Nine questions were answered at the District 15 Board of Education Candidates Forum held Tuesday, April 2nd. See below to find the start time for each question.

To view the video visit Northwest Suburban Council PTA/PTSA and click on the VOTE button.

Voter turnout was 16% two years ago for an election that directly affects you:

Current examples of District 15 School Board [...]]]> Election Day is around the corner on April 9th. Will you vote?

Voter turnout was 16% two years ago for an election that directly affects you:

• Taxpayer? 63% of your property taxes go to District 15 and District 211 schools
• Parent? Board decisions directly affect your children’s education

Current examples of District 15 School Board decisions:

1. Late Start or Early Dismissal: Provide weekly professional development time for teachers by starting school 50 minutes later on Monday or Wednesday? Or dismissing 50 minutes early on Friday?
2. Class Sizes vs. Taxes: Increase class sizes and reduce taxes? Or reduce class sizes and increase taxes?

What issues are most important to you? What are candidates’ positions on these issues?

Contact the candidates or Mark Your Calendar for the District 15 Board Candidates’ Forum:

• Tuesday, April 2nd 7:00pm at Walter R Sundling Junior High School

MORE INFORMATION

District 15 Candidate Forum

• Palatine Patch District 15 Candidates Forum Held by Northwest Suburban Council PTA/PTSA

District 15 Candidates

• Journal & Topics District 15 Candidates Tackle Issues
• Daily Herald District 15 Candidates
• Palatine Patch District 15 Candidates

District 211 Candidates

• Daily Herald District 211 Candidates
• Palatine Patch District 211 Candidates

As a result, the Illinois TRS contribution has been described by Illinois Speaker Madigan and others as a “Free Lunch” for suburban and downstate school districts during pension reform discussions.

I agree with the pension [...]]]> One of the reasons often cited for shifting the cost of teacher pensions to local school districts is to increase local accountability for end-of-career “pension spiking” (or as Rich Miller of Capitol Fax recently described it “forcing districts to be much more cautious in granting pay raises that lead to bigger pensions.”)

I agree with the pension cost shift principle but NOT how it would be implemented in any of the bills under discussion. In any case, the cost shift should instead be part of school funding legislation and address issues such as Chicago receives too much school funding from Illinois.

A far simpler solution would be to change the current 6% salary increase threshold. This could be changed to a lower percentage or be based on CPI.

From discussions with community members there is a clear consensus that the 6% threshold is too high. Why not make this change separately from the broad pension reform changes under discussion?

What does the current law say?

The current 6% threshold is in 40 ILCS 5/16-158 Contributions by State and other employing units:

. . . . If the amount of a teacher’s salary for any school year used to determine final average salary exceeds the member’s annual full-time salary rate with the same employer for the previous school year by more than 6%, the teacher’s employer shall pay to the System, in addition to all other payments required under this Section and in accordance with guidelines established by the System, the present value of the increase in benefits resulting from the portion of the increase in salary that is in excess of 6%. . . .

One reason is Illinois provides about three times as much funding to Chicago compared to suburban and downstate districts that have similar property values per student.

Chicago receives about $5,400 per pupil from the [...]]]>

The question I asked in my last post is Why are Chicago property taxes so low?

One reason is Illinois provides about three times as much funding to Chicago compared to suburban and downstate districts that have similar property values per student.

Chicago receives about $5,400 per pupil from the state and $7,200 per pupil from property taxes.

Contrast this with other districts that receive about $1,800 per pupil from the state and $12,100 per pupil from property taxes.

Local Funding vs Property Values

The following charts show how state and local funding varies depending on property values per pupil:

1. State Funding per Pupil
2. Local Funding per Pupil

Suburban and downstate taxpayers are in effect subsidizing Chicago property taxpayers.

The latest example is Illinois House Bill 98 (see also TRS Pension Reform Proposals) filed on January 9, 2013, by Reps. Elaine Nekritz, David Harris and Sara Feigenholtz. This was also filed as Illinois Senate Bill 35 by [...]]]> Shifting responsibility for teacher pensions from Illinois to suburban and downstate property taxpayers is a recurring theme in pension reform discussions.

The latest example is Illinois House Bill 98 (see also TRS Pension Reform Proposals) filed on January 9, 2013, by Reps. Elaine Nekritz, David Harris and Sara Feigenholtz. This was also filed as Illinois Senate Bill 35 by Sen. Daniel Biss. Large parts of these bills are also included in Illinois Senate Bill 1 filed on January 9, 2013, by Sen. John Cullerton.

An important point missing from these discussions is the glaring disparity in property tax rates for Chicago and surrounding suburbs.

This disparity is apparent when looking at property tax rates for the suburbs immediately adjacent to Chicago and comparing tax rates for houses with the same market values located just a block away in Chicago. See the one-page chart showing rates compared to Chicago for 25 suburbs going counterclockwise from north to south around Chicago.

Click for full-size printable PDF chart

Putting this in more concrete terms, a $150,000 house in Chicago with a standard $6,000 homeowner exemption would pay property taxes of $2,103. In suburbs adjacent to Chicago, taxes would be about $3,813. This is 81% higher than Chicago.

Why are leaders in Springfield considering legislation that would shift funding responsibility to suburban and downstate property taxpayers? And why would they increase the disparity between Chicago and suburban/downstate property taxes?

I’ll leave these as rhetorical questions for the moment….

So why are Chicago property taxes so low? One reason is Chicago receives too much school funding from Illinois.

Legislative History

Previously the pension cost shift was proposed in Illinois House Bill 6258 filed on December 5, 2012, by Rep. Elaine Nekritz and Rep. Daniel Biss, and subsequently filed as House Floor Amendment No. 9 to Illinois Senate Bill 1673 during the lame duck session on January 4, 2013. Essentially the same bills have been refiled as HB0098 and SB0035. Large parts of these bills are also included in SB0001 as noted above.

Illinois has a “levy it or lose it” property tax cap law. As a result, annual property tax levy votes not only affect the coming year but also permanently limit future levies as well.

Although there are [...]]]> On December 12, 2012, the District 15 School Board voted 5-2 to increase the 2012 levy by 3%.

Illinois has a “levy it or lose it” property tax cap law. As a result, annual property tax levy votes not only affect the coming year but also permanently limit future levies as well.

Although there are good reasons in favor of a lower levy, the three main factors in my vote for a higher levy are:

1. Illinois’ Financial Problems. Illinois has total liabilities around $200 billion (including according to recent accounts $97 billion in unfunded pensions, $44 billion for retiree health care, $28 billion outstanding bonds, and $7 billion in unpaid bills). This liability is greater than $40,000 for every household in Illinois. It is highly likely the Springfield solution to this problem will result in lower school funding for suburbs and downstate Illinois.

2. Increasing Student Populations. District 15 has recently seen increasing student populations. This year the annual Student Assignment Plan report showed an increase in student population of 0.9% over last year, and last year was 0.6% higher than the previous year. For a longer view, see the Average Daily Attendance Chart going back to 1997.

3. Class Sizes Are High. District 15 class sizes are among the highest of surrounding districts and there were 16 classes of 30 or more students at the beginning of this year. The Board has not yet considered whether to change target class sizes now that District 15′s finances have been stabilized.

How will this affect your property tax bill?

The typical tax bill in 2012 for a $300,000 house was $7,172, of which $2,446 was for District 15. The levy I voted for would have raised this by about $70 in 2013, an increase of 2.9% from $2,446 to $2,516 for District 15 taxes. The 2.9% increase takes into account the bond and interest levy, which is unchanged from the prior year.

Five other board members voted for a smaller levy that will increase District 15 taxes by about $63, an increase of 2.6% from $2,446 to $2,509. The final increase will depend on the amount of new construction in 2012 within District 15 boundaries. It should also be noted that Cook County has a complex method for calculating tax rates and this option might result in the same District 15 tax that I voted for. One board member voted against both options.

Over the past several years nearly all Cook County property taxpayers have experienced large and unpredictable changes in their property tax bills due largely to the “7% Expanded Homeowner Exemption,” which is being phased out. Most Palatine taxpayers in 2012 qualified only for the standard $6000 homeowner exemption and will no longer be affected by this law.

They claim “$5.2 million in concessions,” which was a CTC estimate of savings spread over four years. The current estimate of the deficit for that same four year period is $37.7 million.

Following is the joint statement issued on June 9, [...]]]> In their latest ad the CTC violated the agreement to keep last year’s negotiations private.

They claim “$5.2 million in concessions,” which was a CTC estimate of savings spread over four years. The current estimate of the deficit for that same four year period is $37.7 million.

Following is the joint statement issued on June 9, 2011: The Board of Education and the Classroom Teachers’ Council have recently held meetings in an effort to address the financial condition of the District. Both parties acknowledge that each made genuine and meaningful proposals. However, the parties were unable to reach an agreement at this time. The Board of Education and the Classroom Teachers’ Council have an existing agreement through the end of the 2011-2012 school year. The parties both hope to continue to build a positive working relationship as they look ahead to future negotiations.

The following chart (also in printable PDF format) shows education and other fund balances plus the February forecast for these balances. This shows [...]]]> The Classroom Teachers’ Council (CTC) recently started an ad campaign but is omitting important information. In today’s ad they left out information needed to understand the impact of District 15′s structural deficit.

The following chart (also in printable PDF format) shows education and other fund balances plus the February forecast for these balances. This shows what will happen if the District doesn’t take action to eliminate the structural deficit.

To learn more about District 15′s structural deficit see What caused District 15′s deficits?

It’s also important to note that fund balances are snapshots as of June 30th. Sufficient June 30th fund balances are needed to pay the District’s bills until fall property taxes are received.

Click for printable PDF version

Revenues: Revenues have gone up 2.0% annually (excluding $1.3 million in federal stimulus revenue in 2008-09) from 2008-09 to 2012-13.

Salaries: Salaries in the Education Fund are up 3.4% annually from $78.0 million in 2008-09 to $89.0 million next year.

Benefits: Benefits for all District [...]]]> In a nutshell, salaries and benefits increased faster than revenues.

Revenues: Revenues have gone up 2.0% annually (excluding $1.3 million in federal stimulus revenue in 2008-09) from 2008-09 to 2012-13.

Salaries: Salaries in the Education Fund are up 3.4% annually from $78.0 million in 2008-09 to $89.0 million next year.

Benefits: Benefits for all District 15 employees are up 7.0% annually from $21.3 million in 2008-09 to $27.9 million next year.

Click on District 15 Financial Summary (PDF, 1 page) for an annual summary of revenues, salaries, benefits and other expenditures.

If you have any questions or would like a copy of the supporting details please contact me. I’d also encourage the community to get involved and provide your feedback on the budget reduction proposal presented to the Distrct 15 Board on February 8th. See District 15′s Budget Reduction Proposal.