The Kronenwetter Bad Budget Con frontation
Kronenwetter Village treasurer John Jacobs seems to be everywhere this weekend making post after post after post, in a blizzard of false and/or misrepresented information, misdirection, and personal attacks. There is an apparent reason for that, which I'll get to later, but for now, let's get straight to some of the fallacies he has been presenting.
I will have a separate article detailing a number of questionable items within in the budget itself, called "The Return of the Bad News Budget Bloaters".
Misrepresented Information
"Low Mil Rates"
Jacobs talks about a "dropping tax mil rates" below 3%; he is even quoted in a news article about it. However, his comments are "based on 100% full market valuation", which is merely a theoretical estimate by the state of current value. Why is this number even mentioned, other than for the psychological effect that they "sound good"?
The mil rates that he says are "dropping" are meaningless to you, the taxpayer, because you are dealing with your assessed value, not "equalized" value.
Page 4 of the budget worksheet shows that mil rate has actually increased 5.7%, not dropped. It also shows that the tax levy overall, will increase 7% . These are not small numbers, and they are the result of a choice, not a need. https://mccmeetings.blob.core.usgovcloudapi.net/krnwtrwi-pubu/MEET-Packet-d0f58e7cc36042c8a67098eda7feab03.pdf
The bitter reality that he seems so bent on sugar coating with spun figures, is that you can expect your tax bill to increase significantly, and regardless of Jacobs' numerous irrelevant posts about "equalized value", substantially higher taxes are the bottom line fact of the matter this year, and from now on, if the current staff and Village Board have their way.
This is just the beginning of the bad news, because general fund village spending shows an increase of 11.15%. The 5% difference in the revenue increase and spending increase is made up at least in part by robbing the Village piggy bank of $341,618.00 from cash reserves (page 18).
To be honest and realistic, if not for that cash infusion taken from cash reserves of your previously paid tax money, your true tax increase this year would be even $102 higher on a $300K home. The fact is inescapable that one way or another, that money has effectively been taken from the taxpayer in this budget.
So, why did they do that, instead of keeping the reserve and simply taxing more? It's like an informational shell game that they play with numbers. It is all psychology to manage the taxpayers' reaction.. A 4.25 mil rate (that people watch and relate to) looks better than a jump to 4.6, which is more accurate.
As we will see, other factors bring this number more in line with a full mil rate of $5 per thousand. The tactic of raiding Village reserves to create a "balanced budget" is not a reputable practice, nor is it sustainable. It simply skews the numbers to fool the people.
Debt Service Levy and Mil Rates
Mr Jacobs posted this unwarranted personal attack upon me (which is par for the course) thinly disguised as an argument, fallacious as it is,in an apparent attempt to present his bad budget as "not as bad".
He posted this on Nextdoor:
"The Debt Service Tax Levy in 2020 = $1,162,002. The Debt Service Tax Levy in 2021 = $1,110,000. The proposed Debt Service Tax Levy for 2027 budget = $735,003. Therefore, the property taxes to be collected for the 2027 budget is $375,000 - $427,000 LOWER than in 2020 or 2021, when you [meaning myself] were on the Village Board.
This is for debt service. Therefore, it is LOWER debt service payment for next year.
Then see the historical assessed tax rates going back to 2020 and 2021. (see page 4 of the 2027 budget book....or shown on the 2027 budget public hearing notice). The 2020 assessed tax rate = $4.71. The 2021 assessed tax rate = $4.76. However, the proposed 2027 assessed tax rate = $4.25, which is between 10%-11% LOWER proposed for 2027. The assessed tax rate for the 2027 budget is LOWER today, than when you were on the Village Board back in the 2020-2021 period.
Therefore, your statements are INCORRECT again when you look at the facts from 2020 and 2021 in both cases. The present Village Board will consider LOWER debt and LOWER assessed property taxes for the 2027 Budget on 11/09/2026, as compared to the 2020 and 2021 years, when you were serving on the Village Board. Please do not make INCORRECT comments if you don't use the facts in your statements to support them. The Village residents deserve transparency and the facts, not accusations and misstatements over and over, Ken."
This seems to be a perfectly obvious example of the kind of fallacious reasoning Kronenwetter has become known for, and that the Village Board is commonly subjected to. As they say-"numbers don't lie, but there are a number of liars".
A Little Context
With that post, Jacobs attempts to compare 2027 debt service to 2020. He neglected to point out that in 2020 we were in the process of actively REDUCING debt as a practical necessity, while in 2027 Jacobs hopes to massively INCREASE debt simply as a CHOICE, so they can splurge on discretionary spending. His Capital Improvement Plan (CIP) shows that 2027 is just the lift-off of $30 million in planned, discretionary debt.
This seems like fiduciary negligence, disrespect for taxpayers, and an abuse of the lowered debt service that we of the previous Boards provided by making intelligent, disciplined decisions. Let me emphasize that this current plan is intended to accommodate lax management and spendthrift habits. It is not an inevitable need, as Jacobs seems to present it.
The fact seems to be that frugal innovation or efficiency improvements have not even been mentioned, let alone seriously considered.
In 2020 we inherited the high debt results of a 20 year reckless borrow-and-spend policy that I had nothing to do with. A common process by previous Boards up to that time was simply to make interest payments only, with the full amount of the principal due at the end of the term as a huge "balloon payment". Then they would issue new debt to pay the old debt by making that balloon payment for the old principal, and the whole process started all over again; kicking the repayment can down the road.
The main reason that Jacobs can falsely boast online about "low debt service" now, is because I called for the end to that debt-junkie mindset in 2018-2020.
I am not bragging, but just relating the fact that it was me who led the way to successfully reducing the debt in 2020. This is the low debt and debt service cost that the current crowd in control seems to feel a need, almost as if it is an obligation, to now increase, and increase a lot. Reducing debt is still a Comprehensive Plan goal.
I helped to change the Board's thinking first, when I compared their debt-habit which seemed to them as "normal", to someone who paid off one credit card with another credit card, and this being a sign of real problem.
The October 27, 2020 packet, pages 29-35 documents where I again raised the issue and had to literally draw pictures of charts to get the point across that an ineffective administrator and treasurer had cost the Village over $100,000 in unnecessary interest payments by that date (much more by the time the refinancing was completed). This was due to their failures of fiduciary duties and intelligent debt management. I presented the evidence that debt restructuring and refinancing was a no-brainer. Once the Board understood what I was explaining, they were all for it.
Long story short, the 2020 $17 million dollar debt balance was cut in half by 2023. Village debt was down to $8.5 million, which was less than 15% of the Village debt limit.
For Jacobs to cherry pick the years of 2020 and 2021 mil rates to compare to 2027, is not exactly honest, because those two years still reflected the previous high debt service, and it seems that Jacobs would have known this fact. He further discredits himself by blaming me for the 2020 and 2021 mil rates.
The Ignored Correlation Between Lower Debt and Lower Tax Rate.
It appears that Jacobs deliberately ignored the more recent years that reflected a low-debt/low tax bonus to taxpayers. The mil rate for 2021 for example, was 3.74, 2022 was 3.42, 2023 was only 3.32.Why didn't Mr Jacobs compare his rate of 4.25 to those years of the low debt/low debt service years?
We had up to 93 cents in lower mil rate in those years than the 2027 budget mil rate of 4.25. Those years are low because they reflect the direct benefit of my 2020 efforts, and the Board's 2021 refinancing. Effectively, that refinancing effort created a $275 tax reduction on a $300K home.
To make his example even worse, Jacobs neglected to point out that his 2027 levy DOES NOT INCLUDE the additional debt service increase that this budget defers to the 2028 mil rate.
Using rough numbers, the borrowing that is approved in the 2027 budget will cause the tax on a $300K home in 2028 to automatically increase by $95 to pay debt service on the borrowing that the 2027 budget creates, Realistically and more honestly, it effectively creates a $5.00 mil tax rate due to that delayed increase, when added to the defacto increase caused by the $341,000 transfer previously discussed..
Bottom line - a $300K home paid $996.00 in January 2024 under our low debt plan.
That same home will pay $1,275.00 village tax at the proposed 2027 4.25 mil rate, but it is also locked in to pay $1,370.00 the following year at the automatic 4.6 mil rate, and $1,500.00 at the effective $5.00 mil rate.
This is nothing to be proud of, as Jacobs seems to be
So in summary, card-stacking misinformation aside, in the Village boardroom Jacobs can fool the crowd because they think they are a "team" with staff, but we outsiders consider lies of omission to still be just lies, and cherry-picked facts do not fool taxpayers. There is a difference between "team mates" working together, and bamboozled "useful idiots" being "worked over" by a number of psychological effects, but that is a subject for another article.
Apples and Oranges.
In addition to the numbers game mentioned above, the 2027 budget is not comparable to the ones like say, 5 years ago because they are fundamentally different.
Most earlier budgets did not need to borrow to make ends meet, but instead they included setting aside a few hundred thousand into capital savings funds, earmarked for projects like road rebuilding, and capital equipment like dump trucks, fire trucks, etc.
In other words, they added to the various funds, including the reserve fund, rather than draining them to cover operations.
Not so anymore. In this budget, that cash formerly set aside, is now being absorbed into the increasingly bloated operational costs of Village government. Most notably, the police department's million-dollar increase in 4 years. This money-pit alone has driven Village finances off a cliff, which is why $30,000,000 in borrowing is on the table.
So the money that formerly was designated to pay for capital expenditures is now planned to be borrowed money which will cost the taxpayers an extra 40-50% in interest and payments for years to come. This additional cost of interest further degrades the ability to pay for other, more productive operational expenses.
Most of the money left in any capital fund at this time, is itself a surplus result of over-borrowing a couple years back.
None of the upcoming debt expenses for roads or equipment are reflected in this budget, but are set up like a time bomb to drop the hammer on taxpayers in 2028 - 2038. These costs are currently planned to increase massively in the 2028 budget, and planned thereafter to keep increasing like Weston's did.
This proposed budget, like the 2026 budget, has been designed around a "tell us everything you want" basis for the staff, instead of a "what are your needs", or "where can we get more efficient, and actually cut spending?" The concepts of skilled management, cost cutting, or resource efficiency do not appear to be on the table for consideration..
The CIP
A long range CIP is nothing new. See pages 29+ of the 2022 budget draft for an example.
The thing that is new, is that this CIP has borrowing baked into it, and what should alarm everyone is that the 2027 portion of the CIP is scheduled to be approved by resolution as a document separate from the 2027 Budget.
The meeting packet contains Resolution 2026-014 "A RESOLUTION TO ADOPT THE 2027 BUDGETS FOR THE DEBT SERVICE, SPECIAL REVENUE, CAPITAL PROJECTS, AND PROPRIETARY/ENTERPRISE FUNDS." The Capital Projects Fund includes a proposed budget for two large expenditures - $200,000 for park equipment, and $2.89 million for a Road project.
The first appears to be a spending cap on equipment that has already been discussed in committees. However, I have seen no authoritative information at any public meeting to justify the $2.89 million road project cost.
It's just a number that appears on the page, and it is an extremely high number. Current rates for resurfacing would put Maple Ridge Road at about one-third the stated cost. Typically, budgeted projects like this are later examined, and may come in under budget, but in this case, the $2.89 million is not even in the same ballpark.
What should alarm every taxpayer, is that Resolution 2026-15 VILLAGE OF KRONENWETTER, MARATHON COUNTY, WISCONSIN A RESOLUTION TO ADOPT THE 2027 CAPITAL IMPROVEMENTS PROGRAM (CIP) BUDGET includes a restatement of the same expenditures, but it also specifies some of the funds coming from issued debt.
Resolution 2026-15 appears to be superfluous given the fact that 2026-14 covers the same spending. The only reason that I can see for 2026-15 to exist, is to pre-approve the borrowing allegedly necessary to fund the projects. This document appears to pre-approve the issuance of debt at these levels when no factual basis has been shown to substantiate the need or the amount.
In other words - much like the over-borrowing for Kronenwetter drive a few years ago, the intent here seems to be "borrow extra now, and we'll figure out how to spend it later".
The point here is that Resolution 2026-15 is unnecessary, as its only apparent purpose seems to be to pre-approve borrowing in amounts that appear grossly overpriced, and have no history of factual, public justification.
The $1.2 million already on hand for the purpose should be more than enough for a mill and overlay of Maple Ridge Road. Any claim to the contrary should be closely scrutinized.
Budget Secrecy and Exclusion of Stakeholders
The 2026 and 2027 budgets have been prepared entirely without public awareness or input until the very last minute, by which time the fix is already in, and nothing of significance is changed by the Board, let alone by public input. I pointed this out at last year's budget hearing.
Treasurer Jacobs has repeated claims on line that he has been transparent with the Board, the committees, and the public regarding the Budget process, stating that involvement began as early as February, 2026.
However, the evidence shows that these statements are just not true. He seems to consistently confuse the matter with the idea that the Capital Improvement Plan (CIP) is "the budget" when it obviously is not. He admits that they are two separate things when he says that he cannot create a budget draft until October.
The budget draft IS "the budget", and that is what no outsider is allowed to see until a few days before it is approved.
A publicized Capital Improvement Plan is not the same as a "budget" by any stretch. By his own words the CIP is simply a non-binding plan. It would be similar to what it appears he proposed in Weston in 2017 just before their debt skyrocketed. While a CIP would certainly affect the current budget, they are two completely different things.
The public and to my knowledge all committee and board members have been entirely locked out of actual budget preparation until very few days before the actual Budget meeting. This is not what I call "transparency".
Jacobs says he cannot provide a budget draft before October.
He apparently means he will not provide it, not "cannot". The locked-down black box of this process seems to be his choice based on his own convenience, and the Board apparently supports that choice. Other municipalities have their budgets approved a month or more earlier than Kronenwetter, making any claim of "cannot" seem disingenuous.
The timeline Jacobs provided in the July APC packet has not been kept. It states "Review 2027 Budget Guidelines & Set Expectations" for August 24, but nothing like that is on that agenda. So it appears that there are no "guidelines or expectations" set by the Board; the staff is apparently in control. There was no opportunity for APC to do that either, and most importantly, no opportunity for the public to review or engage in any of it.
The timeline does not mention anything about a "preliminary budget" until mid-October. By this time "preliminary budget" is a misnomer. It is effectively the "final budget" because no stakeholder had any realistic opportunity to read and digest the numbers in order to have any real timely input for any changes.
Genuine Transparency and Public Involvement
As an example, let's compare the current secretive, last-minute budget approval rushed process to what had been done in the past, and to what Jacobs says he is "unable" to do.
The following is from the Administrator's Report in the VB meeting packet of Aug 24, 2021, Page 5 (my emphasis):
"I am working with the various committees through the budget document. The Community Life, Infrastructure, and Public Property (CLIPP) Committee and the Administrative Policy Committee (APC) have already seen the draft budget. The Utility Committee and the Plan Commission will see the budget at their meetings in September. Due to both committees having their regular meetings scheduled in August canceled, I will be offering to present the budget documents at a special meeting of either committee so that each committee sees the budget twice."
The open process described there seems a world apart from what we saw again this year.
In addition to committees, the Board also saw the budget document and discussed committee recommendations and adjusting the budget as it was developed. Obviously, ALL of these meetings were opportunities for the public to see the draft document in the packets (not just summaries, commentary, or a "CIP Plan) and had multiple opportunities to provide input.
This closed process that Jacobs seems to insist upon appears hostile and disrespectful to the taxpayers, and completely contrary to the Village Mission and Vision statements, as well as to make an utter sham of the Village Comprehensive Plan goal of Public Engagement which says:
"The Village will strive to develop an informed citizenry that provide valuable input to the Village’s decision making processes."
I have compared creating a budget to building a house. Changes are much easier in the planning stages or even sometimes in the building stages. A larger window for example, is not much of a problem in the framing stage.
Once the house is built and ready to move in to, a larger window is much more difficult to do, and forget ever trying to enlarge the basement. It's all too late for that.
It appears that Jacobs has made sure that he has provided a "finished house" obviously knowing that nothing of significance will be changed.
He acts as if 2-3 days is plenty of time for the public and/or elected officials to review the budget draft and prepare questions or comments on a document that he and others took weeks in crafting. This is not reasonable, and it conflicts with the Comprehensive Plan mentioned above.
Jacobs also claims his process is "open" because the public can provide questions and comments at the Budget Hearing. That comment seems very condescending, as if he is talking to children. It is almost an insult, considering that just like last year, the budget is a done deal before the hearing, and everyone knows it; aside from a minor a change of perhaps a few thousand dollars just for show.
As I have repeatedly identified the fact that the budget is determined by what staff "wants", thereby setting budget policy with the "fix" intending to be in before any outsiders (Board, committees, public) even get to see it.
Any public input at this point at the hearing would simply be theater, just as the two Village Board workshop meetings seem to have been. In contrast, the early involvement process of years past, put everyone equally at the ground floor level of budget creation.
The term "the fix is in" sounds a little shallow, but it is no less true. This is not only because the budgetary "wants" and other wrinkles have been worked out behind closed doors, making any change a practical difficulty, especially at the 11:59 hour before the November deadline, but also the overwhelming social and psychological factors make any change, disagreement, or input a non-starter, even without any politics involved.
The current closed-shop budget process clearly does not work as any type of realistic democratic or open government, even-handed process. To pretend otherwise is not being honest with yourself.
The Village Board seems throughout the process to just go through the motions of review. The actual changes made were a token $5000; similar to last year, when in fact it needs major corrections.
In Closing
Jacobs' excessive posting activity seems to not make sense, other than as a means to clutter up the social media venues with disorganized information and off-point ramblings seemingly to burn out public attention on this subject, thereby making any organic public posts on the matter harder to find through all of his chaff.
No other public official that I have ever seen has been in such a frenzy to defend a proposed budget like this, and using such tactics. Jacobs doesn't even live here. He doesn't pay for the consequences of his actions like resident taxpayers have to.
This appears to have been another successful operation in getting past a statutorily required budget process while meeting the minimum or less, legal and ethical obligations for meaningful public awareness and involvement in determining the use of public funds.
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