Michelle Gervais said that she canvassed door to door during past District 97 referendum campaigns and has never voted against a tax hike for the schools in her 17 years of living in south Oak Park.
“I’ve never once complained about paying taxes,” she said during a Dec. 10 public hearing on the district’s 2019 tax levy. “But I really feel if you take the full levy amount here, you’ll cause some real resentment among voters and I think I’ll be a little resentful, too, and I’m one of your biggest fans.”
Gervais was one of nearly a dozen Oak Park residents who urged board members not to take the full $5.3 million in revenue the school district stands to gain with the expiration of the Madison Street and Downtown TIF districts — a move she and others argued would only exacerbate the chronic problem of ever-increasing property taxes in the village.
Elected officials, however, argue that this is the only opportunity to capture that revenue and further stabilize the school district’s financial future.
Moments after the public comment, the board voted 5-2 to take the full amount in approving the district’s final levy for 2019. School board members Jung Kim and Cheree Moore voted no. Kim said she’d rather the district only take $3 million in revenue from the expiring TIF districts.
The decision was perhaps the most significant test to date for a young school board that includes six members who are in their first terms and will likely be seen as a reference point in the community-wide debate about how local taxing bodies should levy taxes and budget in a fiscal environment where homeowners are growing increasingly hostile to rising property taxes.
In a statement the school board released on Dec. 15, board members explained that their decision to approve the final levy “was based on the extensive research and long-term planning done with the assistance of the district’s administration, financial consultant and our Finance Oversight and Review Committee.”
The district’s total levy for 2019 is about $79.8 million, with approximately $4.1 million coming from additional tax revenue generated from the expiring Downtown TIF, $1.2 million coming from the expiring Madison Street TIF and another $376,000 coming from new taxable property in the district, officials said.
The resulting tax levy represents a 9.7 percent increase over last year’s tax levy. School district officials pointed out, however, that District 97 residents won’t see their total property tax bills going up by that amount.
“Taxpayers outside of the TIF and new property will only see an average increase of 1.9 percent on their taxes due to District 97,” the district explained in an FAQ.
That 1.9 percent figure represents the rate of the Consumer Price Index, which state law uses to cap property tax increases for non-home rule units of government, like school districts.
Non-home rule government agencies can extend their tax levies annually by 5 percent or the CPI, whichever is less. They can also seek to capture the full value of the property where there’s been new construction or the values of properties that previously were sequestered in a TIF district.
The 1.9 percent figure translates to about $90 for D97’s share of the tax bill for a home valued at $400,000.
District officials explained in the FAQ that over the last five years, D97 has relied on an average of about $3 million in TIF surplus dollars to help fund its operations. With the two TIF districts gone, that revenue source will disappear, they stated.
“The capturing of the tax dollars from the TIF will replace those lost revenues,” the FAQ states.
The board explained that capturing the $5.3 million in TIF revenue would allow the district to fund major capital expenses without issuing debt and incurring interest costs.
“Without capturing the tax dollars from the expiring TIF districts, a large portion of these expenses would have to be paid with additional bond issuances [that] could cost the community approximately $15.8 million in interest expenses over the life of borrowing.”
The board stated that capturing that new revenue would also allow the district to maintain an overall fund balance between 25 percent and 50 percent of operating cash flows, which “translates to about three to six months of expenditures.”
The board added that the additional revenue would cushion the district against adverse impacts from state legislation that could be in the works, such as a property tax freeze or legislation that would make local districts responsible for a greater share of teacher pensions.
During public comments on Dec. 10, however, most of the people who spoke against the board taking all of the TIF money weren’t sold by the district’s explanations, arguing that the projected cost savings aren’t worth permanently increasing the tax base by $5.3 million.
They added that the district could also raise the money by referendum — something they felt the district was wrongly trying to avoid.
“It’s not right to want to avoid referendum,” said Peter Prokopowicz.
“You can capture new tax revenues anytime voters pass a referendum,” said Kitty Conklin, who created an online petition for residents to sign requesting tax relief from Oak Park taxing bodies. She said roughly 1,400 people had signed onto it.
Ken Kirsch, a 21-year resident of Oak Park, said that the district should focus more on cutting costs rather than increasing revenues.
“My corporate experience was combine, combine, combine and save expenses, because you can’t always increase your revenues,” he said.
Some board members pushed back against some of the statements offered in public comment.
“We’ve been trying to find efficiencies, and have found efficiencies, for a number of years,” said board member Rob Breymaier.
Moore said that school board members would feel the same impact as everyone else, and that it was a decision that was in the best interest of the school district.
“A lot of people talk about we’re not experienced or we don’t feel the impact,” Moore said. “We live in Oak Park. We feel the impact. We’re all in this together. We’re not from some mountaintop making these decisions.”
To access the district’s FAQ, visit bit.ly/2PTs2NI. To see video of the Dec. 10 levy presentation on the levy by the D97’s financial consultant, Robert Grossi, visit youtu.be/3dXo4f6oWlA.
The Oak Park and River Forest High School District 200 school board is expected to host a public hearing and adopt its final tax levy on Dec. 19.