Recapturing $2.1 million in taxes in 2025-27 was the main cog of a tax levy scenario the Oak Park and River Forest High School District 200 board of education considered at its Oct. 23 meeting.
The scenario, which would maintain a fund balance at 33% of district operating expenditures over the next four years, is one of four the board considered last week. It will approve a 2025 tentative tax levy at a special board meeting Nov. 6, with a Truth in Taxation public hearing on the proposed levy Dec. 4. Final adoption of the levy would be made that evening.
In May 2022, a new section of the state Property Tax Code gave school districts authority to approve a tax levy that is less than the maximum allowable by law and create the possibility of recapturing the difference on a future levy within three years.
The scenario, termed Scenario 4, was presented by district finance director Brian Imhoff and Tony Arbogast, assistant superintendent for business services. Scenario 4 would recapture the $2.1 million in three equal installments of $700,000 from 2025-27 tax levy years. It assumes the recapture is taken regardless of the percentage increase in the Consumer Price Index for Urban Consumers (CPI), which would result in a levy increase of 3.8% in 2025, and an estimated increase of 2.8% in 2026 and 2027.
In recent years, OPRF officials had used its decisions to not tax to the maximum level as a talking point reflecting what they considered to be a respectful treatment of taxpayers.
“The reason our district did not levy higher in those previous years was the fund balance was above the target range, above 50%, the high range of where we want to be,” Imhoff said Monday. “Even as recently as June, we were running around 75%.”
Imhoff said that while a district can always choose to levy less taxes, before the 2022 Property Tax Code change, “there was no way to recapture tax money from a lesser levy year. (This scenario) captures those dollars.”
The key number in Scenario 4 is 33%, which isn’t a magic number per se, Imhoff said, but an ideal place for the fund balance to rest just in case Cook County delays property tax payouts in 2026.
“When we look at our spending trajectory, it takes us about four months to spend 33% of our budget for the year,” Imhoff said. “As long as the county doesn’t delay taxes beyond October, that will cover us.”
The other three scenarios presented Thursday included:
Scenario 1, which presents a levy that increases the CPI factor by 2.9% in 2025 and 2% in future years, with no recapture.
Scenario 2, which would recapture the $2.1 million by imposing a maximum levy increase of 5% in 2025, followed by a 2.6% increase in 2026 and a 2% increase in 2027.
Scenario 3, which would recapture the $2.1 million with a 3.5% tax levy increase for the next three years unless that $2.1 million amount has been exhausted earlier.
Board member Graham Brisben asked Arbogast Thursday what the fundamental differences between Scenarios 3 and 4 are.
“To me, Scenario 4 smooths in the recapture on a dollar basis and not a percentage basis,” Arbogast said. “One, it doesn’t put that risk of a high CPI forcing us to not go to a recapture.”
Board member Kathleen Odell said the recapture opportunity in Scenario 4 serves an important purpose.
“If there are material changes, if the situation today is unexpectedly and unavoidably different from the way we thought it might be when the previous decision was made, that’s kind of exactly the reason for the recapture opportunity,” she said.
She said the district’s special education costs have gone up “really even more than what we’re talking about recapturing on an annual basis, and the other thing is the unpredictability with the county, meaning we want to aim for that higher 33% level.”
But she agreed with other board members that “we have to be judicious with that recapture opportunity.”
Board member Fred Arkin wondered aloud what would have happened if the state Property Tax Code hadn’t changed in 2022.
“What would the actions we’d be taking as a board if we couldn’t go back and recapture, and I don’t think we’ve dug deep enough into maybe some of our expense reductions,” he said.
“I think it’s something we told our taxpayers we’re not going to tax this amount, and then all of a sudden, oops, something changes, now we’re going to go back and tax you again.
“It just doesn’t sit well with me, and I understand it may be a necessity.”
Would Scenario 4’s tax recapture approach been necessary if District 200’s currently-in-progress building Project 2 had gone to a referendum in 2023, instead of the issuance of debt certificates?
“It depends on the amount of the referendum,” Imhoff said. “At the time, we were looking at Project 2 financing, there were multiple scenarios, and one of them was do we go to referendum for the full project? Do we go to referendum and only ask for 50% and fund (the rest) through fund balance or debt certificates?”
He said that if the district had gone to referendum and asked for the full amount, in excess of $40 million, “then our fund balance would still be above the target range. But then why are you going to referendum for the full amount when you have a 75% to 80% fund balance?”