere finds that state and federal aids to local governments only partially offset local property taxes, as a portion of that aid funds new spending.
The study finds that some limits on local governments have been effective at relieving property taxes and some have not. During the 1970’s, the state imposed cost controls on schools and levy limits on counties and municipalities. Due to an increasing number of “loopholes,” they were deemed ineffective and eliminated in 1983. Recent revenue limits on schools have been more effective, because they do not have similar loopholes. Counties and technical colleges have limits on the tax rates they can impose. However, large increases in property values have limited their effectiveness.