Tax referendum survey

[Ted]

The proponents of a referendum to increase the property tax rate in District 100 have been posting on Facebook a survey. They would like as many people as possible to fill out the survey (it is very short).  Here is a link:

https://www.surveymonkey.com/r/HR6XDLF

Some information about the numbers in the survey - The $160 increase per $100,000 of assessed value is for someone with no home owner's exemption. If someone has a home owner's exemption, the amount is $118 increase per $100,000 of assessed value. Another way to gauge the increase on someone's house is as an increase on the current property taxes. If you pay $4,000 in property taxes, the proposed referendum would increase your taxes by around $150. If you pay $5,000 in property taxes, the proposed referendum would increase your taxes by $188. If you pay $6,000 in property taxes, the proposed referendum would increase your taxes by around $225. The referendum would increase your taxes by approximately $37.66 for every $1,000 in property taxes paid.

[berwyn senator]

Is there anywhere I can find out what this money will be used for or are we just giving the board a blank check?I hate to bother you but you seem to have much knowledge of these issues.When I was younger  I just voted for the schools,I am concerned as many are where the money is going to be used.

[Ted]

Is there anywhere I can find out what this money will be used for or are we just giving the board a blank check?I hate to bother you but you seem to have much knowledge of these issues.When I was younger  I just voted for the schools,I am concerned as many are where the money is going to be used.

The district has been running a deficit for the last several years and they are running out of money in the reserve funds.  The tax increase is what the board considers to be the minimal amount needed to address the deficit problem.

  Several points here - First, the state of Illinois has made cutbacks in the amount of funding that districts get from the state.   Since D100 is more dependent on state funding than more affluent districts, the cutbacks made a larger dent in the revenue needed to run the district.

  Second, a few years ago, the state of Illinois changed the funding formula for extra money.  Extra money used to go to district based on the number of low income children.  That changed (in 2014 I believe) from number of low income students to number of students at poverty level (I think).  That affected funding in D100 as well.

Third, the enrollments in D100 have increased by about 10%, mainly due to providing pre-K education for at-risk 3 year olds and 4-year olds.  For example, in 2014, the number of pre-K students in the district was 200.  In the last 2 years, the district has cut back on the pre-K program because of budget deficits.  The other part of the enrollment increase is due to newer and younger families moving into Berwyn over the last decade.

  Another point of comparison - D98 has had a balanced budget for most of the past decade but D98 has a higher tax rate.  The referendum would bring the D100 base tax rate to be a tiny bit higher than D98's (by 6 cents).  D98 also gets $1500 more per pupil from the state than D100.

  If D100 had had the same tax rate as D98 and had the same state funding level as D98, it would have had had a $6 million dollar surplus rather than a deficit in the low millions of dollars.

One more point - D100 is exceeding its debt limit and people in D100 are paying property taxes to pay off that debt. Last year, the district issued new bonds that exceeded the debt limit (which is allowed under Illinois law).  The only way to have prevented that would have been for someone to try to collect enough signatures to force the new bond to referendum.

  That is another difference - D98 residents do not pay any property taxes to pay off debt while D100 residents pay a large portion of their property taxes to pay off the debt.  The new taxes proposed by the referendum would be on top of that.

[berwyn senator]

I have nothing against the children or schools,I appreciate your knowledge and input. I wonder if this is a good time to ask for a tax increase ?

[markberwyn]

I have nothing against the children or schools,I appreciate your knowledge and input. I wonder if this is a good time to ask for a tax increase ?

When would be a good time to ask for a tax increase? Lay out the scenario for me.

[Ted]

I have nothing against the children or schools,I appreciate your knowledge and input. I wonder if this is a good time to ask for a tax increase ?

Since the reserve funds have been depleted and since it does not look like the state is going to go back to its previous funding levels, I think this tax rate increase is necessary and is affordable to most people in this community.

One way or another, you are going to pay for it - either by a tax rate increase via referendum or by the district continuing to issue Working Cash bonds that exceed the debt limit (which you then have to pay taxes to pay off - with interest).

Last fall, the D100 board was told by its financial officers that they would not have enough money in the reserve funds to pay the bills in January of 2017.  The board then issued a working cash bond to shore up the reserve funds.  You, as a tax payer, are now paying extra taxes to pay off that bond - both principle and interest.

  If the referendum fails, then the board will probably continue to issue working cash bonds to pay the bill and that will cost you MORE than the tax rate increase in the referendum because you would then be paying taxes for both the principle and the interest.

In other words, passing the tax rate referendum will be CHEAPER for you because you will not have to pay taxes to pay off the interest on any future debt.  The only way to stop the board from continuing to issue more debt would be to either pass the referendum or get signatures on a petition to put any future bonds to referendum - something which would take a lot of time and effort within a 30 day period.

  In short, voting for the referendum will probably cost you less in the long run than allowing the board to continue to issue debt.

[berwyn senator]

I again might say thank you for the information and your efforts,I hope the board is making all this clear to the residents. More questions if you don't mind will this stop the bleeding or will there be more bonds issued in the future.Will this tax increase pay off present debt? I hope the residents are reading this conversation as I find this very informative.

[Ted]

I again might say thank you for the information and your efforts,I hope the board is making all this clear to the residents. More questions if you don't mind will this stop the bleeding or will there be more bonds issued in the future.Will this tax increase pay off present debt? I hope the residents are reading this conversation as I find this very informative.

No, I do not think the board will use the tax increase to pay off the current debt.  You are already paying property taxes to pay off the current debt.  It is a possibility that the board could use the tax increase to pay the current debt but I doubt the board will do it.

I also doubt the board will present this argument to the voters.  They tend to be focused on the kids and what is best for the kid so their argument will be this is for the kids.

  Even though it is counter-intuitive, as I posted earlier, it is cheaper to vote YES on the referendum than allow the board to issue more debt.  Most people will have a knee-jerk reaction and vote no and not realize that they are going to pay in higher taxes one way or the other - either via a tax rate increase via the referendum or via the continuing issuance of working cash bonds to keep the district afloat - which also raises taxes.

[Ted]

... will this stop the bleeding or will there be more bonds issued in the future....

  There is nothing to prevent the board from issuing new bonds in the future, even if the referendum passes.  In fact, last fall, the board issued two different types of bonds - a working cash bond for operational purposes (which is a similar to a short term loan) and a regular bond to address infrastructure issues (which was a long term 20 year bond).

  I believe the additional $2.2 million per year should stop the bleeding but there is nothing to prevent the board from issuing bonds in the future except perhaps someone bringing a law suit against the board.  That happened in West Chicago about a decade ago when the board exceeded their debt limit and the West Chicago district issued a "regular" bond.  Working cash bonds are different because they are like short term loans but even working cash bonds can be put to referendum if enough signatures are collected within 30 days of the board declaring its intention to issue the bonds.

  At least, that is my understanding (which may be wrong).

[berwyn senator]

We have always voted for the schools, pay little attention to where the money goes.Believing what the board had stated about improving the schools and property values. I wonder if this is true property values are coming back, are the schools improving? or are they still influenced by politics? Again I say your posts are the most interesting.

[chandasz]

Thank you Ted for starting this thread! I am working with a group called Fix the Funding: Berwyn D100. We are trying to get the word out to the community about how much this referendum is needed.

Ted did explain a quite a bit but one thing to mention: The board is COMMITTED to balancing the budget. They were not happy to refinance this last fall but it was the only way to make the budget work this year even after HUGE budget cuts that were put through. They are out of ways to cut the budget that will not have huge detrimental impacts on our kids and our schools. The refinancing last fall allowed them to stay on track this year and be able to make some emergency repairs that several of the schools needed (the patches are just costing us more and more)-- most notably-- there is an outside wall at Emerson Elementary that is failing- that needs repair.

Thank you to you all who have said you have always voted for the schools - we really do need you now. The schools have not passed a operational need referendum in close to 30 years. Yes-- 2 schools were built since then but that money did not address the increase of operational expenses that go a long with a much larger district.

We are trying to keep the costs as low as possible to our taxpayers while trying to keep our schools above water. D100 schools are doing fantastic things for their kids but we're at risk of losing quite a bit without this additional funding.

At this point-- it's not about ADDING services-- it's really about not LOSING any. If we don't pass this referendum-- the cuts will be in the classrooms with higher class sizes, completely doing away with sports and fine arts and we will continue to lose teaching staff (turnover is expensive!). Families will continue to leave and our stability and housing values are at risk.

Feel free to reach out if you have any questions or want to get more involved....

Find us at "Fix the Funding: Berwyn D100" on Facebook

Email us at fixthefunding@gmail.com

Donate at https://fundly.com/fix-the-funding-berwyn-d100
We are trying to raise money to be able to send out information to our voters in Berwyn. We're just a group of parents and other community members....

Come to our upcoming fundraiser at Outtaspace on February 12 from 2-6pm. We'll have music, kids activities, food, raffles, auctions-- fun for all ages.

[chandasz]

More information on the referendum can be found here:
http://www.bsd100.org/apps/pages/index.jsp?uREC_ID=345084&type=d&pREC_ID=888976

[chandasz]

There will be informational meeting regarding the upcoming referendum here:

February 3 – LaVergne Education Center at 9 am
February 6 – LaVergne Education Center at 9 am (Presentation will be in Spanish)
February 7 – Heritage Middle School at 6 pm
February 15 – Hiawatha Elementary School at 6 pm
March 2 – Komensky Elementary School at 6 pm (Presentation will be in Spanish)
March 8 – LaVergne Education Center at 9 am
March 9 – LaVergne Education Center at 9 am (Presentation will be in Spanish)
March 15 – Irving Elementary School at 6 pm
March 29 – Pershing Elementary School at 6 pm   

[Ted]

We have always voted for the schools, pay little attention to where the money goes.Believing what the board had stated about improving the schools and property values. I wonder if this is true property values are coming back, are the schools improving? ... 

  I do not think property values are going to come back to 2005 levels for a long time.  I do not think passing the referendum will increase property values at all.  I have argued with board members about this argument.  I think it is a bogus argument for which there is no evidence that tax rate increases will increase property values - in fact, I have presented arguments and evidence (in facebook discussions) that showed cases where a tax rate increase did not improve property values versus the property values in neighboring communities that did not have  a tax rate increase.

... or are they still influenced by politics? ...

Unfortunately the political influence in D100 has gotten worse since 2013 when several candidates supported by Mayor Robert Lovero were elected to the school board, defeating long time board members Joanne Zendol and Dawn Rinehart.

  Right after the 2013 election, the board changed its long time architectural firm, long time auditing firm and (a year later) its long time law firm to the DelGaldo law firm (which has close ties to Lovero).

  In the 2015 election, DelGaldo was explicitly involved in the election of school board candidates associated with or backed by Lovero (most probably in order to keep their contract as the school district's lawyer).

  Also, after the 2013 election, politically connected employees of the district were handsomely rewarded and there were also patronage hirings as well.

  One of the newer school board members has been explicit in her support of DCOB candidates in the February election (on facebook) and does not try to hide her attachment to the DCOB.

  So, I would say the district has become more political since the 2013 election.

[Ted]

.... The board is COMMITTED to balancing the budget. They were not happy to refinance this last fall but it was the only way to make the budget work this year even after HUGE budget cuts that were put through. ...

  What happened last fall was more than a refinancing of existing bonds.  There was also a new working cash bond that was not a refinance of existing bonds and which citizens could have put to referendum if they had collected enough signatures within 30 days of the board declaring its intent to issue a working cash bond.

  Last fall, the board did two things - First, it refinanced existing 20 year bonds to bring in money to do some infrastructure projects.

Second, the board also issued a new Working Cash Bond to replenish the reserve funds so they would have enough money to pay the bills in January.

The Working Cash Bond was a new bond and it was a short term bond - I have likened it to a PayDay loan (although I know there are board members who do not like that analogy).  The Working Cash bond must be paid out of the regular property taxes rather than out of the debt property tax.  It is short term in length (I think 3 to 5 years) and it essentially cuts into the operational revenue used to run the district. Instead of using "regular" property taxes for operating the district, the money is used to pay off the principle and interest on the working cash bond.  Interest rates on working cash bonds are usually much higher.

  Thus, what the board did last fall was more than re-financing existing long term bonds.  It was also issuing new short term bonds as well.

[berwyn senator]

I do not like the thought of loosing music and the arts,sports I could care less about.There is way too much emphasis on sports, which takes time from studying and other academics.Why didn't the projections of cost in the new buildings include operational expenses? The new law firm change did this save or cost more money?District employees who were rewarded are they willing to a cut in pay? So now asking for more money without cuts does not sound like a commitment to balancing the budget.

[Ted]

....Why didn't the projections of cost in the new buildings include operational expenses?

  The infrastructure projects were for the old buildings. For example, the wall is falling down at Emerson and the heating system at Hiawatha keeps breaking down.  The district has claimed they deferred these projects because of the budget deficit.

District employees who were rewarded are they willing to a cut in pay? So now asking for more money without cuts does not sound like a commitment to balancing the budget.

  I do think the district is trying to balance the budget.  The issuance of the working cash bond was a desperate measure - no school board wants to issue bonds that get paid back through the operational revenue, because that cuts into the money for instruction and building maintenance.

  As for the politically connected getting large raises and promotions, we are talking about a handful of people and definitely not taking about teachers. The money involved is minute compared to the total budget.  But, this type of political favoritism does irk me.  And, I doubt that handful of people are going to give back their raises.

[berwyn senator]

I live in a large bungalow time has taught me expect the unexpected.Basic finance teaches always to have an emergency fund! They do have inspectors to look at areas that may need repairs in the near future or present one would think, educated people would do this.They all must live in homes? Simple roofs, keep track when replaced, how long they last? I guess I am trying to be to practical,sometimes putting off the inevitable costs much more in the long run. Politics has always been an issue because the voters need to take more control how I have no idea. The Teachers suffer all the political consequences and can discouraged from what goes on.I think there is always some type of excuse! For not cutting in the correct places, nepotism.

[markberwyn]

Politics has always been an issue because the voters need to take more control how I have no idea.

Voting.

[berwyn senator]

How many residents do not vote?