Wausau Friday Facts (2/7)

 

WAUSAU FRIDAY FACTS #2

Would You Use Your Credit Card to Pay Your Mortgage?

Clearly, it is a bad idea. Your total debt does not go down, and interest continues. Until you can pay down that mortgage out of your monthly household budget, your financial position will not improve.

 

So, why does the City of Wausau issue debt to pay for its annual operating costs?  The simple—yet astounding—answer is that city hall can raise your taxes more to pay debt than it can to pay operating expenses.  So, the city chooses to use debt financing even when it is more expensive and inappropriate.

 

An example might help.  Every year, the city issues about $3.5 million in 10-years general obligation bonds and uses the money for road repairs and construction.  Then it taxes its citizens to fund principal and interest payments on all of the outstanding bonds from the past ten years.  Because the citizens' tax dollars are nominally going to “pay debt” and not to road work, the amount is exempt from the levy limits. This gimmick to raise your taxes is clearly explained in the 2026 city budget (page 13):


“The 2026 budget is the eleventh year the City has increased the levy above the basic levy law limit.  This was accomplished through the debt exemption. The total amendment over and above the basic levy limit is $4,848,035 [or 16.37% more than the law allows].”



The problems with this technical trickery are two-fold.  First, instead of residents paying just the cost of roadwork, they have to pay the cost of the roadwork plus ten years of interest on top. It just makes road work more expensive. Secondly, if we were to follow the example of Marathon County and start paying for our roadwork in the operating budget, Wausau's state-imposed levy limit would drop precipitously as we retire the debt service exemption. City hall's zeal to raise taxes by any means has painted us into an expensive corner.  It will take the city years of committed effort to get out of this debt cycle.


Do you agree or disagree? Feel free to register your comments on Facebook. https://www.facebook.com/wausaudistrict6/ 

Wausau Friday Facts is a once-a-week presentation of factual data to inform residents about their city government. It is put out by the Friends of Keene Winters, Cathy Winters, Treasurer.

For more information about Keene Winters and his policy positions, please go to:
https://www.wausaudistrict6.com/fridayfacts

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