The next meeting of the Minooka CCSD 201 school board is
Wednesday, December 16, 2015. The Committee of the Whole Meeting starts
at 6:00 p.m. in the board room at the Minooka Primary
Center located at 305 Church Street in Minooka. The Committee of the
Whole Meeting will be followed by a Truth in Taxation (tax levy) hearing
at 6:45 p.m. The Truth in Taxation hearing will then be
followed by the regular Board Meeting at 7:00 p.m. All of the meetings are
open to the public, and everyone is encouraged to
attend. You can find the agenda for each of the meetings here.
Information for the Committee of the Whole Meeting, the Truth in Taxation hearing, and the regular Board Meeting can be found here.
Showing posts with label tax levy. Show all posts
Showing posts with label tax levy. Show all posts
Friday, December 11, 2015
Monday, December 7, 2015
Finance Committee Meeting
There will be a meeting of the Finance Committee of the Minooka CCSD
201 school board on Wednesday, December 9, 2015 at 6:00 p.m. in the board
room at the Minooka Primary Center located at 305 Church Street in
Minooka. The meeting is open to the public, and everyone is encouraged
to attend. You can find the agenda for the meeting here.
Saturday, November 14, 2015
Next Minooka 201 School Board Meeting and Proposed Tax Levy
The next meeting of the Minooka CCSD 201 school board is
Wednesday, November 18, 2015. The Committee of the Whole Meeting starts
at 6:00 p.m. in the board room at the Minooka Primary
Center located at 305 Church Street in Minooka. The Committee of the
Whole Meeting will be followed by the regular Board Meeting at 7 p.m. Each of the meetings is
open to the public, and everyone is encouraged to
attend. You can find the agenda for each of the meetings here.
Information for the Committee of the Whole Meeting and the regular Board Meeting can be found here.
One item of note that will be discussed at both meetings is the proposed tax levy for fiscal year 2016. The information regarding the proposed levy can be found here. The proposed tax levy represents an increase of approximately 17% from last year. About 7% of this increase is due to an increase in the Equalized Assessed Valuation (EAV) of the district. However, the remaining 10% increase is due in large part to an increase in the levy for the Tort Immunity Fund from $650,000 last year to $2,000,000 this year.
Information for the Committee of the Whole Meeting and the regular Board Meeting can be found here.
One item of note that will be discussed at both meetings is the proposed tax levy for fiscal year 2016. The information regarding the proposed levy can be found here. The proposed tax levy represents an increase of approximately 17% from last year. About 7% of this increase is due to an increase in the Equalized Assessed Valuation (EAV) of the district. However, the remaining 10% increase is due in large part to an increase in the levy for the Tort Immunity Fund from $650,000 last year to $2,000,000 this year.
Sunday, December 14, 2014
Next Minooka 201 School Board Meeting
The next meeting of the Minooka CCSD 201 school board is
Wednesday, December 17, 2014. The Committee of the Whole Meeting starts
at 6:00 p.m. in the board room (the old library) at the Minooka Primary
Center located at 305 Church Street in Minooka. The Committee of the
Whole Meeting will be followed by a Truth in Taxation (tax levy) hearing
at 6:45 in the gymnasium. The Truth in Taxation hearing will then be
followed by the regular Board Meeting at 7 p.m. All of the meetings are
open to the public, and everyone is encouraged to
attend. You can find the agenda for each of the meetings here.
Information for the Committee of the Whole Meeting and the Truth in Taxation hearing can be found here. Information for the regular Board Meeting can be found here.
Information for the Committee of the Whole Meeting and the Truth in Taxation hearing can be found here. Information for the regular Board Meeting can be found here.
Friday, December 13, 2013
Next Minooka 201 School Board Meeting
The next meeting of the Minooka CCSD 201 school board is
Wednesday, December 18, 2013. The Committee of the Whole Meeting starts
at 6:00 p.m. in the board room (the old library) at the Minooka Primary
Center located at 305 Church Street in Minooka. The Committee of the
Whole Meeting will be followed by a Truth in Taxation (tax levy) hearing
at 6:45 in the gymnasium. The Truth in Taxation hearing will then be
followed by the regular Board Meeting at 7 p.m. All of the meetings are
open to the public, and everyone is encouraged to
attend. You can find the agenda for each of the meetings here.
The information for the Truth in Taxation (tax levy) hearing can be viewed here. Notice that among the amounts proposed to be levied is an amount ($650,000.00) for the tort immunity fund. (For a discussion of this fund and the risk management plans that are used to "justify" these levies, see here.) The school board adopted a new risk management plan last year for this purpose. Notice, however, that the district levied $1,874,457.00 in the tort immunity fund the year prior to adopting the new risk management plan. It is very possible that such levy was excessive based on the risk management plan that was then in place.
The information for the Truth in Taxation (tax levy) hearing can be viewed here. Notice that among the amounts proposed to be levied is an amount ($650,000.00) for the tort immunity fund. (For a discussion of this fund and the risk management plans that are used to "justify" these levies, see here.) The school board adopted a new risk management plan last year for this purpose. Notice, however, that the district levied $1,874,457.00 in the tort immunity fund the year prior to adopting the new risk management plan. It is very possible that such levy was excessive based on the risk management plan that was then in place.
Friday, January 18, 2013
Next Minooka 201 School Board Meeting
The next meeting of the Minooka CCSD 201 school board is
Wednesday, January 23, 2013. The Committee of the Whole Meeting starts
at 6:00 p.m. in the board room (the old library) at the Minooka Primary
Center located at 305 Church Street in Minooka. The Committee of the
Whole Meeting will be followed by the regular Board Meeting at 7 p.m.
Both meetings are open to the public, and everyone is encouraged to
attend. You can find the agenda for each of the meetings here. In addition, for those who are interested, click here and here for information regarding issues that will be discussed at the Committee of the Whole Meeting and the Board Meeting.
Friday, December 14, 2012
Next Minooka 201 School Board Meeting
The next meeting of the Minooka CCSD 201 school board is
Wednesday, December 19, 2012. The Committee of the Whole Meeting starts
at 6:00 p.m. in the board room (the old library) at the Minooka Primary
Center located at 305 Church Street in Minooka. The Committee of the
Whole Meeting will be followed by a Truth in Taxation (tax levy) hearing at 6:45 in the gymnasium. The Truth in Taxation hearing will then be followed by the regular Board Meeting at 7 p.m. All of the meetings are open to the public, and everyone is encouraged to
attend. You can find the agenda for each of the meetings here. In addition, for those who are interested, click here for information regarding issues that will be discussed at the Committee of the Whole Meeting and the Board Meeting, and click here for the information that will be discussed at the Truth in Taxation (tax levy) hearing.
Tuesday, December 11, 2012
Tax Rates Set to Rise With or Without Referendum
Sometime in the next few years, the taxpayers of Minooka CCSD 201 will be asked to raise their own property tax rates. Yes, it's coming. If you attend the Finance Committee meetings, you can already here talk of it. Oh sure, there will be talk of deficit reduction, but the real plan in the end will be to ask the taxpayers for more money (it seems like this is always the plan whether the government body be federal, state, or, in this case, local).
Well, regardless of the outcome of a possible future referendum, Minooka CCSD 201 tax rates are already set to rise. Why? Because of the current bonded indebtedness of the school district and the slow growth (and, in some recent years, decreases) in equalized assessed valuation (EAV). You see, when the school district issued the bonds to build the two new schools (Jones and Minooka Intermediate School), add on to Minooka Elementary School and renovate what is now the Minooka Primary Center, the district and its financial advisors projected that the EAV of property within the school district would increase at a rate of 8% per year for the next twenty years. As it turns out, this was a "pie in the sky" projection. Perhaps this was another instance of "normalcy bias" since the EAV had been growing at such a rate during the housing bubble. Perhaps this was done because it made the resulting bond and interest tax rate appear to remain stable throughout the payback period of the bonds. In either case, projecting such a growth rate to continue for that time period was, at best, wishful thinking.
Unfortunately, reality intervened, the housing bubble burst and the EAV did not continue to grow at the projected rates. In fact, in each of the last few years, the EAV has dropped. As a result, the bond and interest tax rate (only one component of the total tax rate of the school district) must increase in order to compensate. The school district's financial advisors recently issued a new chart of the Minooka CCSD 201 current bond and interest payments based on a revised projection of a 2% EAV growth rate. Even this may be optimistic, since the EAV is projected to drop again next year and may remain flat for a few years after that.
What this means is that, even assuming that the tax rates for the other funds remain the same, the district's total tax rate will increase each and every year for the foreseeable future. This increase will occur automatically since by law the district must levy sufficient funds in the bond and interest fund to pay the then current principal and interest payments on the bonds each year. Based on the projected bond and interest tax rates, the projected implied total tax rates (assuming tax rates for the other funds remain the same) are as follows:
Well, regardless of the outcome of a possible future referendum, Minooka CCSD 201 tax rates are already set to rise. Why? Because of the current bonded indebtedness of the school district and the slow growth (and, in some recent years, decreases) in equalized assessed valuation (EAV). You see, when the school district issued the bonds to build the two new schools (Jones and Minooka Intermediate School), add on to Minooka Elementary School and renovate what is now the Minooka Primary Center, the district and its financial advisors projected that the EAV of property within the school district would increase at a rate of 8% per year for the next twenty years. As it turns out, this was a "pie in the sky" projection. Perhaps this was another instance of "normalcy bias" since the EAV had been growing at such a rate during the housing bubble. Perhaps this was done because it made the resulting bond and interest tax rate appear to remain stable throughout the payback period of the bonds. In either case, projecting such a growth rate to continue for that time period was, at best, wishful thinking.
Unfortunately, reality intervened, the housing bubble burst and the EAV did not continue to grow at the projected rates. In fact, in each of the last few years, the EAV has dropped. As a result, the bond and interest tax rate (only one component of the total tax rate of the school district) must increase in order to compensate. The school district's financial advisors recently issued a new chart of the Minooka CCSD 201 current bond and interest payments based on a revised projection of a 2% EAV growth rate. Even this may be optimistic, since the EAV is projected to drop again next year and may remain flat for a few years after that.
What this means is that, even assuming that the tax rates for the other funds remain the same, the district's total tax rate will increase each and every year for the foreseeable future. This increase will occur automatically since by law the district must levy sufficient funds in the bond and interest fund to pay the then current principal and interest payments on the bonds each year. Based on the projected bond and interest tax rates, the projected implied total tax rates (assuming tax rates for the other funds remain the same) are as follows:
| Fiscal Year | B&I Tax Rate | Implied Total Tax Rate |
| 2013 | 0.5306% | 2.9630% |
| 2014 | 0.5686% | 3.0010% |
| 2015 | 0.5993% | 3.0317% |
| 2016 | 0.6366% | 3.0690% |
| 2017 | 0.6741% | 3.1065% |
| 2018 | 0.7152% | 3.1476% |
| 2019 | 0.7653% | 3.1977% |
| 2020 | 0.8094% | 3.2418% |
| 2021 | 0.8568% | 3.2892% |
| 2022 | 0.9074% | 3.3398% |
| 2023 | 0.9539% | 3.3863% |
| 2024 | 1.0061% | 3.4385% |
| 2025 | 1.0739% | 3.5063% |
| 2026 | 1.1340% | 3.5664% |
| 2027 | 1.2108% | 3.6432% |
| 2028 | 1.2927% | 3.7251% |
| 2029 | 1.0661% | 3.4985% |
Monday, December 3, 2012
Next Minooka 201 Finance Committee Meeting
The next meeting of the Minooka CCSD 201 Finance Committee will be Wednesday, December 5, 2012. The Finance Committee meeting starts at
6:00 p.m. in
the board room (the old library) at the Minooka Primary Center located
at 305 Church Street in Minooka. Finance Committee meetings are open to
the public, so everyone is welcome to attend. The Finance Committee will
be discussing a
new deficit reduction plan to further address our operating deficit.
So, if you want your voice heard during the process, you may want to
attend the Finance Committee meeting. The agenda for the meeting is available here.
As an informational reminder, here is a link to the Minooka CCSD 201 budget for fiscal year 2012-2013, as well as a link to a previous post regarding the financial projections which were presented to the Finance Committee this past January. We now know that the EAV (the property value upon which property taxes are based) in the district fell by roughly 8% in 2011, whereas the projections had assumed that the EAV would be stable. Therefore, updated projections would reflect a bleaker local revenue picture than previously projected.
There are really only two courses of action open to the school district. The first course of action is to make the needed cuts in order to bring our spending into line with our realistic revenues under the current property tax rates. The sooner these cuts are made, the smaller the cuts will need to be since their effects would be compounded over time. If the district were going to opt for this course of action, what would be needed would be a complete top to bottom review of the district budget. Every dollar that is being spent would be questioned. Every opportunity to save money would be explored. The current deficit is approximately 5% of the total budget. Which means that for every dollar that the school district spends, it would have to find a way to save 5 cents. The second course of action is to refuse to make the needed cuts (or make largely symbolic cuts) and hope that the voters in the district will vote in favor of a referendum to raise their tax rates. Of course, if the voters vote down the referendum, then the school board and the school district will be faced with making drastic cuts quickly. If this is the situation that we find ourselves in a few years from now, it will not be the fault of the voters but rather the fault of the school board.
As an informational reminder, here is a link to the Minooka CCSD 201 budget for fiscal year 2012-2013, as well as a link to a previous post regarding the financial projections which were presented to the Finance Committee this past January. We now know that the EAV (the property value upon which property taxes are based) in the district fell by roughly 8% in 2011, whereas the projections had assumed that the EAV would be stable. Therefore, updated projections would reflect a bleaker local revenue picture than previously projected.
There are really only two courses of action open to the school district. The first course of action is to make the needed cuts in order to bring our spending into line with our realistic revenues under the current property tax rates. The sooner these cuts are made, the smaller the cuts will need to be since their effects would be compounded over time. If the district were going to opt for this course of action, what would be needed would be a complete top to bottom review of the district budget. Every dollar that is being spent would be questioned. Every opportunity to save money would be explored. The current deficit is approximately 5% of the total budget. Which means that for every dollar that the school district spends, it would have to find a way to save 5 cents. The second course of action is to refuse to make the needed cuts (or make largely symbolic cuts) and hope that the voters in the district will vote in favor of a referendum to raise their tax rates. Of course, if the voters vote down the referendum, then the school board and the school district will be faced with making drastic cuts quickly. If this is the situation that we find ourselves in a few years from now, it will not be the fault of the voters but rather the fault of the school board.
Friday, May 4, 2012
Risk Management Plans: Legitimate Policy or End Run Around Tax Caps
At the last meeting of the Minooka CCSD 201 school board, the superintendent presented a new Risk Management Plan for the district (see here). So what is a risk management plan? Is it a legitimate policy tool to reduce the risk associated with running our schools or is it an attempt at an end around the tax caps placed on certain funds in the school district's budget (or is it a combination of the two)? And why is this coming up now?
To answer these questions, you have to know a little bit about school finance and how an Illinois school district raises revenue. You also have to understand that our school district raises the overwhelming majority of its funds (80 to 90%) through local property taxes. Now, if you own property in the district, you get a property tax bill every year which includes an entry that shows the tax rate for Minooka CCSD 201. For example, that tax rate for last year (if you lived in Grundy County) was 2.95428 (this is the number you get when you add the rate for "Minooka Grade 201", which was 2.87206 with the rate for "Social Security" listed just below "Minooka Grade 201", which was 0.08222). Well, this one number really consists of a combination of tax rates for each of the various categories of spending that the district has. You can think of these as buckets. The buckets are labeled: education; operations, building and maintenance; transportation; working cash; municipal retirement; social security; tort immunity; special education; fire prevention and safety; lease purchase; and bond and interest. Now some of these buckets (or categories) have rate limits that are set by law and can only be increased by the voters of the district pursuant to a referendum. Others do not have limits that are set by law. The categories and their limits for Minooka CCSD 201 are as follows (the rates are per $100 of equalized assessed value):
Education: 1.62
Operations, building and maintenance: 0.25
Transportation: 0.12
Working cash: 0.05
Municipal retirement: none
Social security: none
Tort immunity: none
Special education: 0.02
Fire prevention and safety: 0.05
Lease purchase: 0.05
Bond and interest: none
You will notice that the funds that do not have tax caps are municipal retirement, social security, tort immunity and bond and interest. The amounts levied for municipal retirement and social security are merely a function of the school district's payroll and so there is not much here to play with. The amounts levied for bond and interest are a function of the school district's current indebtedness. The county clerks are required to levy enough in the bond and interest category to pay the current principal and interest payments on the school district's debt. Since the amount of this debt is limited by statute and the debt typically can only be issued pursuant to a referendum of the voters (but see my post on the Back Door Referendum), the amount levied for this fund is subject to certain controls. You may notice if you look at one of the levies approved by the school board, that the school board does not set a levy amount for this fund.
That leaves the tort immunity fund. Now, the purpose of the tort immunity fund is two-fold. The first is reactive and the second is proactive. The reactive part is to allow the school district to raise money to pay tort claims for which it becomes subject pursuant to a judgment as a result of a lawsuit. The proactive part is to allow the school district to raise money to pay for insurance to cover such tort claims and to pay for risk management activities to decrease the chances of such tort claims in the future.
There is, however, a potential for abusing the tort immunity fund as a way to raise revenue that is more properly categorized under one of the other funds and therefore create an end run around the statutory tax caps. This has been documented by commentators (here and here), as well as being remarked upon by the Illinois legislature itself ("Notwithstanding the extraordinary nature of the [tort immunity tax] . . . it has become apparent that some units of local government are using the tax revenue to fund expenses more properly paid from general operating funds." 745 Illinois Compiled Statutes 10/9-107).
At the end of the day, as long as a school district is raising revenue in the tort immunity fund in accordance with the letter and spirit of the law, the school district should not have any problem. However, if the school district is using the tort immunity fund to pay for items that really should be paid for with another fund, then the school district has a problem. A taxpayer has the right to sue the school district for return of the improperly levied funds. Now, you might think that the likelihood of recovery on a lawsuit of this nature is slim. But there have been some high-profile cases in which taxpayers have won and forced the school district in question to return the improperly levied funds. (See here and here). Notably, the Illinois State Board of Education has even cautioned school districts about their use of tort immunity levies in the wake of the Freeport and Quincy cases (see here).
So, why is this topic coming up now here at Minooka CCSD 201? Well, probably because the school district is levying taxes at the maximum rate in each of the funds that has a rate limit. In addition, the district is currently operating at a deficit with more deficits as far as the eye can see. Faced with that situation, what is a district likely to do?
To answer these questions, you have to know a little bit about school finance and how an Illinois school district raises revenue. You also have to understand that our school district raises the overwhelming majority of its funds (80 to 90%) through local property taxes. Now, if you own property in the district, you get a property tax bill every year which includes an entry that shows the tax rate for Minooka CCSD 201. For example, that tax rate for last year (if you lived in Grundy County) was 2.95428 (this is the number you get when you add the rate for "Minooka Grade 201", which was 2.87206 with the rate for "Social Security" listed just below "Minooka Grade 201", which was 0.08222). Well, this one number really consists of a combination of tax rates for each of the various categories of spending that the district has. You can think of these as buckets. The buckets are labeled: education; operations, building and maintenance; transportation; working cash; municipal retirement; social security; tort immunity; special education; fire prevention and safety; lease purchase; and bond and interest. Now some of these buckets (or categories) have rate limits that are set by law and can only be increased by the voters of the district pursuant to a referendum. Others do not have limits that are set by law. The categories and their limits for Minooka CCSD 201 are as follows (the rates are per $100 of equalized assessed value):
Education: 1.62
Operations, building and maintenance: 0.25
Transportation: 0.12
Working cash: 0.05
Municipal retirement: none
Social security: none
Tort immunity: none
Special education: 0.02
Fire prevention and safety: 0.05
Lease purchase: 0.05
Bond and interest: none
You will notice that the funds that do not have tax caps are municipal retirement, social security, tort immunity and bond and interest. The amounts levied for municipal retirement and social security are merely a function of the school district's payroll and so there is not much here to play with. The amounts levied for bond and interest are a function of the school district's current indebtedness. The county clerks are required to levy enough in the bond and interest category to pay the current principal and interest payments on the school district's debt. Since the amount of this debt is limited by statute and the debt typically can only be issued pursuant to a referendum of the voters (but see my post on the Back Door Referendum), the amount levied for this fund is subject to certain controls. You may notice if you look at one of the levies approved by the school board, that the school board does not set a levy amount for this fund.
That leaves the tort immunity fund. Now, the purpose of the tort immunity fund is two-fold. The first is reactive and the second is proactive. The reactive part is to allow the school district to raise money to pay tort claims for which it becomes subject pursuant to a judgment as a result of a lawsuit. The proactive part is to allow the school district to raise money to pay for insurance to cover such tort claims and to pay for risk management activities to decrease the chances of such tort claims in the future.
There is, however, a potential for abusing the tort immunity fund as a way to raise revenue that is more properly categorized under one of the other funds and therefore create an end run around the statutory tax caps. This has been documented by commentators (here and here), as well as being remarked upon by the Illinois legislature itself ("Notwithstanding the extraordinary nature of the [tort immunity tax] . . . it has become apparent that some units of local government are using the tax revenue to fund expenses more properly paid from general operating funds." 745 Illinois Compiled Statutes 10/9-107).
At the end of the day, as long as a school district is raising revenue in the tort immunity fund in accordance with the letter and spirit of the law, the school district should not have any problem. However, if the school district is using the tort immunity fund to pay for items that really should be paid for with another fund, then the school district has a problem. A taxpayer has the right to sue the school district for return of the improperly levied funds. Now, you might think that the likelihood of recovery on a lawsuit of this nature is slim. But there have been some high-profile cases in which taxpayers have won and forced the school district in question to return the improperly levied funds. (See here and here). Notably, the Illinois State Board of Education has even cautioned school districts about their use of tort immunity levies in the wake of the Freeport and Quincy cases (see here).
So, why is this topic coming up now here at Minooka CCSD 201? Well, probably because the school district is levying taxes at the maximum rate in each of the funds that has a rate limit. In addition, the district is currently operating at a deficit with more deficits as far as the eye can see. Faced with that situation, what is a district likely to do?
Friday, January 20, 2012
Link to Updated Financial Projections for Minooka CCSD 201
Click here for a link to the updated financial projections which Mr. Gegenheimer presented to the Finance Committee on January 19, 2012. I encourage you to review this presentation. Pay particular attention to pages 12 and 18 of the slide show. Page 18 shows the deficits that Minooka CCSD 201 will run in the future unless we adopt additional deficit reduction measures. Page 12 shows the significant assumptions that were used to produce the projections. You should note in particular assumptions numbered 1,2 and 9. Assumption number 1 is what is, in large part, driving the deficit problem. The assumption states that our costs will increase at roughly 3% per year. Now 3% does not seem like a lot. However, 3% per year is a description of what in math is called an "exponential function." The interesting thing about exponential functions, as any math teacher can tell you, is that the quantity described by any exponential function where the growth rate is greater than 1 (such as here where the rate of growth is 1.03 per year or 3% growth per year) grows at an ever-increasing rate due to the "magic" of compounding. Click here for a graph of an exponential function, and you can visualize what I mean. This phenonmenon of exponential growth in expenses is what is bankrupting our federal, state and local governments. It comes down to a failure to control costs. Without aggressively controlling costs, the only way to stave off deficits and eventual bankruptcy is to continually increase taxes. This, of course, shifts the problem with the exponential function to the taxpayer and merely delays the inevitable, since there is only so much the taxpayer is willing or able to pay (and we should recognize that those industrial and commercial taxpayers who ostensibly don't get to vote in our elections for school board or our referenda do have the ability and willingness to "vote with their feet" and leave a district where taxes become too high for them to bear or significantly higher than other districts where they might locate). Now, while our district has a deficit problem, we do not yet have operating debt (as opposed to debt from capital improvements) nor are we anywhere close to bankruptcy. This does not mean, however, that we should not aggressively attack our deficit problem by controlling costs. On the contrary, it is precisely now that we should be making cuts, since smaller cuts now will preclude the need for larger cuts later. Assumption number 2 states that the district's equalized assessed valuation (EAV) will remain flat for three years then grow at a rate of 3% per year. The problem with this assumption is that it likely paints an unrealistic picture of the future. EAVs in Illinois are based on the market values in the prior three years, so the 2011 EAV is based on market values for 2008, 2009 and 2010. Real estate market values continued to drop throughout 2011 (as most of us know all too well) and this drop is not yet reflected in the district's EAV. The 2012 EAV will most likely be another 3 to 4 percent lower than the 2011 EAV. Even if real estate values stabilize in 2012, the 2011 decrease is not reflected in the projections. Assumption number 9 states that there will be a gradual increase in the total tax rate after the 2011 levy. There are a couple of problems with this assumption. First, this would require successive votes of the school board in each of these years. Second, without this assumption, the financial projections would be worse than what has been presented. I have asked for this assumption to be removed and the projections to be revised. I will post them as soon as they are available.
Click here for a link to the Finance Committee page on the district's website. The meetings of the Finance Committee are open to the public, and everyone is welcome to attend.
Click here for a link to the Finance Committee page on the district's website. The meetings of the Finance Committee are open to the public, and everyone is welcome to attend.
Saturday, November 12, 2011
Next Minooka 201 School Board Meeting and Finance Committee Meeting
The next meeting of the Minooka CCSD 201 school board is Wednesday, November 16, 2011. The Committee of the Whole Meeting starts at 6:00 p.m. in the board room (the old library) at the Minooka Primary Center located at 305 Church Street in Minooka. The Committee of the Whole Meeting will be followed by the regular Board Meeting at 7 p.m. Please be sure to mark your calendars. You can find the agenda for each of the meetings here.
Also, there will be a meeting of the Minooka CCSD 201 Finance Committee on Tuesday, November 15, 2011 (the day before the school board meeting). The Finance Committee meeting starts at 6:00 p.m. in the board room (the old library) at the Minooka Primary Center located at 305 Church Street in Minooka. If you want to have some input into the Minooka CCSD 201 finances, you may want to attend this meeting. You can at least get some information about when and by what amount the school board will eventually seek to raise your property taxes. It may not be this year or next year, but you can be assured that in the next few years the school board will seek, either by a rate hike referendum or a "back door referendum," to raise property tax rates. (For an explanation of a "back door referendum" see here.)
Also, there will be a meeting of the Minooka CCSD 201 Finance Committee on Tuesday, November 15, 2011 (the day before the school board meeting). The Finance Committee meeting starts at 6:00 p.m. in the board room (the old library) at the Minooka Primary Center located at 305 Church Street in Minooka. If you want to have some input into the Minooka CCSD 201 finances, you may want to attend this meeting. You can at least get some information about when and by what amount the school board will eventually seek to raise your property taxes. It may not be this year or next year, but you can be assured that in the next few years the school board will seek, either by a rate hike referendum or a "back door referendum," to raise property tax rates. (For an explanation of a "back door referendum" see here.)
Monday, October 24, 2011
Is Rhode Island the "Canary in the Coal Mine"?
The problem of state and municipal pensions is something that has been building for decades. Years of over-promising and under-funding created the problem. But the burst of the housing bubble, the financial crisis of 2008 and the subsequent three years of little to no growth and high unemployment have brought the problem into sharp focus. When the economic tide was rising, many of the problems could be hidden and politicians and the public could engage in the ever popular game of denial called "kicking the can down the road." Now that the tide has gone out, it is becoming clear who was swimming without any pants. This crisis will lead many municipalities to declare bankruptcy in order to get out from under the crushing burden of their pensions. States will face a similar crisis, but since they currently can not declare bankruptcy, they will deal with the problem in other ways. Rhode Island seems to be further along in the process than some other states. However, many other states, including Illinois will face similar problems (to understand the scope of the problem, click here). Illinois has already enagaged in one round of pension reform. It is likely many other rounds will follow.
What does this have to do with schools you may ask? Plenty. You see, many states, such as Illinois, will be forced with the choice of cutting back on its pension promises or cutting back on funding for current services such as education. The reason is simple. The state legislature will realize (hopefully soon) that raising taxes is not the answer, since it will lead to capital and human flight from the state to "greener pastures." The most recent Illinois state income tax increase has already contributed to this process. Such capital and human flight reduces the tax base in Illinois thereby leading to lower tax revenues than anticipated (indeed it is possible that such rate increases could lead to lower tax revenues than previously collected under the lower rate). Further tax rate increases have a similar effect, leading into a self-reinforcing cycle of economic destruction. Many states and municipalities have already learned this lesson the hard way (see here and here). (Economics teaches that human beings respond more or less rationally to incentives and change their behavior in response. Even journalists understand it.)
How will this affect Minooka 201 taxpayers? Well, I expect that more of the burden of funding education will be shifted from the state to the local taxpayer. Currently, the state of Illinois provides 15% of our education fund revenue (approximately $4 million) and 67% of our transportation fund revenue (approximately $1.7 million). If the state decreases its contribution, then we will be faced with the following dilemma: the school board with either have to increase the tax levy on local taxpayers or cut expenditures to offset the decreased state funding (or some combination of the two). Bear in mind that if the school board seeks to raise the levy on the local taxpayers, a similar process to the one described at the state level is likely to occur at the local level. As the levy is raised, this will tend to induce capital and human flight out of the school district (businesses and people, after all, have a choice in terms of where to locate, and some will not be able to afford the increased taxes). In essence, the state will have kicked some of their problem "downstairs" to the school district. (They may, of course, kick some of their problem to the municipalities as well.) Another option, and the one that I recommend, will be to do what many private businesses have done in this economic crisis . . . find ways to deliver the same quality product or service at lower cost. This, of course, is easier to say than to implement.
These budget problems at the state and local (and federal) level are not going away any time soon. These issues are going to be with us for many years to come. The game of "kicking the can down the road" is no longer an option.
What does this have to do with schools you may ask? Plenty. You see, many states, such as Illinois, will be forced with the choice of cutting back on its pension promises or cutting back on funding for current services such as education. The reason is simple. The state legislature will realize (hopefully soon) that raising taxes is not the answer, since it will lead to capital and human flight from the state to "greener pastures." The most recent Illinois state income tax increase has already contributed to this process. Such capital and human flight reduces the tax base in Illinois thereby leading to lower tax revenues than anticipated (indeed it is possible that such rate increases could lead to lower tax revenues than previously collected under the lower rate). Further tax rate increases have a similar effect, leading into a self-reinforcing cycle of economic destruction. Many states and municipalities have already learned this lesson the hard way (see here and here). (Economics teaches that human beings respond more or less rationally to incentives and change their behavior in response. Even journalists understand it.)
How will this affect Minooka 201 taxpayers? Well, I expect that more of the burden of funding education will be shifted from the state to the local taxpayer. Currently, the state of Illinois provides 15% of our education fund revenue (approximately $4 million) and 67% of our transportation fund revenue (approximately $1.7 million). If the state decreases its contribution, then we will be faced with the following dilemma: the school board with either have to increase the tax levy on local taxpayers or cut expenditures to offset the decreased state funding (or some combination of the two). Bear in mind that if the school board seeks to raise the levy on the local taxpayers, a similar process to the one described at the state level is likely to occur at the local level. As the levy is raised, this will tend to induce capital and human flight out of the school district (businesses and people, after all, have a choice in terms of where to locate, and some will not be able to afford the increased taxes). In essence, the state will have kicked some of their problem "downstairs" to the school district. (They may, of course, kick some of their problem to the municipalities as well.) Another option, and the one that I recommend, will be to do what many private businesses have done in this economic crisis . . . find ways to deliver the same quality product or service at lower cost. This, of course, is easier to say than to implement.
These budget problems at the state and local (and federal) level are not going away any time soon. These issues are going to be with us for many years to come. The game of "kicking the can down the road" is no longer an option.
Saturday, December 11, 2010
Link to Agenda for December 15, 2010 Board Meeting
The next meeting of the Minooka CCSD 201 school board will take place this Wednesday, December 15, 2010. Click here to be taken to the agendas for the Committee of the Whole Meeting, the Truth in Taxation Hearing and the regular Board Meeting. The Committee of the Whole Meeting starts at 6:00 p.m. in the board room (the old library) at the Minooka Primary Center located at 305 Church Street in Minooka. The Truth in Taxation Hearing regarding the 2010 tax levy starts at 6:45 p.m. in the gymnasium at the Minooka Primary Center. The Truth in Taxation Hearing will be followed by the regular Board Meeting. Each of the meetings is open to the public and everyone is welcome and encouraged to attend.
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