Could a property tax rebate be coming to residential taxpayers in Riverside Elementary School District 96 next year? Perhaps.
Last week the District 96 school board authorized David Sellers, the district’s interim director of finance and operations, to work with the district’s law firm to see exactly how such a program might work.
Late last fall, Sellers presented the framework of a tax rebate program for the board to consider as it was preparing to vote on the annual property tax levy. Sellers said if the board wanted to reduce the district’s fund balance and give property taxpayers a break, a tax rebate would be preferable to freezing the levy.
A rebate, unlike a flat or reduced levy, does not permanently impair the district’s tax base. Sellers was not endorsing a rebate. He just presented it as an option for board members to consider if they wanted to reduce the tax burden.
At the time, the school board decided not to pursue the idea. But now, with school board elections less than two months away, the two board members running for election, Juliet Boyd and Rich Regan, asked that the tax rebate proposal be placed on the agenda for last week’s school board meeting as a topic to be discussed.
Under the plan Sellers came up with last fall, and repeated last week, homeowners who have paid property taxes in District 96 for three consecutive years under the same name and at the same location would qualify for a rebate of from $80 to $120 from their District 96 tax bill.
Owners of a home whose overall property taxes are less than $5,000 would receive an $80 rebate. Those with a property tax bill of between $5,000 and $10,000 would receive a $100 rebate, while those whose property taxes are more than $10,000 would receive a $120 rebate.
Only owners of residential property would qualify for the rebate. Commercial and industrial landowners would not be eligible for a rebate.
Sellers estimated that such a rebate would cost the district about $425,000.
“I think the board needs to do a gut check as to how much money can be put aside for this purpose,” Sellers said.
Sellers said he was worried about the possibility of the state of Illinois switching the employer portion of the cost of teacher pensions on to local districts.
Currently, District 96 is in a very strong financial position with nearly $21 million, or 84 percent of annual expenditures, in operating fund reserves. The district’s education fund, which pays for day-to-day operations, has a little more than $13 million in reserves, which is 64.8 percent of annual operating expenses.
Sellers said bond rating agencies generally award coveted Triple-A ratings to districts that have reserves of at least 50 percent of annual spending.
Last year the school board transferred $7.6 million from its education fund to its debt service fund to cover the cost of paying off debt certificates issued to pay for the renovations that were done on all the district’s schools in 2012 and 2013. This was done to provide a more accurate view of the district’s financial condition.
Given the healthy current fund balances, Boyd said in an interview that she is inclined to support a tax rebate.
“Our property taxes are really high,” Boyd said. “They’re exceedingly high. I think that our bank accounts can come down some without it impacting our Triple-A rating.”
At last week’s meeting, Regan did not commit to supporting a rebate, but he wanted the administration to further look into such a program.
“I think it’s worthy of a deeper look at this point,” Regan said. “It could be a valuable tool to have when the conditions are appropriate.”
Board member Rachael Marrello said that she would like to see a larger rebate. At the next meeting of the school board’s finance committee, a doubling of the rebate will be discussed.
Randy Brockway expressed reluctance to support a rebate.
“I don’t like the fact that we would be the first district in Illinois to invent this tax program,” Brockway said.
Sellers estimated it would cost about $18,000 to administer a rebate program.
Boyd said she didn’t favor going forward with the rebate idea last fall because she didn’t have enough information about the 2015-16 budget. Now as that information is being developed she wants to revisit the issue.
“As we’re getting this additional information from David, we’re just saying, ‘Hey, just look at this again,'” Boyd said.