Why does Oak Park and River Forest High School have so much money in the bank? Taxpayers deserve a clear answer to this important question of public policy.
Unfortunately, the issue has been confused by inaccurate quotes that have been attributed to me on websites and in public presentations. Paraphrased, these inflammatory comments indicate that “ElSaffar believes the unethical school board misled referendum voters to get extra money!”
My position has been misconstrued. I opposed a large, unexpected tax increase that was approved in the aftermath of the high school’s 2002 referendum. But I do not believe the school board misled voters or acted unethically.
The disagreements over the high school’s tax levies are partially due to a poorly-designed referendum law. In 2005, the school board realized that this law gave it the right to increase tax levies by far more than was expected in 2002, and claimed part of the extra money. The result was a large tax increase, a large fund balance, and an enduring controversy.
Background: In 2002, the high school sponsored a referendum in hopes of obtaining an additional $6.5 million for its education fund. Instead of simply asking for a $6.5 million tax increase, however, state law required the school to ask voters to approve an increase in the property tax rate. The high school, in good faith, estimated that a tax rate of 2.95% would generate an additional $6.5 million.
After voters approved the referendum, Oak Park and River Forest property values were reassessed. Property tax rates can fluctuate dramatically under Illinois’ property tax system, and this happened after the reassessment. Prior to reassessment, a 2.95% tax rate generated $6.5 million in additional taxes. After reassessment, however, that same 2.95% rate generated much more revenue.
Controversy: The reassessment-related change in tax rates led to a controversy in 2005 that no one had considered during the 2002 referendum campaign: What did voters approve? Did they approve a $6.5 million tax increase? Or a 2.95% tax rate?
I spoke at a school board meeting in 2005, and respectfully contended that the school should only levy $6.5 million more per year. But a 2.95% tax rate allowed the board to increase its levy by more, and the board argued that it needed the extra money to help close the achievement gap and ensure adequate education funding for years into the future. Accordingly, the school increased its tax levies by millions more than the $6.5 million originally contemplated by the referendum. The cumulative effect of the board’s 2005 decision is that revenue resulting from the referendum is now a little more than double the amount expected in 2002.
State Law Problem: As a result of a referendum law that focuses on tax rates, Oak Park and River Forest High School got an unexpected windfall. But not all taxing districts have seen such results. In 2012, taxing districts in Northfield and Palos Park convinced their communities to support tax referendums. However, because of unexpected shifts in tax rates in their communities, these districts received substantially less money from their referendums than they expected.
The law should be reformed so that taxpayers and taxing districts know exactly how much tax money is at stake before a referendum is passed. Had such a reform been in effect in 2002, the high school would have asked for a tax increase of $6.5 million instead of a tax rate of 2.95%, and the controversy over the high school’s large fund balance would never have arisen.
Conclusion: State Senator Don Harmon and I have agreed to work together in this year’s legislative session to change the law so that everyone knows the cost of future referendums. If we can enact this reform, other Illinois cities should be able to avoid the problems and controversies that Oak Park and other communities have experienced under the current law.
Ali ElSaffar is the Oak Park Township Assessor.