I've obtained this memo sent to Champaign County Board members outlining the announced plans of each of the County's school districts if the proposed one percent sales tax increase for education facilities passes in November.
There's no real new information in this, but it is a very useful summary of plans. You can read the whole thing yourself, but you'll note that every district which has existing debt is currently promising to use sales tax revenue to abate or eliminate that debt (and reduce property taxes as a consequence), although the amounts vary.
Key information to remember (taken from the memo):
Each of the Boards of Education of the 14 school districts in Champaign County has passed a resolution requesting that the Champaign County Board put the question of imposing a 1% sales tax for school facility purposes for submission to the voters of Champaign County at the November 4, 2008, election. If this resolution passes and the County Board implements the full 1% sales tax, the revenue can be used for the following purposes:
- Pay for projects as you go
- Leverage revenue for current needs (use revenue to pay for bonds)
- Retire existing debt issued for capital purposes (abate taxes)
- Any combination of the above
Discuss.
Remember, in actual fact this is not a reduction in property taxes, is regressive, and this tax will go on motor fuel, as you go to vote in November. Do the math to figure this out. And after several years, my bet is that there is not even be any property tax reduction because the school districts will figure out how to spend money not used for building for other reasons. I have been told that the county board will be approving this referendum.
Pattsi Petrie
I'm disturbed that only two districts (Unit 7 Tolono and St. Joe HS 305) could put an actual dollar amount on what they could abate. Good Job by Superintendent Shonk and Superintendent Acklin for doing their homework. Where are the numbers for Champaign & Urbana - if you want this to pass, tell me how much will be in my pocket.
Of course, over the course of one year, I'm sure I will pay more sales tax than the abated property tax.
time to get candidates lined up for school board elections :-)
John,
I am confused. From the beginning, Unit 4 has said that we are abating all of the $15M we have outstanding in construction debt and that each property owner will receive a 9-10 cent per $100 EAV abatement.
Dave Tomlinson
Dave -
My comment is geared to the letter from County Superintendents to the County Board. The Unit 7 and St. Joe 305 Superintendents (districts that have successfully passed referendums in the past few years) got to the basics in their snyopsis that is included in this post. They flat out say here is the actual dollar amount you, the taxpayer, will see in your pocket if the sales tax passes. This is where they know how to play the political game - how to get votes.
I'm flat out saying - tell the voter how much will be back in their pocket (or tell your Superintendent that this is the number he should be broadcasting). This year it will all be about the bottom line. Don't make the voter do the math themselves - people have a short attention span. This is purely a marketing issue - "Vote yes and you get back $250." Makes a pretty easy sell.
Lets say hypothetically my EAV is 18,380. Divide that by 100 and multiply by .1 and I would get back a whole $18.38 if I did my math right. (If the math is wrong please tell me) I wonder if 1 percent of all of my taxable purchases that will be effected by a sales tax increase is greater that $18.38. Can anyone tell me how to vote assuming I want to save as much money as possible? Feel free to play with my numbers. I don't consider myself a big spender but I spend about $40 every 15 or so days to fill up my 13 gallon gas tank. (I know I should just wake up 30 minutes earlier and catch the bus, but that is so much easier said than done) I guess I could by more stuff online to avoid/evade paying sales taxes at all, then I should only be on the hook for the state use tax at 5% or so.
Go Whitesox!!! 1st in the AL central on the way to beating the Cubs in a 4 game sweep in the World Series
First, with respect to Patsi Petrie's comments, is she suggesting its a bad thing that sales tax applies to motor fuel? Just because the price of gas has gone up, discouraging its use still ought to be something our tax policy promotes. That's why the "gas tax holiday" was so roundly lampooned by thinking folks.
Secondly, there is a significant differential impact on economic development in our county depending on our methodology for raising the funds to have decent schools. Sales taxes don't discourage capital intensive industrial development. High property taxes do discourage it. A potential employer thinking of coming to Champaign County or remaining in Champaign County wants lower real estate taxes, but is generally ambivalent towards sales tax.
Lastly, the sales tax is not as regressive as some make it out to be. And it particularly benefits folks who live in regional retail centers. This sales tax to support Champaign County schools will be in good measure paid for by the folks from Vermilion, Douglas, Ford and Piatt Counties, whereas they don't help to pay any of our school's property tax collection.
To parent: let me clarify a couple of points. The reason for mentioning that this 1% will apply on motor fuel purchases is to enable everyone to make an accurate calculation of how much the 1%, a hidden tax, will actually cost each person. Of course, all of us ought to be working toward less use of car and more use of alternative means of transportation. So all of us ought to have been at the Champaign City Council meeting questioning the huge amounts of money approved for new roads and road improvements to move even more cars and thus purchase more gasoline.
Second, that is accurate sales taxes do not discourage industrial development because the industries do not pay these. Yes, industry pays real estate taxes if such have not been forgiven for 10-15 years, the usual amount of time, to encourage a new business/industry to come to a community through tax abatements, TIF, enterprise zones, etc. Therefore the burden is totally on the individual not on new industry. When a community abates, there is a 99% chance that the community does reclaim economically all of the finances that are abated. There is tons of research and literature on this very topic.
I do not understand your comment that the sales tax is not as regressive as people make it out to be. Regressive is regressive. If an individual makes $10,000/year and pays the present sales tax of 7.75% and the person who makes $100,000 pays the same amount, the disproportion is very regressive. And I do not understand ethically why someone who lives in Vermilion, Douglas, Ford and Piatt Counties ought to support Champaign County schools nor do I think ethically people in Champaign County ought to be paying for the schools in the counties you mentioned or any other counties.
Finally, this legislative sham is a perfect shell game so our state legislators do not have to face up to even more budgetary crises than already exists. By doing this, the legislature now has put in place a mechanism so they do not have to make tough decisions about school funding, instead of being mature decision makers and restructuring educational funding to be based on state income tax, which is not regressive.
Pattsi Petrie
Polling the tax increase plan: I received a call last evening asking me how I felt about the sales tax increase. They read about 10-15 statements that are in favor of the increase and if I thought they were good arguments for. They then had 10-15 statements opposing the increase and asked if they were good arguments against. Rated each argument as very strong, strong, weak, very weak.
After asking, the poll taker said that she was hired by “Champaign County Schools.” I don’t believe that such a beast exists…
The polling is being done by Stiffel Nicholas (School bonding firm) on behalf of a consortium of several Champaign County school districts.