Oak Park School District 97 is strongly considering scaling back its $75 million working cash bond sale referendum — approved last Tuesday by the school board — or switching to a limited tax-rate referendum.
In either case, the board will still ask voters on April 5 to accept a tax increase, but one that’s likely smaller than what the district originally envisioned prior to the state raising income and corporate tax rates last week.
The state legislature agreed to raise personal income tax rates from 3 to 5 percent; corporate tax rates will jump from 4.8 percent to 7. That move also took away one of the arguments given by the district for choosing the bond route — uncertainty of the state meeting its financial obligations to school districts.
The bond sale option was also designed as a “bridge” to 2018. The board would then seek a permanent limiting rate referendum at that time.
With state taxes now raised, Dist. 97 will likely receive state aid that it was already due and future payments on time.
The board and district administration met for about two hours in a special meeting on Sunday to reconsider its options. The board on Jan. 11 approved its bond sale ballot question with the understanding that they have until Tuesday Jan. 18 to finalize the wording. Last Tuesday’s vote occurred as the Illinois General Assembly deliberated on raising income and corporate taxes.
The state’s recent move, Dist. 97 board members said, caused them to rethink their options. A referendum and spending reductions are still needed, members said. The board on Sunday went through various scenarios concerning both a bond sale and limiting rate increase.
The district could change to a $66 million bond sale referendum, under one scenario —an increase of about $54 for every $1,000 paid in property taxes — versus a $61 increase to sell $75 million in bonds.
The board also discussed the pros and cons of a limiting rate increase. An argument in favor of the limiting rate increase is that it would be even less of a hit to Oak Park homeowners — as low as $40 for every $1,000 in property taxes under one scenario.
But it would also be a permanent tax increase for property owners compared to selling bonds, which would come off tax bills in 2018 once they’re paid off. With a limiting rate increase, the district would receive the money this year, versus receiving the money in 2012 under the bond sale option.
“We can dramatically reduce the dollar amount that the taxpayer is paying on an average basis looking over the course of the entire impact of a referendum,” said board President Peter Traczyk, listing one of the pros for a limiting rate hike.
But the state tax increase might make voters wary of having to pay more come April, he said. Traczyk insisted the board was doing its due diligence in trying to make the referendum as small as possible for homeowners.