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School Tax Levy to Rise 6.1% in 2012-2013 Budget

District is permitted to raise taxes to make up for reduced state aid and for unexpected requirement to repay city for losses in lawsuit last year.

Wauwatosa property tax-payers will see a bump of 6.1 percent in their bills this year for schools under the final budget approved this week by the School Board.

The total tax levy for all school funds will be $45,299,415, up from $42,700,133 last year.

A rise was expected. In the preliminary budget passed in June for planning purposes, a tax levy increase of about 4.5 percent was projected, based mainly on the likelihood of reduced state aid and small salary increases.

The state aid reduction came to pass, and in the meantime, School District budget planners decided to use the tax levy, beginning this year, to recover $2 million in "charge back" funds the schools had to pay back to the city in its loss of a major tax lawsuit.

Despite legislation passed last year that in general limits property tax increases to any growth in the value of new construction, there are provisions that allow greater levy hikes for both reduced aid and for unanticipated charge back costs.

As previously reported, the City of Wauwatosa was sued in 2003 by Covenant Health Care (now Wheaton Franciscan Health Care) over property it thought should be tax-exempt as hospital facilities. The city fought the suit and continued to collect taxes on the property totaling about $8.4 million before losing the case last year before the Wisconsin Supreme Court.

District obliged to pay back taxes it didn't collect

Under state law, the city was allowed to recoup the portion of taxes (in principal, not interest) collected in the overall levy for other entities – including the schools.

When the state Department of Revenue approved the charge back, the School District repaid the city in a lump sum out of its general reserve and began planning for how to replenish those funds.

Using the tax levy was, at the time, only one option. Another that was considered was waiting to recoup the funds from the School District's share of the expected retirement in 2015 of the tax-incremental financing district created for the Milwaukee County Research Park.

But the district's financial planners decided to move faster, regarding it as imprudent to leave the general reserve depleted by $2 million for three years. The administration proposed the alternatives of spreading levy increases to repay the debt over either three years or five years.

However, the School Board, at the urging of board President Michael Meier, this month elected to reduce that to a two-year spread, recouping just over $1 million a year, this year and next. Meier said he did not want the district to be in a "risk position" for three years or longer.

Part of increase temporary, part is of questionable duration

So, the good news is that part of the current levy increase is a bubble that will break after two years. The cost to the average homeowner of the charge back repayment will amount to about $54 a year in 2012-'13 and 2013-'14.

Combined with the regular levy increase due to reduced state aid, the total increase this year for that homeowner is about $130.

School District officials are hopeful that the Legislature will act, and act soon, to revise the state school aid formula to halt the kind of reductions that Wauwatosa is facing.

Last year, Wauwatosa schools dealt with the uncertain status of the Act 10 budget repair bill by cutting nearly $7 million from the budget and actually reducing the school tax levy by nearly 2.5 percent.

Four unions representing school workers agreed to one- to two-year salary freezes and benefit payment increases to cope with the crisis.

Under the state formula, Wauwatosa was in effect penalized for keeping its spending down, with aid from Madison keyed to per-student spending. Other districts that spent more – in some cases by spending down reserve funds or by borrowing – were rewarded with greater aid.

The Wauwatosa School District is historically and notably risk-averse, avoiding short-term borrowing and maintaining strong reserve funds. The current School Board has made it clear that philosophy is not changing.

The teachers' union, the Wauwatosa Education Association, had agreed in 2011-'12 to a one-year salary freeze, and this year accepted pay raises that amounted to an average of 2.1 percent.

alt ideas needed October 25, 2012 at 06:06 PM
I am appalled by this tax increase - pass everything down to the citizens, that will fix everything. The states cuts aid, so the school board cuts into the residents of Wauwatosa, good plan.
H.E. Pennypacker October 25, 2012 at 06:24 PM
Keep taxing and spending you liberals!
Jim Price October 25, 2012 at 11:20 PM
alt, trying to interpret the school budget in any one given year is like the six blind men trying to describe an elephant. You feel the tusk and find this tax increase appalling. But District officials, and I, have taken pains to explain the reasons, a state aid reduction and a one-time cost due to the city's lawsuit loss, for this year's increase, part of which is temporary. I also took pains to remind everyone that last year, the schools cut their budget by $7 million and reduced your school tax levy by 2.41 percent. Did I hear you cheering then? If you were to factor out the lawsuit costs, which were in no way the school district's fault, factor out the reduction in state aid, which was also in no way the school district's fault, and then average the remaining tax increase over the two years, you'd find that you, as a property tax-payer, got one heck of a good deal from a frugal agency – your schools. Tax levy increases over the past decade have gone down when correlated to inflation.
Tom Schultz October 26, 2012 at 02:01 AM
Yikes! I don't care what the cause is, it's still too damn much. And didn't the board vote to pay teachers more for going to school? Ridiculous.
alt ideas needed October 26, 2012 at 03:39 AM
Jim, I did not see that last article reminding everyone about the school's reduced tax rate last year. I would have surely applauded that ruling. Does not matter much now. What does it matter if the state cuts aid, then the school board raises taxes?- its all money coming from the taxpayers.
Jim Price October 26, 2012 at 03:48 AM
Here is the link to a story I wrote one year ago to the day: http://wauwatosa.patch.com/articles/final-school-tax-levy-even-lower-than-proposed-in-june
3393 October 26, 2012 at 12:25 PM
There always seems to be a reason to raise taxes. I noticed the Superintendant got a nice raise a couple of weeks ago too. What about cutting more spending versus raising taxes to refill that rainy day fund? Taxpayers have to cut their own family budgets to survive, so why can't the school district?
alt ideas needed October 26, 2012 at 01:06 PM
Well said 3393. Jim, I found out about Patch about six months ago when the city of Wauwatosa failed to notify residents about the start of the city's largest ever public works project. Wauwatosa admitted they made mistakes notifying citizens about the North Ave / Meinecke sewer project.
Becky October 26, 2012 at 03:13 PM
The teachers are going to get a 2.1% pay raise, that we are expected to fund for them. Unfortunately, my husband lost his job in February of this year, yet we're going to pay for these teachers to get a raise, while we are barely able to scrape by each week.
H.E. Pennypacker October 26, 2012 at 03:21 PM
Vote Romney/Ryan in a few days, things will be much worse if we allow Barack Hussein back.....
Ron Abalone October 26, 2012 at 03:40 PM
A lot of questionable expenditures, new debt, and admitted mistakes by Wauwatosa officials lately. The Republican neighborhood on and around Meinecke lobbied and pushed for the bailout of their flood prone properties with the most expensive Wauwatosa project ever, the Meinecke sewer project. Their property values will undoubledly increase immediately, but not their property valuations for tax purposes. Republicans, and particularly Tea Party types, hate government, except when it benefits them. Then they run to get help and be so teary, desperate and distressed about it, behavior they hate in others.
William Dreher October 26, 2012 at 06:06 PM
What a shock! Taxes going up in Wauwatosa. I undestand that we will be getting less from the state...and other communities too. Yes, I understand that the city levied taxes that were not applicable. An honest mistake I'll bet. The tax codes are quite clear. This "tax mistake" did in fact cost Tosa taxpayers in legal fees and wasted time and who knows what else. The real problem goes much deeper than the tax increase for schools. The problem is "we have been paying too much for too lttle for too long". The city is inefficient and out-of-touch with the real cost of goods and services today. I find the following ironic. Right after the September 20th article in the Tosa Patch "Police Department to lose two employees" (the retiring police administrative officer had a salary of $88,361), the Patch featured an article about Mayor Ehley conducting a study of city employee salaries. I'll bet the mayor got a bit of flack on the $88,000 plus. I realize this is a union position...but really? Other communities have great services, great schools and wonderful neighborhoods. And they run on lesser bugets. If you believe we are truly getting what we are paying for, more power to ya. These bad economic times. But look on the bright side. Perhaps the city of Wauwatosa will be forced to operate as a more fiscally responsible "business". Let's face it...it's time for a change. Just sayin.
William Dreher October 26, 2012 at 07:34 PM
I am very interested in this topic. Thanks for the report
Jim Price October 26, 2012 at 09:26 PM
Becky, my sympathies to you and your family. Many are out of work, and many more are facing difficult financial times. But as to teachers' raises, as pointed out, they did voluntarily accept a salary freeze last year coupled with a significant increase in their benefit costs – essentially losing money, and putting them in the same boat with others who have been getting by on less. So, if they got an average 2.1 percent increase this year, and no raise last year, with higher benefit costs in both years than they were used to paying, they have taken a big hit in compensation that far outstrips the average 1.05 percent salary increase they've gotten averaged over the past two years. Even with sluggish economic growth overall, they, like most of us, have had to get by with less than cost of living increases, higher health care costs, etc. Those were sacrifices that were made voluntarily before Act 10 went into effect. We need good, dedicated teachers if Wauwatosa is to continue to be the desirable, destination location that it is for young families. We can't expect them to stay indefinitely with definitely no salary increases in their futures.
3393 October 27, 2012 at 09:11 PM
"Higher benefit costs than they were used to paying".....that's an interesting spin after teachers didn't pay jack for their lavish benefits. Boo hoo on their salary freeze too. At least they have a job. That "we need dedicated teachers" stuff is like a broken record. Why are teachers more dedicated than Becky's husband?

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