How 30 cents turns into 45 cents

By Catherine Edman Daily Herald Staff Writer
Posted 8/17/2004

The ballot question will ask voters in Glenbard High School District 87 to give themselves a $300-a-year tax increase, on the average.

But because of a quirk in the way the tax cap law is written, the actual increase voters can expect will be at least $100 higher.

It's possible, and common, because the law doesn't require agencies to necessarily use money in the way voters approved, said Paul Hinds, DuPage County deputy clerk.

District 87 plans to ask taxpayers to approve an increase of 30 cents per $100 of assessed valuation in its main education fund, but officials say they plan to use nearly half the new tax money to boost reserves and pay for building upgrades. That means putting some of those new tax dollars in other funds, subsequently boosting tax rates there.

The end result: After two years, the district's overall tax rate will actually have increased by 45 cents. The education fund rate will increase by 30 cents, the tax rate in working cash will go up 5 cents and another 10 cents will be added for the operations and maintenance fund.

So why not just ask for 45 cents?

Because the district doesn't need 45 cents in its education fund, said David Brown, District 87 board president. It needs more money for reserves and building maintenance. Officials don't want to present voters with three separate questions.

It's admittedly not simple to understand, but Brown said the district is being very clear in explaining to people that the end result will be a 45-cent increase, not the 30-cent increase they'll see on the ballot.

What District 87 is doing - increasing its overall rate this way - is "surprisingly common" among school districts and other agencies, Hinds said. An admitted loophole in the law allows taxing bodies to do it, he said.

"Is that the intent of the law, probably not," Hinds admits.

But it exists and is used.

What's unusual with District 87, he said, is officials are being forthcoming in publicly explaining the less-than-obvious costs of their Nov. 2 tax-increase referendum.

What their request could mean to voters is that in the first year, the owner of a $300,000 home could see a school tax increase of $285. The second year, when the rate would increase to its full 45 cents, taxes on that house would increase another $142.50, to a total of $427.50.

If approved, the tax increase is projected to give the district $20.5 million each year.

District 87 board members voted last week to put the referendum on Nov. 2 ballot, saying the money is needed to eliminate the district's deficit, take care of $85 million in building upgrades in the next 10 years, add 60 teachers, upgrade computers and reduce class sizes across the district.

Though the board cut $8.6 million from the budget in recent years, the district still expects to see a $5.5 million annual deficit at the end of this school year.

When officials looked at requesting a tax hike to counteract the deficit, they pondered three questions: one for the education fund, another for working cash and a third for operations and maintenance funds, said Gary Frisch, District 87 assistant superintendet for business. They discarded that option.

"We believe three questions is confusing," he said.