Something For Nothing? - Read Comments as well

The following item is contributed by an unhappy tax payer concerned about the current direction of School District 46. They raise a number of significant issues that we feel are worth dialog. If we refuse to challenge the current system we become victim to unreasonable taxation without representation. Stand up and be heard!!

School District 46 is promoting a bond referendum to finance the construction of a new school building. They want you to think this referendum will cost you nothing. Something for nothing? Think again!

School District 46 has a history of misleading taxpayers. In 2002 District 46 put a referendum on the ballot requesting an increase in the tax rate of $0.50 per $1,000 of a home’s assessed value. They said the tax rate increase of $0.50 would take the district out of debt and would cover the district’s revenue needs for the next ten years. The District based $0.50 request upon the existing tax cap laws, the District’s expected growth in revenues, and its plan to keep expenditures increases under 5% per year. The plan made sense. Keeping increases in expenses at 5% corresponded to the revenue the district could expect under the tax laws. They told the public that if an owner of $200,000 home would pay an additional $100 per year in taxes, the district’s financial condition would be resolved.

The community approved the referendum. But when the District went to file with the county, the county clerk implemented the referendum without regard to the tax cap. This meant the district could move the tax rate beyond the $0.50 per $1,000. The district exploited the opportunity and went well beyond what the voters approved, causing the tax rate to increase $0.85 per $1,000, not the $0.50 advertised. The owner of a $200,000 home now pays an additional $170 per year, a whopping 70% more than what the voters approved! And there is one more increase to come in this year’s taxes thanks to their 2005-2006 budget and levy.


“Since 2000, taxpayers in District 46 have been gouged.”
-Northwest Herald 11/18/2005

Since the 2002 referendum, the district continues to ignore what the voters approved and continues to levy the maximum $0.85 per $1,000. Each year District 46 has a choice: to do the right thing and keep spending so they levy only enough to be at the $0.50 per $1,000 increase, or “tax to the max.” When faced with the same situation, our neighboring school board in Huntley made a different choice. Huntley chose to respect what the voters understood they approved and set their spending and tax levy to the amount the voters approved. Huntley’s school board did this “to keep their credibility with the community.”

Tax and Spend—It has to End!
District 46 also has not kept its word in fulfilling their 2002 adopted resolution of keeping increases in expenses at 5%. From 2002-2004 the cost per student has increased 30% while the number of students during that time dropped by 40 children. The school tax rate per $100 of property valuation increased 25% during that time and the school’s spending resulted in a 30% increase in per-student operating cost. District 46 collected $4,982,298 in 2000 and $9,099,896 in 2004—an 82% increase in tax dollars collected from our community. Where did the money go?

The district increased administration payroll (adding an assistant principal in the elementary school and an assistant superintendent position). I’m glad we expanded our administration so much to handle the 40 fewer children over the 2002-2004 period. (they did not to mention adding administrators when they asked us for more money during the 2002 referendum.) But most of the money went into salary increases for both administrators and teachers. From 2001-2005 salary increases are 42% for teachers and administrators. From 2004-2005 teachers and administrators had salary increases ranging from 5% to 51%. WOW! Cost of living was less than 3% during the same year! A salary chart is in another document on this site detailing the increases. (Take a look at the teacher/administrator salary database on the website www.thechampion.org to see exactly what everyone got.) And the new school building design already has an office for another assistant principal. We will have a superintendent, assistant superintendent, two principals, two assistant principals, huge salary increases for teachers and administrators…WHEN WILL IT STOP???

And if you hear the usual response “you have to pay for a good education” and “a good school increases your property value”, think about the fact since the last referendum District 46 has been placed on “Academic Watch” in 2004 by the state of Illinois and over the last three years state test scores in the school have declined. The school is a year behind other area schools in math for students moving on to high school. Sure glad they all got good raises!

Now District 46 is asking the community to believe them again. And they are misleading the community again. They tell you that this bond referendum will not cause a tax rate increase. Don’t confuse the fact that your tax rate won’t go up with the actual money you pay in taxes. Your taxes will most assuredly go up. District 46 is counting on the value of homes to go up a lot. When they tell you you’re the referendum is tax rate neutral, here is the math to use to figure out what it will cost you:

$0.24 x More A$$essed value of your home = Higher tax $$$ that we pay

Another misleading statement has to do with the land. In 2005, District 46 told the community the developer of Tall Grass “was donating” and “was giving” the land to the school (see the Shareholders Report for 2005). This development was a great deal for the school. Now when you look at the referendum language, the school is, in fact, buying the land at market value. They are buying the land from the developer, not by expending any cash but by crediting some of the developer’s impact fees. That is a far cry from “giving.”

The bond referendum only covers the construction of a school building, not the staffing and operation. They publish information on the tax neutral bond rate but don’t publish any detailed numbers on the increased operating costs. Probably because when you calculate 10-13% annual increases in costs-per-student coupled with the additional students, you run out of money real fast. When asked about money to cover the staffing and operation, they talk about transition fees (one time fees) and claim they cannot forecast past the next five years, avoiding the question. Funny…they can forecast the number of children over 10-15 years but not the expenses of operating the school. What this means is that we can expect a substantial increase in taxes in the near future because once the new school is built, they will need more money to run it. In a District that is taxing and spending like District 46, it won’t take long.

What should we do
It is true that our school will be overcapacity at some point in the future so we have to do something. Our community now pays the second highest school tax rate in McHenry County. If we are not careful, we’ll make it to the highest level. The solution has to be a fair to the school and we taxpayers who don’t have kids. First, we should not adopt a referendum this year. There is no pressing need. From 2002-2005 the number of students increased from 1048 to 1054. The expectations of overcapacity by 2008 are exaggerated. We should realize we have time to look at some options:

Wait a year or two to see District 46 will live up to its last referendum and set their tax levies such that they only tax the community the $0.50 increase that was approved. LET THEM LOWER OUR TAXES TO THE $0.50 INCREASE WE APPROVED BEFORE WE APPROVE ANYTHING ELSE!

Wait a year or two to see if District 46 can live up to its 2002 Adopted Resolution/Promise to keep spending increases at no more than 5% per year. If the District continues increasing spending per student at over 10% per year like the last three years, we will face another costly education referendum in a few years.

Wait a year or two until the District’s bonding power is in better shape and we have less reliance on premium bonds (a more expensive form of financing). Heavily mortgaging our future is a BAD idea.

Wait a year or two to see if the new impact fees and transition fees survive legal challenges. If the new village ordinances on impact fees and transition fees fall to a legal challenge, the taxpayers will be left holding the bag. There is still a legal challenge outstanding from Berian Builders over the existing impact fees so it is very possible there may be challenges to these new fees (and these fees are the key to the District’s financing). If we take on the debt and don’t have these levels of fees, the money to pay the debt comes from the taxpayers.

Wait a year or two to explore consolidation with Crystal Lake. Consolidation could help spread costs across residential, commercial, and industrial tax bases and it has worked well with the area high schools. As developers move in along Route 31, there will be an increase in children for both Crystal Lake and Prairie Grove schools. Merging with Crystal Lake makes sense for both districts. The State of Illinois has legislation that provides grants to facilitate school district mergers as they have recognized the heavy tax burden small school districts place on a community. But taking on a lot of debt now will make merging with our school less attractive to another district.

District 46 wants you to believe this referendum will cost you nothing because it is tax rate neutral. Tax Rate neutral is not tax neutral. Something for nothing? Think again!