Nineteen thousand Oak Park property taxpayers who collectively paid an extra and unexpected $2.6 million in taxes to Oak Park District 97’s will have to wait a little longer to get that money back.
Instead of issuing refund checks that would show up in taxpayers’ mailboxes within months, which was the school board’s initial preference, board members voted 6-0 during a July 18 regular meeting to use the extra funds to more quickly pay down the remaining $4.45 million in bonds the district issued to help fund the construction of its two middle school buildings in 2002. Board member Jim O’Connor was not at the July 18 meeting.
Prepaying that debt will result in lower tax bills in future years.
District 97 board President Holly Spurlock said that, after consulting with their lawyers, a range of experts and community members, district officials realized that they wouldn’t be able to issue refund checks.
“The administration worked to flesh out what the refund process would mean,” Spurlock said. “Through that due diligence, there was communication with the village [of Oak Park] and we learned that schools are net legally allowed to issue tax refunds to taxpayers.”
Spurlock said that mailing refund checks to taxpayers would cost the district an estimated $30,000, an amount board members said was on the “low end” and didn’t include legal fees. Board member Robert Spatz said that once the district realized that it had no legal authority to issue the refund checks directly, it soon became clear that there “would be no mechanism to provide relief [to taxpayers] before August 1,” when tax bills are due.
In a statement released on July 18, D97 Supt. Carol Kelley explained that the debt abatement “would reduce the payments made by taxpayers toward the outstanding debt” and that “it is a more equitable and efficient way to remedy according to legal counsel when compared to issuing individual checks to taxpayers.”
Last month, district officials first noticed that they would receive an extra $2.6 million in revenue on top of the $13.3 million they had anticipated the April referendum to generate before the election.
In a statement issued on June 29, district officials said that they learned about the unanticipated revenue on June 17. The extra money, district officials explained in the statement, is “due to an unexpected increase of 5 percent in the equalization factor that occurred after the Board of Education approved the district’s levy for 2016 and finalized the sizing of the April referenda.”
After learning of the increase, D97 officials scrambled to ensure that the additional money would be returned to taxpayers as soon as possible. The unanimous preference of the school board had been to issue refund checks to Oak Park taxpayers before the end of the year. Board members were attracted to this option because of its immediacy and the fact that it’s tangible.
“Board members expressed a desire to immediately get this money back to taxpayers as fast as possible for a refund,” Spurlock said at the time. “The fact that we get money back to people immediately, as close to when they’re making a payment as possible would be our desire.”
The tax abatement option would have the same impact on tax bills as directly issuing refund checks, district officials said.