Buried way back on page 40 of the Madison City Council June 7th Agenda (PDF), the Council gets to decide if they want to pay back $2,775,000 of property tax money to American Family Insurance. It appears that Madison overplayed a money grab from the big boys who have pretty good lawyers, ample cash and can read State Tax Law.
“Item 101 Approving a settlement of property tax litigation with American Family, authorizing the Mayor and City Clerk to sign settlement documents authorizing a payment of $2,775,000 from City resources to effectuate the approved settlement, and amending the 2005 Operating Budget to reduce estimated General Fund revenues by $933,000 to recognize the City's share of settlement costs.”The history and details are in Legislative File ID 01349 which has a link to the full legislative text file. Allow me to paraphrase the message to the council: We are screwed if this goes to trial and we should settle this quickly.
“The City of Madison and American Family Mutual Insurance Company have been litigating the property tax assessments for the American Family headquarters. … Prior to the mediation, the City had concluded that a significant refund likely would be due to American Family if the cases were tried. The issue at trial would focus more on the amount of the refund, not whether one was due. … The City of Madison must pay the full amount of the refund and then file with the State Department of Revenue to be repaid the shares for other taxing jurisdictions.”Oh but the fun is just beginning! Not only does the city have to pay back what they owe; they need to pay back what they distributed to other governmental units. The script may go something like this: Hi, I’m Mayor Dave. My administration gave you some tax dollars and now I need the money back. I understand that you have already spent it but I really need (fill in the blank*) to write me a refund check.
* Possible choices include the Sun Prairie School District, the DeForest School District, Madison Area Technical College, Dane County (sorry Kathleen) and the State of Wisconsin (my bad Jim).
It will be curious to see if the Green Party alderpersons Konkel, King and Benford can be persuaded to voluntarily give tax dollars back to a private business because Two Million Seven Hundred Seventy Five Thousand dollars is a lot of money. It’s enough to buy 1.3 million gallons of fossil fuel or to pay for 232 annual full time minimum wage jobs. Who knows how much trolley track it could build on the Isthmus? This is just another set back like the lost school referendum, and I’m positive Mayor Dave still thinks like the little engine that could: I can afford light rail, I can afford light rail, I can afford light rail.
