It`s been a year since the state imposed a property tax cap in the collar counties, where voters` tempers have soared along with their tax bills.
But it is not a milestone that school officials in Du Page, Lake, McHenry, Kane and Will Counties are celebrating.
While the Property Tax Limitation Act, which took effect last Oct. 1, blunted the double-digit rise in property taxes, educators say the tax cap has seriously shaken an already rocky financial foundation for the schools.
Besides taking away the schools` autonomy to levy what they consider a necessary amount to thrive, the cap forces them to relinquish hundreds of thousands of dollars in local revenue.
Schools are reacting to the pinch in a number of ways. Joliet Township High School District 204, for example, is laying off more than 50 teachers;
Elgin Unit District 46 is eliminating its dropout prevention program; and Glenbard High School District 87 is experiencing its first budget deficit in recent memory.
Under the tax cap, most units of government are permitted to increase their tax collections from year to year by no more than 5 percent or the rate of inflation, whichever is less.
To increase taxes more, taxing bodies must receive voters` approval by referendum. Passing those referendum proposals has been difficult of late, however.
Home-rule communities are exempt.
Faced also with shrinking state aid, many suburban schools that previously had lots of money for new teachers and educational amenities say they now have no choice but to cut staff, drop programs, boost class sizes, charge new fees and log deficits.
”Prior to the cap, we were adding staff; we hired 46 teachers over a 4-year period,” said Joseph Hentges, superintendent of McHenry County`s Woodstock Unit District 200.
”Now we`re cutting 20 to 25 teaching positions. The cap is killing us,” he said.
In Will County`s Joliet Township High School District 204, officials say the tax cap worsened an already critical fiscal situation.
School officials were growing accustomed to carrying heavy deficits from year to year. But this year, the district was forced to cut $3.5 million from its budget by laying off 55 teachers and cutting about 50 classes, including home economics, business education and art.
Joliet schools ”are in tough shape any way you look at it,” said Howard Beach, the district`s assistant superintendent.
And in Du Page County`s Glenbard High School District 87, board members last week approved a budget with a $1.4 million deficit, the first red-ink spending plan in years. The district is also forecasting a $20.8 million shortage by 1997 if educational programs continue at current levels.
”It is not a rosy picture,” said school board member Susan Barr.
Supporters of the cap say they are sympathetic to the school officials`
complaints. But they maintain that the cap is necessary to force the schools, by far the largest taxing bodies, to live within their means. And, they say, it is a good tool to relieve overburdened property owners.
”There have been big problems over the years with municipalities asking for more money with no restraint and property taxes going unbridled without controls,” said state Rep. Lee A. Daniels (R-Elmhurst), House minority leader and sponsor of the legislation.
”What we are doing is placing a reasonable limit on what (taxing bodies) can increase each year without voter approval,” he said. ”If you were to guarantee a business a 5 percent raise every year regardless of how they perform, I believe they would jump at the opportunity.”
The cap was designed to address a backlash from suburban taxpayers, who complained that their salaries could no longer keep up with the double-digit hikes every year in their real estate bills.
It was originally proposed as a statewide cap. But Downstate legislators argued that assessments in their communities were not skyrocketing and in some cases were actually dropping. Cook County Democrats, with a variety of political maneuvers, managed to keep the cap out of their territory.
As a community`s population and wealth grow, the districts reap a windfall. The state`s revenue formula, a complex system of fractions and percentages, was intended to allow districts to reduce the tax bills with the additional money.
But in the collar counties, property owners were paying more each year because the districts were attempting to capitalize on the higher assessments by pushing up their budget requests, according to county officials.
”For the most part, the taxing bodies took advantage of the increased assessments and would not levy less, therefore the taxpayers had to pay more,” said William Hall, chief deputy treasurer in Lake County, where taxes rose nearly 15 percent every year before the cap. Under the cap, collar-county tax increases have been in the 6 to 8 percent range.
”They felt like, `We`ve got this extra available money so we can add programs and we can give our employees raises; not 5 or 6 percent raises but 7 to 9 percent raises,` ” he said. ”Now they`re going to have to work with what they have.”
Next year`s tax cap will limit taxing bodies to increases of 3.1 percent, last year`s inflation rate.
Since 1992-93 is the first full school year under the cap, educators say it is too early to tell what the total impact of the law will be. Even legislators are unable to predict what will happen with it, as Democrats threaten to repeal it while Republicans say they will try to extend it to Cook County.
But some collar-county taxpayers already have noticed a significant reduction in the increase in their real estate tax bills.
Property owners in Du Page County, where taxes over the last five years rose the fastest, paid an average of 11 percent more in 1990 and 1989, 15 percent more in 1988 and 20 percent more in 1987, officials say.
”Now with the tax cap, the county`s average tax bill in 1991 went up 6 to 8 percent,” said County Clerk Gary King, adding that the average exceeds 5 percent because nearly half of the county`s 288 taxing districts are home rule and therefore exempt from the cap.
”The cap is forcing school districts to look at themselves and drop programs that are not worthwhile,” King said. ”It`s also forced elementary schools and high schools to share resources and for the schools and libraries to talk about sharing books.”
The law is supported by Gov. Jim Edgar, Department of Revenue Director Douglas Whitley and several tax watch groups; it is opposed by the Illinois State Board of Education, the Illinois Education Association and the Illinois Association of School Boards.
School districts defend their past fiscal practices, saying they were forced to boost their budgets because of soaring operating costs and staff salaries.
”Just like every resident who shops at a grocery store, we are faced with higher prices,” said Lisa Beckwith, assistant superintendent for finance and operations in Glenbard District 87, which has schools in Glen Ellyn, Lombard and Carol Stream. ”We have to pay those.”
Others said they sought more from property taxes because of the state aid formula that reduces the amount of state support in proportion to the amount a district`s equalized assessed valuation rises.
”Before, we could count on the money from the equalized assessed valuation, but now we`re losing $720,000 from the state and $670,000 because of the cap,” said Ray Reynolds, assistant superintendent for business and operations in Woodstock Unit District 200. ”It`s a double impact.”
Many said they are seeking relief from a proposed state constitutional amendment on the Nov. 3 ballot. If the school funding issue passes, it would force Illinois to pay the lion`s share of local educational costs.
In the meantime, several districts, including Round Lake District 116, McHenry School District 15 and Joliet Township High School District 204, are also turning to voters next month for help in making up for their losses.
”We don`t expect it to be easy,” said McHenry Supt. D. William Dodds, adding that voters in the community haven`t passed a tax rate hike since 1968. ”We`re going door to door telling voters face to face that we`re not trying to be a Cadillac, we want to improve and become a Chevrolet.”
