As Oshkosh school leaders try to convince us that they need more money again, one of them decides to give us a little insight into his philosophy on spending cash. Former Board President John Lemberger and current President Matt Wiedenhoeft were engaged in a conversation Wednesday night about the possibility of expanding Lakeside Elementary School--at a cost of $2.4-MILLION dollars. Wiedenhoeft expressed concern about the District taking on even more debt at this time. But, Lemberger brushed off those concerns with this comparison to his own financial situation:
Lemberger on his love for debt
As someone who is sharing a debt-free life with my wife, Lemberger's comment certainly caught my attention. While we took out a mortgage to purchase our $122-thousand dollar home as well, we chose to pay it off in just six years. During that period we paid $17,403 in interest (yes, I kept track)--or 14.3% of the home's value. Based on property records available on the City of Oshkosh Assessor's site, Mr. Lemberger paid $68,000 for his house in 1996. At the average rate of 5% on the 30-year loan that he brags about, he will pay $52,100 dollars in interest on his home--or 76.6% of its original value.
As for the car loan, my wife paid $24,000 cash for her current vehicle. Under Mr. Lemberger's "borrow instead of save" philosophy that car (with a 10% down payment and interest at 7%) would cost a total of $28,138--or 15% more than paying cash up front. Mulitply those ratios by the six to seven cars a married couple will own over their lives together and we're talking 24 to 28-thousand dollars lost to just interest payments.
And listen again to the way Lemberger says "I want a house NOW". The tone reminds me of my three year old niece when she is told that she has to wait to do or get something. Unfortunately, it's that attitude of instant gratification--no matter the cost--that has led many an American family to the front gates of the poor house in the past 20-years.
As a private citizen, John Lemberger has every right to run his finances however he wants. If he wants to borrow money and limit his financial opportunities then he can go nuts--because he is only hurting his own family and children . But when he applies the same financial philosophies to the finances of the School District--and chooses to limit the opportunities for tens of thousands of families and children--you have to question the logic in giving him any more money to spend.