The 2012 Geneva Community School District Tax Levy

Why the Geneva School District doesn't need a 1.5% tax levy

Based on what has been released to date, I believe that the School Board did an excellent job of representing the best interests of the taxpayers during the recent teacher agreement talks. I believe the board listened to comments from the community and balanced that with the financial situation of the district.

That being said, we all need to realize that the community has many challenges to face over the next several years. The board members take an oath to be good financial stewards of the District and taxpayers’ assets. It is the community’s responsibility to share their opinions with the board. This interaction allows the board to evaluate all options and make decisions that benefit the entire community. The administration works for the board and ultimately the board is responsible to the residents through the election process.

In my opinion, disagreeing with the board in no way reflects on the overall job that they are doing. Since 70 percent of local property taxes go to the school district, everyone has a stake in how our money is spent.   

At last Monday’s Geneva Board of Education meeting, the board approved a resolution requesting a 1.5 percent tax levy for 2012. Many people, even some that attended the meeting, believe that a 1.5 percent tax levy was approved. It wasn’t, only a resolution was approved. The tax levy is scheduled to be voted on at the Dec. 10 meeting.  https://www.geneva304.org/d304_finances/documents/2012_11.12_Tax_Levy_Presentation.pdf

Why the board should consider a 0% tax levy

The tax levy determines the amount of revenue the district will receive from property taxes in June and September 2013. 

  • The William Blair & Co. projections of an EAV turn around by 2015 is not going to happen.  The is no reason to believe that starting in 2014 the EAV will increase .95 percent and then continue a positive growth of 4.0 percent through 2031. Assessments are based on a three-year rolling average. It is impossible for the EAV to grow almost 1 percent when it has decreased 6% and 2 percent the last two years. The numbers just don’t work out for a positive trend in two years. See page 4 of the linked presentation.  https://www.geneva304.org/d304_finances/documents/Presentation_October_22_2012.pdf  Based on the school reports published by the Illinois State Board of Education, enrollment in Geneva has declined by at least 124 students since the 2008-09 school year. If this trend continues, there should be a decrease in the operating budget.
  • The debt service payment will increase by $1.4 million to a total of $17.3 million in 2013. This amount is not included in the tax levy and is collected separately through school property taxes. 
  • The 2012-13 school year budget had operating revenues of $61.3 million.  There is a projected $3 million surplus in the education fund and a planned $7 million deficit in the operations & maintenance and transportation fund.  The $4 million will be taken from the reserves.
  • Every option presented to the board projected revenues above last year’s $61.3 million. The revenue ranged from $64.3 million at 3% to $63.4 million at 1.5 percent. If a 0 percent levy is approved, the projected revenue is $62.5 million. That is $1.2 million more than received this year. Keep in mind that, without the capital expenses, there was a $3 million surplus this year.  Why does the board need more money next year if they did not spend all their revenue this year?  Please review the tax levy presentation https://www.geneva304.org/d304_finances/documents/2012_11.12_Tax_Levy_Presentation.pdf
  • The $901,500 in “cuts” mentioned with a 1.5 percent levy aren’t cuts at all.  The 900k is the difference from the maximum amount received with a 3 percent level vs. a 1.5 percent levy. A 3 percent levy would actually generate $3 million more than this year.
  • This may be the last year that the board can approve a 0 percent tax levy.  If EAV continues to decline, there will be a smaller base number to start with.  It might not be possible to reduce expenses enough to avoid a tax levy increase.  Also, four board seats are open in April 2013. Based on the election results, there may be a new majority on the board. 
  • The board projects a $57 million reserve fund as of June 30, 2013.  Should there be unexpected expenses next year; reserve funds can cover any cost.
  • The board should be reviewing all expenses with the intent to reduce overall expenses.  In this economic environment, the emphasis should be on reducing expenses not on getting excess revenue.

For the reasons listed above, the board of education should consider a 0 percent tax levy for 2012. 

For those interested in learning more about how the tax levy is calculated, GenevaTaxFACTS is sponsoring two forums this week. The tax levy will be discussed step by step and you will have the opportunity to ask questions. The meetings will be held this Wednesday, Nov,  21 at 7:30 p.m. and Saturday, Nove. 24 at 9:30 a.m. If interested, please send an e-mail to bobm@genevataxfacts.org and I will forward the details. All are welcome to attend.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Sandra Ellis November 19, 2012 at 03:15 PM
Bob, an excellent recap and analysis! Has there ever been a projection of estimated tax increase from the greatly increased debt service in 2013 that will be in addition to the tax levy increase? Assuming the same $315,000 home? I think we all need to project what to anticipate as we are only 7 months away from our first increased tax payment. Do you know if we can also anticipate increases from the other taxing bodies on our typical Geneva bill? Of course, the biggest difference we can hope for is a REAL reduction of expenses from our school district budget but as taxpayers we are being hit by all sides!
Bob McQuillan November 19, 2012 at 06:12 PM
The tax levy presentation from 2011, presented by Donna Olberg, included projected amounts for the debt service rate thru 2018. I have taken those and calculated the debt service portion on a home valued at $315,000 and added it as a attachment to this article. You can see that the total school tax rate will increase to 7.02% and then drop because of a projected increase in EAV. That of course isn't a guarantee. You can also project future school taxes using the tax calculator on the home page of www.genevataxfacts.org The city has already announced they plan to increase the tax levy. I believe the library has discussed a 0% levy. I have not heard anything of the Park District's plan. Space is limited for the Wednesday and Saturday tax levy meetings, please e-mail bobm@genevataxfacts.org if you plan to attend.
Sandra Ellis November 20, 2012 at 11:56 AM
OK, I see by the school board presentation, the inrease in their operating budgets will result in a $497-340 projected tax increase. If I add your projection for the debt service from your added chart, then I figure an increase of $157.50 which brings me to a TOTAL projected tax increase bill next year of $655 to $498 on that average $315,000 home and this does not include the city's increase or possible park district increase! If I use Option 2 on the GenevaTaxFACTS calculator, it is quite close to that total projection. So, it looks like our taxing bodies are not giving any gifts this Christmas! Makes me see RED and I don't mean Santa's suit!
Bob McQuillan November 20, 2012 at 02:18 PM
The $497 - 340 increase already includes the increase in debt service because the debt service tax rate was included in the options given to the board. What the calculation shows is that even with a 0% tax levy, your taxes will increase @$157.50 because debt service repayments are not included in the tax levy process. Debt service is seen as a contract between the district and the bond holders and must be collected no matter what the tax levy. That is why debt service repayment does not fall under the tax cap (lower of 5% or CPI).
Sandra Ellis November 20, 2012 at 02:27 PM
OK, thanks! Looks like I am a good candidate for more understanding then at the informational meeting tomorrow night.


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