School Board Hears Explanation For Tax Rate Increase

The economy’s downturn is forcing officials to go back on a promise made in 2006 to hold down the tax rate.

Tim Neubauer, assistant superintendent for business and finance, told School Board members at the May 9 meeting he has received about 20 calls and e-mails in the last week from residents wondering why the tax rate is increasing from $5.06 to $5.83 for Will and Kendall counties, and $6.03 for Kane County.

As part of a referendum promise in 2006, district officials said they purposely held down the tax rate, requiring the district to return a portion of the tax money it received back to the taxpayers. This lessened the amount the taxpayers paid the district, and also reduced the amount the district collected as revenue.

Because growth in the community was booming in 2006, District 308 officials expected the tax base to also continue growing and provide the district with sufficient revenues, making them feel comfortable telling taxpayers the tax rate would stay at $5.06 for somewhere between five and 10 years.

But when the increase in the tax base did not materialize, funding to the school district suffered.

“In the early 2000s to mid-2000s we saw a situation where property values were going through the roof and exerting pressure on the tax rate to drive it down,” Neubauer said. “People were flipping houses like crazy. Then the fall of 2008 hit and everything went in the other direction. Since 2008, we’ve had the reverse scenario.”

For five years the district was able to hold the tax rate at $5.06 by abating bonds, but officials said they are now at the point where they have exhausted their capacity to restructure the bond payments.

Neubauer said school districts are “all a victim to the same formula” that when assessments drop, the tax rate goes up.

He said lately much of the growth District 308 is seeing is “internal.”

“It’s people having babies,” he said. “We’re not getting it with new houses and that’s not good. With 80 percent of our taxbase being residential this is killing us.”

Board members asked what can be done to lower the tax rate in the future.

Neubauer said the district needs more commercial development.

Board member Lynn Cullick agreed.

“It’s in all of our best interests to lean on our Village Board to aggressively seek that business development we so desperately rely on because unfortunately it’s not up to us,” she said. “It’s the only way to ever change that.”

Neubauer also suggested asking the county clerk to not collect as much in taxes, and petitioning the legislatures to change the methods by which school districts are funded.

He said the district does well at keeping expenses down.

District 308’s operating cost per student is $9,214, the second-lowest among 13 comparable districts and far below the $10,658 average of those same districts, he said.

“We really watch our pennies here,” Neubauer said. “Our operating expense per pupil is a credit to our building leadership.”