An incomplete historical snapshot of bond issues, tax levies and referenda

After attending and chewing on the Community Dialog about various school options (which all lead to big tax referendums), I got to dwelling on the the Elementary School options. Partially, as I said before, I was surprised to see them in the packet on Tuesday in the first place. So let me state right off the bat, I am fully aware and acknowledge that our school buildings, at all levels, need a bit of help. We have known this for over two decades. The sad part is that we have not come up with a good plan to deal with these issues, which has resulted in a snowballing problem, an escalating urgency that eventually borders on a crisis.

First some definitions and attempts to bridge the financial jargon.

  • Bonds (Sales Tax Bonds, Working Cash Bonds, etc): Basically, these are long-term loans, like mortgages.  The district gets a bunch of money from a bank to do stuff, and the district slowly pays back the loan (including interest) over 20 years (typically). To “issue” a bond is therefore to put oneself in debt to another.1
  • Tax Levies: This one is a bit harder for me to wrap my head around, but here goes. We pay property taxes, right? Various groups get a slice of the pie from those property taxes, and public education usually gets the biggest slice.2 The tax levy by the Board of Education therefore determines exactly how big that slice will be. 3 5 7 Gene Logas often bragged that Unit 4 has one of the lowest rates going.4 At the same time, Gene complained that “tax caps hurt”. 6
  • Referenda: The law states that when the school district wishes to acquire more money above and beyond what tax levies can bring in, the school district can ask the voters to approve more money via vote during an election in the form of a referendum. Obviously, this does not happen often because taxpayers typically do not want to pay more taxes. The Working Cash Bond is special because it slips under a certain ceiling that allows the district to raise property taxes without a voter approval.

(NOTE: Both Gene and Greg were amazing warehouses of information, but even more impressive was their willingness to sit down and explain things to folks like me)

Elementary School funding (and lack thereof)

While there is a rich plethora of statistics, financial data and worthy history, I am going to just rewind the clock to 1998 and focus on the elementary schools and related funding projects.

Gene Logas tells that a $26 million tax referendum was put the public in 1998 and passed 4 8; the money was used to build Stratton and Barkstall. I am still very confused why Barkstall was built so far south when the Consent Decree was just beginning to be formulated, and John Lee Johnson was in talks with the federal Office of Civil Rights (OCR) about suing the district. Keep in mind that even though the elementary schools were already starting to show their age, nothing was done to fix them up in any way. As far as I can tell, nobody even made plans to fix them up.

In 2002, we learn that we need $200 million just to bring the older buildings up to date 8. 200 frickin million – hows that for not taking care of the things you own? Sometime after 2002 Unit 4 put some effort into a “Long-term Strategic Plan” (which I never downloaded and is now not available on the Unit 4 website).

In 2006, the school attempted to pass a $60+ million bond, which included $10 million for a Savoy school (yes, 2006). The referendum was defeated (source: private email).

In 2008, in an effort to address these escalating problems, the district partnered with several area agencies and a professional moderator to host a series of community discussions, grouped under the label of “Great Schools, Together”. The grand manifesto of this collaboration was a 10-year Capital Improvement Plan (CIP) 9. Note that the CIP did not aim to address all the aging schools. And in fact, aside from ignoring Dr. Howard and South Side, it called for building a new Savoy school. Also note that at this time, the infamous 1% Sales tax made its first appearance and was narrowly defeated 12, and the board increased the tax levy by 10% 10. It is germane to further note that Imani Bazzell was wrapping up a year-long collaboration with elements of the community, area churches and the University of Illinois to place an amazing “Great Campus” at the current Columbia (aka, Family Information Center) site.

Then in 2009, somehow the 1% Sales Tax passed 13 and the board again increased the tax levy by 6.75% 11.

For the past few years as sale tax money has started to roll in, the District made good on its stated intention of paying off old loans and using the money to renovate Garden Hills and BTW, build a Savoy school and is now in the process of upgrading/fixing other schools like Westview and Robeson.

In March 2012, the board started going down the path of utilizing a working cash bond, a non-trivial legal nuance that seems to be intended for emergencies. The first $10 million was used to quickly upgrade the middle schools (lights and A/C). The second phase ($4.9 million) was just recently approved at the last board meeting; this will be used for networking infrastructure and a new Transportation facility 14.

So since 1998 (and beyond), we haven’t really had a good plan to deal with old elementary school buildings like Dr. Howard. We have, however, built three brand new buildings, renovated three others and are in the process of renovating a couple more. We also had a $26 million bond, multiple tax levies, a 1% Sales Tax and almost $15 million in new property taxes via the Working Cash Bond (granted, we have had several tax abatements, or reductions, as well, but I don’t have those numbers at the moment). But still, nothing said about Dr. Howard or South Side. Until Tuesday. And then BOOM! We are asked to consider several multi-million tax packages that seek to finally address these older elementary buildings.

References

1 What does it mean to issue a bond?

2 What is a property tax levy?

3 Email from Gene Logas explaining the tax levy

4 Email from Gene Logas explaining tax rates and tax levy

5 Email from Greg Novak explaining the tax levy (humor)

6 Tax Caps Hurt (spreadsheet by Gene Logas showing how the caps on tax hurts have limited how much money the school district receives

7 Greg Novak explains taxes on Halfway Interesting

8 brief history given during meeting with Don Kermath, Gene Logas and Dr. Wiegand (blog entry)

9 10-Year Capital Improvement Plan

10 School Board increases tax levy by 10% (2008)

11 School Board increases tax levy by 6.75% (2009)

12 1% Sales Tax defeated in 2008

13 1% Sales Tax approved in 2009

14 2nd phase of Working Cash Bonds approved

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One Response to “An incomplete historical snapshot of bond issues, tax levies and referenda”

  1. charlesdschultz Says:

    Brian Dollinar does a great job giving an overview as well – a good read:
    http://publici.ucimc.org/?p=1010


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