The worst case scenario is a big number: $46 million.
That is the amount of taxes collected by the City of Wauwatosa that it will have to refund to five large property owners if the city loses all its pending legal fights with those properties. And if the city can't continue taxing those properties at current levels, that change could increase the future tax burden on residential property owners.
City officials are confident that any refunds it has to pay will end up considerably lower than the worst case scenario, though the impact of large tax refunds is already being felt by the city and the other four taxing jurisdictions that collect property tax revenues from Wauwatosa homeowners.
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School and city finance officials explained the tax landscape and looming costs of potential refunds in a presentation Sept. 28 to the Tosa School Board.
"We have some very, very significant and also very complicated cases," City Finance Director John Ruggini told the School Board. He was joined by City Assessor Sarah Tyrrell and School District Chief Finance and Operations Officer Scot Ecker.
Video of their presentation can be viewed on the district's YouTube channel. Ruggini summarized the pending tax claims for the School Board in this memo.
The Wauwatosa School District faces the biggest potential fiscal impact from what are known as "chargebacks," because the district's tax levy forms the largest portion of Tosa property owners' tax bills, about 37%.