School District Looks at 4 Options for 2011 Tax Levy; Tax Increase Is Coming in Every Scenario

Assistant Superintendent Donna Oberg lists four options. A property tax increase for a home valued at $288,000 would range from $307 to $403 in any of the four options.

  • Editor's note: The following are highlights from the Geneva Board of Education meeting held Monday, Nov. 14, as presented in School District 304's "For the Record." Minutes from this meeting will be available at http://www.geneva304.org under the Board of Education link after being approved by the Board of Education at a future meeting.


Per Illinois statute, the district is required to file a tax levy by the last Tuesday in December. The levy sets forth the maximum receipts that can be received from property taxation in a given year. The actual levy rate is determined in the spring in the assessment process.

While the levy is filed by fund, it is limited in aggregate by the Property Tax Extension Limitation Act (PTELL). New property (construction) must be levied higher than anticipated in order to capture all new growth as it comes on the tax books because, once lost, it can never be recaptured.

The district’s levy request for the 2011 tax year will be adopted at the December 12, Board of Education meeting. The total levy request for 2011 is $77,844,981, representing a 4.17 percent increase over the 2010 actual levy extension.

Actual levy dollar amounts won’t be known until March or April 2012. Since the tax cap formula limits the actual amount extended, the district will not receive the full levied amount requested for operating funds.

Illinois statute does not require a Truth in Taxation Hearing to be held if the levy increase is less than 5 percent.

Donna Oberg, assistant superintendent for business services, reviewed preliminary tax levy information, including components of the tax levy, a 10-year EAV history, new property growth and the Property Tax Extension Limitation Law, PTELL, which is commonly referred to as the tax cap.

PTELL, or tax cap, was enacted in 1991 and was designed to limit the increases in property tax extensions for taxing districts. PTELL does not cap an individual’s property tax bill or property assessment. PTELL allows taxing districts to receive a limited, inflationary increase in tax extensions onproperty—at the level of the Consumer Price Index (CPI) or 5 percent, whichever is less.

The limitation does not apply to new property (new construction), which allows taxing bodies to recoup their fair share of tax revenue for new property. There has not been a CPI of 5 percent since PTELL was enacted.

Originally, PTELL applied to only collar counties but currently 37, or about one-third, of Illinois school districts are impacted by PTELL. Current CPI is 3.9 percent and will probably taper off at about 2 percent. Debt service is levied by the county and not the school district.

The Limiting Rate Calculation, which is PTELL, is based on the PTELL formula: prior year extension x (1 + Lessor of 5% or CPI-U. When the EAV goes down, the tax rate goes up. When the EAV goes up, the tax rate goes down. All limiting rates decreased from 2002 through 2009, and increased in 2010 and 2011.

"Data, Assumptions, and Calculations for Levy" were also reviewed. The CPI-U equaled 1.5 percent in December 2010. The estimated EAV percentage change from 2010 EAV equals a negative 3 percent. New property is estimated at $12,597,282 but (the district) will levy at $15 million in order to capture all new growth (construction). The needs of each fund are estimated and the district will “balloon levy” in order to protect the district from estimated differences.

Oberg presented four options for the board’s consideration relative to the levy.

Option 1: Levy with no refunding or abatements and full CPI-U. Increase over prior year (5.31) — .42 per $100 EAV. Average increase per home with a market value of $288,000 = $403.

Option 2: Levy with 2011 refunding, 2012 refunding and abatement, Education Fund Levy abatement, and full CPI-U. Increase over prior year (5.31) = .23 per $100 EAV. Average increase per home with a market value of $288,000 = $307.

 November 2011 refunding completed at a savings of $742,000. January 2011 refunding will complete the 2004A refunding at a projected combined total savings of $1.033 million. November 2012 refunding and abatement moves debt out one additional year at a cost of approximately $7 million dollars additional but gives a decrease in rate for the immediate levy years. A resolution by board of Education is required each year to abate the Education Levy increase.

This option moves debt out one year at a cost of $7 million dollars and gives some relief to taxpayers, but adds cost.

Option 3: Levy with 2011 refunding, 2012 refunding and abatement, and no CPI-U. Increase over prior year (5.31) = .35 per $100 EAV. Average increase per home with a market value of $288,000 =  $336.

November 2011 refunding completed at a savings of $742,000. January 2011 refunding will complete the 2004A refunding at a projected combined total savings of $1.033 million. November 2012 refunding and abatement moves debt out one additional year at a cost of approximately $7 million additional but gives a decrease in rate for the immediate levy years. No CPI-U levied means a permanent loss of levy extension.

This option, with no CPI-U, impacts all future levies.

Option 4: Levy with 2011 refunding, 2012 refunding and abatement, Education Levy Increase Abatement, $10 million fund balance abatement, and full CPI-U. Increase over prior year (5.31) = .32 per $100 EAV. Average increase per home with a market value of $288,000 = $307.

Resolution by Board of Education each year to abate the Education Levy increase. Resolution to abate $10 million in fund balance reserve from the Education Fund. This would mean an approximate $20 million reduction in the Education Fund over the next six years. It would reduce the fund balance limit in policy below 30 percent (17 percent). The bond rating would be lowered.

Regardless of which option the board chooses, property taxes will go up because the district has a mortgage that must be paid. Oberg reported that for the 2011-12 school year, the district has received no funding from the state other than General State Aid.

Kelly Nowak and Bill Wilson, board member liaisons to the Superintendent’s Financial Task Force, recommended going for the full CPI-U in order to get all the funding the district is entitled to each year and then determine the best options as future economy is known. They noted that the board is aware of its debt and would welcome feedback and questions from community members.

The consensus of the board is that prudent planning would be to pay down debt but not add costs at the end.

Community members are encouraged to get their feedback and questions to the board over the next few weeks so the board can review it and run numbers if necessary. If the School District were to abate, it will need to tap reserves and determine how to keep a healthy balance.

The Financial Task Force will bring recommendations back to the board for consideration.

Levy, budget and other financial information can be found on the district’s website, www.geneva304.org, under the District 304 Finances link or the Board of Education link.

The next regular meeting of the Board of Education is 7 p.m. Monday, Nov. 28, at , 1113 Peyton St., Lincoln Avenue entrance.

Les Dixon November 18, 2011 at 08:20 PM
It may be time to look for another community in which to live. Find one that doesn't have a projected principal and interest obligation of $350 million! Make some cuts for a change!
Jim J November 18, 2011 at 09:09 PM
Amen. Paul brought up a thought that arises from time to time. Why can't neighboring communities split the cost of administration of their schools? I'm sure the guys with FACTS probably know what we pay for the administration of our schools. It's probably nearly the same for Batavia, Kaneland and for St. Charles. I can't imagine there wouldn't be some substantial savings to combine certain of the administrative functions. It's kind of like when we built an entire new middle school right next door to the existing one, and then staffed each one separately. Obviously I'm not talking about teachers; but surely the rest of the administration might have been able to be combined. Think about it. Maybe I'm just naive about what all those people do, but I bet there is a fair amount of governmental bloat from which economies of scale savings could be had if they were combined. Jim James
Bob McQuillan November 18, 2011 at 11:40 PM
Jim: I think there are over 800 School Districts in the state of Illinois some are community districts (k-12), some are elementary only and some are high school only. Certainly some could be consolidated but I have never researched the topic. One thing that is certain is that every district would fight tooth and nail to stay solo and it wouldn't "be for the kids." Look at the stance the Regional Superintendents & their Assistants took when their funding was cut effective July 1 of this year. They refused to leave their offices and "work without pay." The state, just a couple of weeks ago, caved in and took money from the cities to fund their jobs. I'm sure they will get their pay back to July 1. Their were @80 people involved in that situation. They have funding til June 30, 2012. Wanta bet their salaries will be picked up by the local school districts and paid by us in July? Every Geneva administrator makes well over $100,000 per year. The districts do their own classification of who and who aren't considered administrators. There is no standardization of administrators from district to district. One positive is that the Geneva Administrators have frozen their salary for the last two years though the Superintendent did get an extra week of vacation.
Bob McQuillan November 18, 2011 at 11:44 PM
Do you realize that most Superintendents receive a car or car allowance as part of their contract? The taxpayers also pay for all gas and detailing of the vehicle. In the case of Geneva, a mini-van was leased but I believe the Superintendent has recently asked for a car allowance. Not sure if that was done or not. Legally I'm not sure if a superintendent qualifies for a paid vehicle under IRS guidelines. Mileage to and from the office is considered personal and should be paid back to the employer. The only mileage covered would be travel on school related business which I am sure isn't very much. But once one superintendent gets a car, they all get a car because we have to be competitive you know. Another fun fact is that the search firms hired to find a new superintendent are all ex-superintendents themselves. The good old boys take care of the future good old boys!
Ed Nendick November 22, 2011 at 02:15 AM
HERE'S AN ALTERNATIVE TO CUT OVER 1 BILLION DOLLARS FROM THE STATE OF IL Budget today. The State of Texas has 25 million people. They have 600 school districts. They have ratings similiar to ours. The State of PA. has 12 million people. They have less than 600 school districts. They are rated in the top 10% of educational systems in the country. The State of IL has 983 school districits. 100 with one school only. Each one has a budget ove 1million dollars. Lets get rid of the Administrators who constantly demand more money!


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