Property taxes could increase by 3.4 percent under Gov. Jim Doyle's proposed budget, according to a report released Friday.

The nonpartisan Legislative Fiscal Bureau estimates the median-valued home in Wisconsin — averaged to about $168,000 — could pay an additional $94 in property taxes this fall.

For students around Madison, that increase could mean higher rent bills, said Eileen Bruskewitz, president of the Wisconsin Apartment Association.

"To a large extent, the rent really does reflect a cost of operations," Bruskewitz said. "It's a pretty direct correlation."

Under Doyle's proposed budget, municipalities are prohibited from increasing property taxes by more than 4 percent, or by a valued percentage related to new construction, whichever is greater.

Republican legislators have opposed the provision — which doubles a 2-percent tax levy limit approved by the Legislature in 2005 — saying it places additional stress on already high-taxed citizens.

Doyle and Democratic legislators have said they are not supporting increased property taxes, but giving municipalities the opportunity to finance local needs.

The property tax is Wisconsin's largest revenue source for local governments.

The Fiscal Bureau estimates Doyle's proposed 4-percent property tax levy limit could provide municipalities with more than $2.185 billion during the 2007-08 fiscal year, a 4-percent increase from 2006-07.

Bruskewitz said the property tax — though one of a renter's largest expenses — is just one factor in running a business. The big three expenses are taxes, utilities and maintenance, she said. This year, renters could be facing increasing utility prices and decreasing real estate prices, Bruskewitz added.

"Those are the kinds of things that get passed along," Bruskewitz said. "You have to offset those expenses by increasing revenues."

And for Madison renters, it depends greatly on the property. Higher valued property is taxed greater, and some costs can be equally distributed between a large number of tenants, for example, in apartment buildings.

"To some extent we try to minimize [rent], because it is a very competitive market," Bruskewitz said.

On Friday, the Fiscal Bureau also estimated the effect Doyle's may have on school district revenue limits. Doyle has proposed among other things, increasing the low-revenue ceiling from $8,400 per pupil in 2006-07 to $8,700 per pupil in 2007-08 and $9,000 in 2008-09.