Fraternals feel hazed by plan to initiate them into taxpaying fellowship. (fraternal life insurance companies) (Business Journal Magazine)

Fraternals feel hazed by plan to initiate them into taxpaying fellowship

LAST DECEMBER, JUST days before Christmas, a fire raged through a home on Milwaukee's south side, leaving one child dead. There was little a life insurance company could offer to ease the pain.

Federation Life Insurance of America tried anyway, and wound up giving the family a substantial cash gift. Based on South 13th Street, Federation Life always has felt close to Milwaukee's Polish and Slavic communities the firm was founded to serve 78 years ago.

Recently, William Kowalkowski, Federation's president, got a letter from the family.

"It was a thank-you note," said Kowalkowski, whose heavy accent belies the fact that he was born on South 6th Street, and not in Poland. "As soon as we find out something tragic has happened in the community, we try to help out. We feel a need to help our brothers and sisters."

Fraternal life insurers now need all the help they can get. A proposal expected to hit state lawmakers' desks soon would erase the property tax exemption fraternal life insurers have enjoyed since 1934. And unlike earlier attempts to tax the fraternals, this version seems to be gaining steam as lawmakers scramble to let the air out of ballooning property tax bills.

As a result of their approval of the proposal, 12 appointees to the 21-member special Legislative Council Study Committee on Property Tax Exemptions received a letter from a top Aid Association for Lutherans executive peeved over the decision. It was a biting "thank-you" note that alleged Rep. Joseph Wineke, a Verona Democrat who chaired the committee, had his mind made up before hearings were held.

"We now look to the Legislature, and hope that they see through Chairman Wineke's delusions and choose instead to give fraternals a |fair trial,''' wrote Wayne Defferding, associate general counsel at AAL.

Wineke took exception to the letter.

"Am I opinionated on this issue? You bet," he said. "But the vote by the committee was real clear - 12 for and three against."

For 57 years, fraternal life insurers have not paid taxes on real property in Wisconsin. They also are exempt from paying a state tax on the premiums they collect, as well as personal …