The Grayslake District 46 Board voted to freeze their levy in December. They did not want to raise taxes during this struggling economy. However, they actually did raise taxes. I pointed this out to board members the following day and have been waiting to see when the board would tell the public. I even mentioned this in my townhalls halls during the teacher strike.
Here is a summary of how this happened:
- The board voted down the levy increase on Dec. 19th. Board Member Michael Carbone tried to explain to the board the correct way to not raise taxes and provided them 2 options:
- Raise the levy as presented and then abate back the increase that was not new construction in the spring when the tax rates and actual extension dollars were set.
- Raise the levy, but abate bonds equaling the increase.
- With the levy increase defeated, District Attorney Kevin Gordon, told them to just levy the same as last year. They had to ask the Attorney because the Administration was completely unprepared for this eventuality even after several years of going through the same procedural explanations. This is not the first time this administration has shown preparedness incompetence and it probably won’t be the last.
- The board levied $31.9 million, the same levy as in 2011. However, the actual levy extension received in 2012 was $31,273,142 million. Thus the board increased the levy request by over $600,000.
What are some of the consequences and board choices?
- Taxes were raised, not frozen. We will not know the exact tax increase until sometime in late March/early April when the County Tax Extension Office and the Assessors Office complete their work. The district could estimate these numbers with the Tax Extension formulas provided by the county.
Question: Have they done so and why are they continuing to keep this information from the public?
- The tax increase brings the district dangerously close to the maximum education fund tax rate. This limits the flexibility of the board for next year since the maximum levy rate will most likely be reached (according to PMA), capping the ability of the new board to raise the levy to the maximum.
- The district can most likely shift more of the levy dollars from O&M (Operations and Maintenance) into the Ed fund, again pushing the limits for ed fund limiting rate even closer. The O&M fund is expected to reach its limiting rate cap this year
- Do nothing and raise taxes
- Abate back any monies over the new construction amount keeping taxes frozen
- Abate bond monies equal to the tax increase effectively keeping taxes frozen.
The question is simple, will the board keeps it’s promise to not raise taxes or will they break their promise and raise taxes anyway?
- Option 1 causes future issues. It brings the district dangerously close to the Education fund maximum rate. When that is reached, the board CANNOT levy additional ed fund monies without a referendum. This option allows the least flexibility going forward.
- Option 2 allows the board a little more flexibility. Although, if there is another double digit drop in assessments this year, the district will still most likely reach it’s maximum ed fund rate. It does however allow the board to keep it’s promise to not raise taxes.
- Option 3 allows both the board to keep it’s promise and allows flexibility for the board next year. Abating bonds allows the board next year to explore restructuring their debt. For those of you who are not familiar with this, a previous board back loaded the payments of the bond schedule. There are 3 current board members who were on the issuing board (Sue Facklam, Karen Weinert, Keith Surroz). The payments increase every year as shown in the repayment schedule below [yes, the board knew this and did not plan for this properly]. This option provides the most flexibility to the future board.