Wauwatosa School Board Approves Projected Tax Levy Hike, Citing Likely State Aid Drops

Wauwatosans might have to pay an additional $2.2 million for the school share of the 2012-13 property tax levy because of the city’s loss in a lawsuit over a medical center’s tax exempt status, the School Board revealed Monday.

The Wauwatosa School Board put taxpayers on notice about the possible extra increase at its Monday meeting. At the same meeting, the board unanimously (other than absent member Sharon Muehlfeld) cut spending but also approved a projected 4.56 percent tax levy increase for the next school year of 2012-13 (see all figures, including a detailed budget chart, here). That’s separate from the $2.2 million.

Board President Michael E. Meier stressed that whether to add the $2.2 million to the projected levy increase won’t be decided until the fall. It’s possible, he said, that the board would spread the amount out over multiple years or find another way to pay for it.

“It was mentioned tonight so no one would be surprised that we are considering what to do about this,” Meier said in an interview after the three-hour meeting concluded. “It’s under consideration.” He said that the board’s decision will “depend on what the administration” recommends, in part.

The amount stems from the city’s , formerly Covenant. In 2011, city officials said that the loss could affect all taxing entities, . Essentially, that's because they have to pay back the taxes already collected.

The state Supreme Court had determined that portions of the medical facility’s outpatient center, 201 N. Mayfair Rd., are exempt from paying property taxes because it largely supports the tax-exempt St. Joseph’s Hospital in Milwaukee.

Patch that the city had borrowed the money to help out the district but the district probably preferred paying the money back sooner versus paying the city back for a loan, saying it was more beneficial to taxpayers. Administrators indicated then that they might pay the amount with cash reserves.

Superintendent Phil Ertl noted after Monday’s meeting: “We’re out $2.2 million."

As for using short-term borrowing to pay the money back instead of placing it on the levy, Meier said the district has a philosophy against short-term borrowing, which has led to an excellent bond rating. Ertl compared short-term borrowing to “using credit cards.”

Levy up as state aid goes down

School officials stressed that the underlying 4.56 percent levy increase was the result of projected drops in state aid, and said that this figure also could change.  The budget will be adjusted in October once final enrollment, state aid, and state revenue cap figures are available, according to the board’s agenda. The final property tax levy will be set at that time.

“The state is giving us less money in state aid,” Ertl said, noting that the district was also cutting spending. “Since 1993, living within the limits has been very challenging” for school districts, he said.

Ertl and Meier noted that the district had already taken steps to find efficiencies to make up for the last wave of state aid cuts, such as a district wide pay freeze and making employees pay more for benefit costs.

The board also unanimously approved a 2 percent salary increase for employees in the administrative group at a cost of $63,791 and a 2 percent salary increase for non-represented employees, at a cost of $40,125.

The board eliminated a program in which employees were paid to choose their spouse’s health insurance plan instead of the district’s plan. Higher deductible costs didn’t make the program worth it anymore, Meier said. The elimination applies to all employees except those covered by unexpired collective bargaining agreements.

However, projected spending was down.

• Total expenditures were $83,013,590, a drop of 1.76 percent from last year’s spending total of $84,497,070.
• Meanwhile, overall revenue is up.
• Under spending categories, instruction costs would rise slightly.  Drops came in categories such as capital projects and food service.

No members of the public commented on the changes, which were also discussed at the board’s May 31 meeting.

The proposed budget for 2012-13 lists the total school levy at $44,647,390, an increase from the $42,700,133 in 2011-12.

Although the budget vote was unanimous, Board Vice President Anne Fee was the lone “no” vote on a motion to pay $9,237 for the district to belong to the Wisconsin Association of School Boards. She questioned whether the services were really needed due to economic pressures. Ertl said the membership allows for advocacy, staff development activities, and provides some legal services if needed. “It’s worth the cost of renewal,” he said.