How a $2.2 Million Bill Cost Taxpayers $4.4 Million
It all started with a lawsuit by Wheaten Franciscan Health Care, where they alleged, and eventually proved that the City of Wauwatosa, the Wauwatosa School District, and other entities had overtaxed them by many millions because they were partially a tax-exempt entity. Not surprisingly, they want their money back.
Now the question comes as to how we pay them back. The City of Wauwatosa, which owed $8.5 million paid them back using "available funds" which were somehow laying around in the city coffers. The City of Wauwatosa, apparently without discussing this with anyone on the School Board, then decided to borrow an extra $2.2 million to cover the Wauwatosa School District's portion of the bill. The only problem? The School District didn't want to pay the bill using borrowing, and declined the money.
So now, the City of Wauwatosa, which had already borrowed the money is flush with an extra $2.2 million that it gets to spend on whatever project it wants at the expense of Wauwatosa taxpayers, and the Wauwatosa School District still has to come up with the money to pay it's bill.
Last night, we found out how the Wauwatosa School District intends to pay... with a higher tax levy on citizens right now. In other words, each citizen in Wauwatosa is essentially double paying this bill right now.
The School Board has said that it doesn't like to use short term borrowing, because it would affect their credit rating, and is like "using credit cards" to pay the bills. That is an excellent sentiment, and should be generally applauded. Unfortunately in this instance, it makes no sense, because the money was already borrowed.
The City of Wauwatosa already spent the money on the credit card on the behalf of the School District. In the business world, we refer to this as "sunk cost". In other words, it's a decision that cannot be undone. However, the School District is making it's decisions regarding this bill as if City didn't take the action that nobody wanted it to take. Whether people like it or not though, the city did already borrow that money, and so the School District should utilize it.
The Wauwatosa School Board and the City of Wauwatosa may be two separate entities, with their own elected boards, and their own taxation powers, but that doesn't mean that they should make decisions as if the other didn't exist, because the bills for both come to the same people... the citizens of Wauwatosa.
The City Council was dead wrong, and irresponsible in borrowing that much money without even discussing it with the School Board. Despite that, the School Board is just as wrong in turning down that money now, and costing the taxpayers twice as much as it should.