City changes property tax payment schedule in wake of La Follette analysis

Madison taxpayers can now pay their property taxes in four installments due to an ordinance change adopted by the city council June 5, a couple years after a La Follette School analysis found that property owners are less likely to be late with tax payments if they can make three installment payments a year instead of two.

The La Follette School study came about after Madison treasurer Dave Gawenda noticed an increase in property tax delinquency and wondered whether increasing the number of payment installments would bring it down. He contacted La Follette School economist Andrew Reschovsky who, with then-student Paul Waldhart, a 2011 alum who is now an analyst with the Wisconsin Legislative Audit Bureau, conducted the analysis using data from Wisconsin municipalities for 2005 through 2009.

“It was clear in the debate at the Madison Common Council that many of the policymakers were persuaded by the analysis Andy and Paul had done,” Gawenda says. “I think it’s a great example of city government benefiting from the presence of the La Follette School here in Madison.”

At the time of the study, about 60 of Wisconsin’s 1,850 municipalities allowed more than two installments for real estate taxes, Reschovsky says. “Our study provided statistical evidence that allowing property owners to pay their property taxes in more than two installments would result in lower rates of tax delinquency.”

A revised version of the report submitted to Gawenda was published in late 2012 in the scholarly journal Public Finance and Management. The analysis also is available as La Follette School Working Paper No. 2012-013.