Thursday, April 25, 2013

Does Your Superintendent and School Board Want to Increase Your Sales Tax?

A little known provision of Illinois law, called the School Facility Occupation Tax (see here for the text of the law), allows the school boards representing more than 50% of the student enrollment in a county to place a question on the ballot at the next election to raise the sales tax in the county up to 1%.  The proceeds from such sales tax must be used for school facilities and are allocated to the schools based on student enrollment.

In the recent election on April 9th, voters approved the sales tax increase in 6 of 17 counties and rejected the sales tax increase in 11 of 17 counties.  Across the state, the School Facility Occupation Tax has been approved in 17 of the 102 counties.

Grundy County voters may be asked to vote on the School Facility Occupation Tax in the next election.  Grundy County superintendents and school boards are already looking into the possibility of gaining additional school revenues through such a sales tax increase.  A number of school boards have been privy to presentations by Stifel, Nicolaus, an investment banking firm that specializes in bond financing, regarding the increased revenues available from a sales tax increase, the procedure for getting such a question on the ballot, and the keys to a successful vote.*  See here for the presentation to the Finance Committee of Minooka CCSD 201 (Stifel's presentation begins on page 12 of 47).

A joint school board meeting of Grundy County school boards has been scheduled to discuss the School Facility Occupation Tax.  The joint school board meeting will take place May 8th at 7 p.m. at the Coal City Early Childhood Center, 755 South Carbon Hill Road, Coal City, Illinois (for the meeting notice and the agenda of the meeting, see here).  The public, of course, is welcome to attend and comment.

For recent coverage regarding the sales tax increase proposal in Grundy County, see here and here.


*Stifel's angle, of course, is to place itself to receive increased advisory fees from such school districts when they issue more bonds in anticipation of the revenue represented by the increased sales tax.

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