School Board Hears Explanation For Tax Rate Increase

Official: Shrinking tax base partly to blame for revenue shortfalls.

The economy’s downturn is forcing officials to go back on a promise made in 2006 to hold down the tax rate.

Tim Neubauer, assistant superintendent for business and finance, told School Board members at the May 9 meeting he has received about 20 calls and e-mails in the last week from residents wondering why the tax rate is increasing from $5.06 to $5.83 for Will and Kendall counties, and $6.03 for Kane County.

As part of a referendum promise in 2006, district officials said they purposely held down the tax rate, requiring the district to return a portion of the tax money it received back to the taxpayers. This lessened the amount the taxpayers paid the district, and also reduced the amount the district collected as revenue.

Because growth in the community was booming in 2006, District 308 officials expected the tax base to also continue growing and provide the district with sufficient revenues, making them feel comfortable telling taxpayers the tax rate would stay at $5.06 for somewhere between five and 10 years.

But when the increase in the tax base did not materialize, funding to the school district suffered.

“In the early 2000s to mid-2000s we saw a situation where property values were going through the roof and exerting pressure on the tax rate to drive it down,” Neubauer said. “People were flipping houses like crazy. Then the fall of 2008 hit and everything went in the other direction. Since 2008, we’ve had the reverse scenario.”

For five years the district was able to hold the tax rate at $5.06 by abating bonds, but officials said they are now at the point where they have exhausted their capacity to restructure the bond payments.

Neubauer said school districts are “all a victim to the same formula” that when assessments drop, the tax rate goes up.

He said lately much of the growth District 308 is seeing is “internal.”

“It’s people having babies,” he said. “We’re not getting it with new houses and that’s not good. With 80 percent of our taxbase being residential this is killing us.”

Board members asked what can be done to lower the tax rate in the future.

Neubauer said the district needs more commercial development.

Board member Lynn Cullick agreed.

“It’s in all of our best interests to lean on our Village Board to aggressively seek that business development we so desperately rely on because unfortunately it’s not up to us,” she said. “It’s the only way to ever change that.”

Neubauer also suggested asking the county clerk to not collect as much in taxes, and petitioning the legislatures to change the methods by which school districts are funded.

He said the district does well at keeping expenses down.

District 308’s operating cost per student is $9,214, the second-lowest among 13 comparable districts and far below the $10,658 average of those same districts, he said.

“We really watch our pennies here,” Neubauer said. “Our operating expense per pupil is a credit to our building leadership.”

oCoMiK May 11, 2011 at 05:51 PM
John I don't know how you don't get the third high school. Our previous board members just wanted to make sure we were ready when the enrollments predicted from their 1957, (or was it 1975?), enrollment analysis actually came to fruition. I don't know about you but I always build my financial projections based on "bubble" economics. Also I will be greatly disappointed if a few Darwin Awards don't find their way to the homes of some of those former 308 board members. oCoMiK
StaceyT May 12, 2011 at 01:00 PM
We've lived in Oswego 11 years now. In that time, our taxes have gone up and the ratings of the schools have gone down. I just received my tax bill and it went up over $450, mostly because of the schools. Then add gas prices on top of that and I'm being squeezed to the point of not even being able to go out to dinner once a week any more. Why is it the American family has to cut back and do more with less but taxing bodies don't? Why do I have to find a way make my fixed income work but the schools don't? They're all full of excuses why they have to increase taxes on me while at the same time I have NOT received a raise for over two years now. I'm told I need to be thankful I still have a job. Why doesn't that apply to the schools? Am I happy about paying more in taxes? Do I think the schools deserve more money given their poor track record? What do you think?
Sally Jamieson May 12, 2011 at 01:11 PM
Stacey, well stated, I could not have said it better. I don't care WHAT the excuses are, the school district cannot keep reaching into our pockets. Guess what? We don't have any more to give! If this third high school is built, plan on the taxes going even higher. Then the town of Oswego can sit back and watch the population shrink because people can't afford to live here. In this tough economy with the value of our homes decreasing, they had NO business raising the tax rate. Do what everyone else has to do, make do with what you have. It seems to me that raising taxes should be the LAST resort, not the first resort.
Leland H. Hoffer May 12, 2011 at 04:51 PM
The focus has been lost and it should be redirected on what is the best way of educating students with revenues available. The Kendall County Property Tax Extension Limitation Law, (PTELL), Worksheet, showed 1.43 of the 5.83768 Dist. 308 tax rate was for the Bond and Interest payment of $28,241,848 which is 24% of the tax rate. Currently school bonds total approximately $390,000,000, almost 20% of the Dist. 308 EAV. State Code limits the debt to EAV ratio at 13.8% or 15% for a fast growing district and we are now no longer fast growing. Dist. 308 received a waiver to 20% in 2003 and in 2006 a waiver not to include the $450 Million bonds in the debt limit. Without an increasing EAV, to produce more revenue, 308 is in a precarious financial situation. The administration states that Dist.308 spends less operating funds per student, (funds for educating students), then most surrounding districts, which means we spend less on education per student but pay a high school tax rate because of Bonds and Interest. Adding more debt will exacerbate this problem. Further borrowing must be minimized and the focus be directed on improving student education even if building facilities are less than what is wanted.
oCoMiK May 12, 2011 at 06:10 PM
This conversation had me pull my latest tax bill. 68% of my whole real estate tax goes to District 308. And mark my word sure enough they'll come back asking for more. I will say Leland is correct. A fair percentage of what we're paying is to service the debt that the district has taken on. oCoMiK


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