D200 preliminary budget shows decline in property tax revenue

Property tax revenues declined this year at Oak Park and River Forest High School, partly the result of the school board’s decision to reduce property taxes and partly the result of other factors in Cook County’s tax collection processes.

The drop is about $14 million according to the school’s preliminary budget figures for next year. The high school announced its preliminary budget for fiscal year 2015 last month. 

Overall, the district’s budget for next year totals roughly $111 million. Expenditures in the proposed budget are also lower – 3 percent or $2.6 million. Property tax revenue is estimated to decrease by $14.5 million — a 23-percent decline — says Tod Altenburg, OPRF’s chief financial officer. 

The high school collected about $63 million the previous year and estimates this year’s tax revenue to come in at roughly $48 million. Last December, at the urging of its Finance Advisory Commission (FAC), the school board cut taxes by $10 million as one step to respond to the school’s large cash reserves. The total decline, however, is due to multiple factors, Alternburg noted, including how the county collects and distributes tax revenue to municipalities. 

“First of all, in Illinois, many county tax levies overlap into two fiscal years. Second of all, Cook County utilizes an unequal tax billing system that can provide unusual year-over-year fluctuations,” Altenburg said. 

Next year’s fund balance is also slightly lower than the $118 million figure following FY14. It’s the first decline in the school’s fund balance in recent years. The decrease is also in line with recommendations by the district’s ad hoc FAC, which was commissioned last year to study how to bring down the fund balance over the next five years. 

The district’s recent budget figures will be vetted through the FAC’s financial models, says Tom Cofsky, a D200 board and FAC committee member. The D200 board discussed the preliminary budget at its June 26, regular meeting. Revenues for next year are estimated at roughly $62 million and expenditures at about $77 million. The majority of spending is in direct educational costs — roughly $58 million — which is historically the case.  

Property taxes make up the bulk of the school’s revenues, a total of $48,622,157, or 79 percent. Nearly $4 million is coming from the state and about $2 million from the federal government. Roughly $7 million is from local tax increment financing (TIF) funds. These three funding sources were virtually unchanged from the previous fiscal year.  

 The decline in tax revenue, however, is not as bad as it first looks, noted D200 board member Jeff Weissglass, who also chaired the FAC.

“If you look at this from a calendar year-to-calendar year, we are receiving the amount of money we expected. If you look at it from a fiscal year-to-fiscal year, it looks funny,” Weissglass said. 

The FY15 tentative budget will be put on public display for 30 days, as required by law, on Aug. 19. A public hearing and adoption of the final budget is scheduled for Sept. 23.