Religious high school loses fight over taxes on housing for international students

A private religious high school is not entitled to a tax break on housing it owns for its international students, a judge ruled Thursday.

Wisconsin Lutheran High School argues the housing plays an intrinsic role in the mission of religious education and should be exempt from property taxes like the campus itself, located near N. 84th St. and W. Blue Mound Road.

The City of Milwaukee suggests the school was really asking the judge to create a new exemption for high school student housing.

On Thursday, Circuit Judge David Borowski sided with the city, concluding that the minor educational activities within the dorms are "merely incidental" to their primary function as places to sleep and eat.

He lauded the school's program and mission, and agreed that regular students get some benefit from exposure to the foreign students' cultures and viewpoints, but that "the primary use of the subject property primarily benefits the international students."

Even if the school's housing did qualify, Borowski wrote in an 11-page order, the fact it rents out some of the units to tenants unaffiliated with the school or its mission defeats the exclusive use requirement and negates any tax exemption.

Wisconsin Lutheran's real solution, Borowski suggests, may lie with the Legislature, noting that housing for a religious college can be tax exempt.

The housing at issue was exempt when it was part of Wisconsin Lutheran College. But when it was sold to an entity to provide housing for high schoolers, the city billed it about $33,000 a year in taxes for the property, which the school paid twice, but appealed and sought to have refunded.

In litigation earlier this year, both sides argued the law is clear cut in their favor. If the school prevailed, it might encourage more religious schools to acquire housing that helps attract high-paying students from abroad.

The Rev. Kenneth Fisher, president of Wisconsin Lutheran High School, could not be reached for comment on the ruling Thursday.

Earlier this year, he said that students — this year from China, Korea, Vietnam, Thailand and Canada — do more than just live in the convenient apartments, which the school calls student homes. They learn from academic and religious exposure with house parents, counselors and each other.

He said the school hopes to raise foreign enrollment to about 10% of its 780 total, "a healthy level, without us becoming an international school." He said the diversity created by the international students helps all students learn.

International students' premium payments ($32,700 for tuition, room and board for the coming school year) help offset the lower fees accepted for students who attend on taxpayer-paid vouchers, which makes up just under 32% of revenue.  The school doesn't list its standard tuition but says 75% of students get some form of tuition assistance.