long post with with hopefully some answers...
I have been reading with interest the continual comments about the County Wide Schools Facility Tax. It has now been approved by every school district in the county by, I believe, a unanimous vote by each individual board. I certainly see that there are myriad questions about the tax and just as many perceptions good and bad about the potential for the tax.
Though I cannot speak for any other school district besides Unit 4, I will try to answer some of the comments that have been asked on this blog...
- Why go for the Max 1%?
Frankly, I don't think the ILGA intended for the TAX to be used as a mechanism for Property Tax relief. I think they intended to try and help school districts by providing another mechanism to fund capital projects. I may be wrong in that belief, but that is what I think. That being said, when the districts in Champaign County got together at the Regional Office of Education to discuss this tax, the key thing that we in Unit 4 talked about was that we would not support this new tax without some kind of relief for property owners. We feel that it is imperative that any reductions that can be made are made. IF we were to ask for 1/4%, we would be able to abate the same 9-10 cents /100 EAV that we are allowed to with this tax (AGAIN IT IS ONLY FOR CONSTRUCTION DEBT AND FACILITIES ISSUES, NOT SALARIES). That abatement in Unit 4 is approximately $15M. That is all the debt we have out and al we can abate with this potential revenue source. People can say all they want that it is not enough and I would totally agree. However, it is all we can do.If our only goal was to abate property taxes, then we would simply go for 1/4%. actually it begs the question if we are not going to do anything new other than pay off one type of debt with a different revenue stream, why would any district do that. In order to have construction bond debt, a district had to ask the voters for approval for property tax increases to begin with. Why would a district go back to the voters to ask for approval to do the same thing with a different source of income. Doesn't make sense to go back ask for something you already have
This revenue source can be used for additional stuff, hence the 1% request. In Unit 4, we can dramatically increase the efficiency of our bldgs and put in A/C. Everyone of us works in an air conditioned environment and I often wonder why teachers and students should be asked to do something different than what we all do... We can also satisfy the consent decree requirements for the additional seats north of university ( yes I know that not everyone agrees with this, BUT it is a legal settlement that past boards agreed to and it is not open for contestation in court). We can update the infrastructure to support the computers needed for today's learning environment. We could build a school south of University if needed. More to come later on this subject.
If another district wants to post about their plans, that would be great. - Why are you doing to reduce the cost of doing business?
Since I have been on the board, we have delayed a textbook adoption by one year, saving the interest on $700,000. We have refinanced debt at a much lower rate saving several hundred thousand dollars in interest payments. The night I was elected the previous board cut $2M in annual expenditures, We have bought lower priced energy through co-op arrangements, we have not filled at least 15 positions that I am aware of off the top of my head that have been vacated and we decided not to fill them to save money. Just a name a few of the items...Each year staff throughout the district ask the board for programs to increase this or that. The vast majority have been met with good idea, but we can't afford it right now. Even this week we were presented with middle school athletic program additions, last month it was additional foreign language offerings.
All of these ideas are terrific and the vast majority need to be added as soon as possible. However, they can only be looked at as part of a total budget package. An individual request for $100K in expenditures seems insignificant in a $95M operation, but we get 10 such requests/ideas a month. Those add up to a major deficit.
2 months ago the board was asked to give a list of programs we would like to add because they are things that community members have asked us to do. That "dream sheet" combined with staff requests added up to close to $28 Million dollars for year!!!! Obviously there is no way we can or will approve that kind of increase.
On another note, Schools are highly regulated about how we spend and collect taxes. The hold the line/reduce costs items are typically found in the Education fund/Transportation areas. Taxes are levied into individual funds and increases are limited by PTELL. Those hold the line/reduce costs are not generally found in the O and M and Health Life Safety areas. These are generally low Levy's and are not near enough to pay for recurring costs as facilities get older and older. Look at some of the facilities in Unit 4 and the county and you can see just how much cost reduction there is when it comes to stretching the maintenance dollar. Those folks are masters of stretching a dollar for building issues.
- This is simple a "Bait and Switch"For some this is a tax increase. (those who don't own property in Champaign County)
For others this will be a tax decrease (those who own property in a district that plans to abate some portion of the property tax bill related to construction debt and who don't spend as much on the retail goods) I suspect a good portion of the 'middle" class will fall in this area at least in Unit 4)
For others it will be a wash. It will reduce property taxes and you will spend enough on taxable items to negate the property tax savings.
If anyone is saying that some will not pay additional money in their total tax package (property, income, sales, etc) they are wrong. Some will pay more and some will pay less, most will probably pay about the same... those are the facts.
However, for the same amount for the property owner, the schools throughout the county could be greatly improved.
If facilities don't matter, than why do so many people ask me why we can't have facilities like Normal Unit 5? I am asked that often.
I am sure that I will have more later. Especially a detailed plan about how we in Unit 4 will spend this revenue if approved. Including a mechanism for accountability.
If you have any questions, you can feel free to contact me at tomlindw@comcast.net or 217-202-6841
Dave Tomlinson, President
Champaign Unit 4 Schools Board of Education
I've tweaked the formatting on Dave's post, and kicked it to the front page for discussion.
I don't have time to comment right now, but I've asked some of the questions to which Dave is responding, and I want to thank him for taking the time to share his thoughts here.
1) Will someone eventually tell us who will get what property tax decrease?
2) Will we be told *exactly* how this money is to be spent? i.e., has a contingency post-tax budget been drawn up and approved?
3) A lot of this is one-time spending. Is there an automatic repeal built in?
4) This assumes that the money allocated for facilities and buildings in the budget prior to levying the tax increase is insufficient; will there be a guarantee that this sum will be added to the funds acquired through the tax increase and not re-allocated for other use? In other words, is the increase designed to supplement the current facilities allocation or to replace and augment it?
If the answer to all four questions is "yes", I would tend to support the increase. If not, not.
Thank you for this extensive litany of comments. I intend to print this out for future reference when the school board does not reduce the unit 4 assessment on the property tax bill and/or does so and then the next year raises the tax assessment. There are so many ethical problems with this tax: it continues the aspect of regressive taxing to fund schools and interestingly exempts pools and farm equipment; allows the state legislature to further escape adequate funding of schools; captures anyone who does business in the county to fund our schools whether there is a benefit to these people or not; and causes all school boards to have a momentary thought about decreasing the property tax assessment until they lay down and the thought passes. By taking this action, if the county passes such in November, the state legislature will never move to fund schools via the state income tax, as it ought to be since this is a non-regressive tax. One actually will not be saving money if the 1% is passed based on a reduction of $30 on the tax bill. All one has to do is spend over $3000/year on items other than groceries, medicines, and farm equipment and this increase is costing each person addition funds. Put the elbow grease to getting the legislature to step forward, pick up their responsibilities to fund school through the state income tax.
Pattsi Petrie
What do you say in response to the fact that this tax puts an unfair burden on students of the University of Illinois? There are roughly 40,000 students of which I'm guessing 35,000+ of us never plan to use public schools that this tax affects. The University does its part for the community supplying several thousand jobs both directly and through student spending. With this being the case why should students be forced to pay this rather large tax increase if they see no benefit from it? As I am from the suburbs my family already pays over $11,000 in property taxes a year which supports our public school system and I do not understand why students should be forced to support another public school system that they have no interest in.
Pattsi,
I agree about the $30 example you gave. I have many times cited my own tax bill. My taxes will go down $63 or so annually. I will have to spend $6300 or so annually on items subject to the tax in order to not see an actual reduction.
Your comments amount eliminating the tax property tax one year and adding it back the next are not possible in a Tax Capped district like Unit 4. We cannot raise tax rates without voter approval. In fact our RATES have dropped each year since PTELL was enacted in Champaign County. $4.40 or so in 1998, your tax bill should say this year $3.62 or so per $100.
If the sales tax is passed at 1%, your rate will drop to around $3.52 in 2010 when the money starts to come in. That drop does not include the annual PTELL drop of 5-10 cents per 100 each year.
Dave Tomlinson
With this being the case why should students be forced to pay this rather large tax increase if they see no benefit from it?
Since U of I students are allowed to vote in Champaign County elections (even though most maintain no permanent residence here), it seems only fair they should bear a portion of the tax burden their votes help create. In other words, since U of I students typically vote 70% for Democrat candidates and their principals of higher taxes to pay for more government services, it's about time they share some of the that tax bite. Welcome to reality son.
"...a district that plans to abate some portion of the property tax bill related to construction debt and who don't spend as much on the retail goods..."
Having been born in the State of Illinois, the "some" in your statement, Dave, will have to be defined for me to support this additional tax. Yes it is a trust issue.
Thank you for all you have done and tried to do todate.
Pattsi speaks up for the principled liberals - well stated Pattsi.
And U of I student speaks up for that mass of short-term residents. Maybe this will be an issue to drive conservative students to cast votes here instead of their home districts - go get'm Frank.
Sorry, I still don't buy this. In a time of increasing burdens on taxpayers, we are looking at an astonishing number of requests for more tax money. It's as if our elected officials live in some parallel universe. Just once, I would like to see some body of government, any body of government, exhibit the same sacrifice that they are asking from everyone else. The rest of us have to live within our budgets and do without--maybe it's time to cut back on the number of administrators, and the size of annual raises given out. It's not to say that we don't appreciate teachers, but the rest of us are doing without substantial raises while the bad economy runs its course. I don't know why government employees shouldn't experience the same pain the rest of us do.
Dave, I do not believe this tax is a good neighbor policy. The core agrument of this tax is that it takes advantage of non-residents, AKA U of I students.
The county population is around 190,000, with 40,000 being U of I students (rough numbers being used here). So more than 20% of this tax would affect students, assuming no one outside of Champaign County shops here. I would estimate upwards of 30% of the sales tax would be a burden on people who are not permanent residents of Champaign County since we are a regional shopping center with North Prospect, U of I parents, and football games.
I believe the proponents of this tax need to be honest: this tax is a tax burden shift to U of I students, arguably people who can't afford it.
Is this fair?
I believe the propents of this tax need to be honest: this tax is a tax burden shift to U of I students, argubably people who can't afford it.
Now if only they would come out in droves and vote to prevent this from passing...
Now if only they would come out in droves and vote to prevent this from passing...
This made me laugh. U of I students have voted in large numbers in recent years to saddle local property owners with higher taxes (nursing home, developmental sevices, county health dept). Now when a tax is proposed that they would actually experience paying, they should "come out in droves" to vote against it. Oh, that's a good one.
I am happy to entertain on this fine Friday afternoon Dr. Davis. While I don't disagree with your statement that "U of I students have voted in large numbers in recent years to saddle local property owners with higher taxes", I feel obligated to play the devil's advocate and suggest that the majority of these students also paid property taxes passed down through their rent.
I generally don't like new or higher taxes, but to be honest, I have not made up my mind yet on this sales tax issue and am looking at different opinions and thoughts on this site, and other places to try and form an opinion on it. My point in my previous post was simply this, the voters must approve this tax for it to go into effect. That is the one thing that I am sure of at this point.
I feel obligated to play the devil's advocate and suggest that the majority of these students also paid property taxes passed down through their rent.
Well, obviously property taxes are a component of the rent charged, but I would suggest that supply and demand have a far greater impact on rents. Plus, until landowners provide their tenants with a detailed breakdown of the percentage of their rent that actually relects property tax, I fail to believe that college students consider the impact of property taxes upon their monthly rent bills. However, homeowners that don't escrow (especially retired folks) struggle to come up with thousands per year to pay property tax. Moreover, I would suspect that a large percentage of campus apartment dwellers receive rent subsidies from their parents, thereby lessening the impact of any property tax ramifications on that rent.
Oil Man asks for a definition of "some".
I can only speak for unit 4. Our all not some is 10 cents per 100
Other districts in could actually be less, more or none than the 10 cents. It is solely a function of the amount of EAV in your district and how much debt you have to pay down. The decision on how to use the money lies with the Boards of the respective school districts in the county for there pro capital share if approved.
Dave
Thank you, Dave.
"Fair Tax" Seems like a perfect example of an oxymoron to me. Are motor fuel taxes unfair because they are returned to the community where the fuel was sold not to the tax payer's community? Are visitor taxes unfair?
I 'Fair Tax would only be paid by those who receive the benefit for which the tax is being collected. ANYONE care to list those?
Ok, so there are no 'Fair Taxes' oil man.
Give us a "meaningfull" reduction in these exhorbitant property taxes. Not the $20 on a $3,600 bill ...I can see the district taking the additional tax and only easing these property taxes a fraction.