Budgets, Levies, & Debt

The Numbers Behind The Geneva School District Tax Levy-2012

Bob McQuillan
November 21, 2012 

Based on what has been released to date, I believe that the board did an excellent job of representing the best interests of the taxpayers during the recent teacher agreement talks. I believe the board listened to comments from the community and balanced that with the financial situation of the District. That being said, we all need to realize that the community has many challenges to face over the next several years. The board members take an oath to be good financial stewards of the District and taxpayers’ assets. It is the community’s responsibility to share their opinions with the board. This interaction allows the board to evaluate all options and make decisions that benefit the entire community. The administration works for the board and ultimately the board is responsible to the residents through the election process. In my opinion, disagreeing with the board in no way reflects on the overall job that they are doing. Since 70% of local property taxes go to the school district, everyone has a stake in how our money is spent.

At the November 12, 2012, Geneva Board of Education meeting, the board approved a resolution requesting a 1.5% tax levy for 2012. Many people, even some that attended the meeting, believe that a 1.5% tax levy was approved. It wasn’t, only a resolution was approved. The tax levy is scheduled to be voted on at the December 10th meeting. https://www.geneva304.org/d304_finances/documents/2012_11.12_Tax_Levy_Presentation.pdf

The tax levy determines the amount of revenue the District will receive from property taxes in June and September 2013.

Why the board should consider a 0% tax levy

  1. The William Blair & Co. projections of an EAV turn around by 2015 is not going to happen. There is no reason to believe that starting in 2014 the EAV will increase .95% and then continue a positive growth of 4.0% through 2031. Assessments are based on a three-year rolling average. It is impossible for the EAV to grow almost 1% when it has decreased 6% and 2% the last two years. The numbers just don’t work out for a positive trend in two years. See page 4 of the linked presentation. https://www.geneva304.org/d304_finances/documents/Presentation_October_22_2012.pdf Based on the school reports published by the Illinois State Board of Education, enrollment in Geneva has declined by at least 124 students since the 2008-09 school year. If this trend continues, there should be a decrease in the operating budget.
  2. The debt service payment will increase by $1.4 million to a total of $17.3 million in 2013. This amount is not included in the tax levy and is collected separately through school property taxes.
  3. The 2012-13 school year budget had operating revenues of $61.3 million. There is a projected $3 million surplus in the education fund and a planned $7 million deficit in the operations & maintenance and transportation fund. The $4 million will be taken from the reserves.
  4. Every option presented to the board projected revenues above last year’s $61.3 million. The revenue ranged from $64.3 million at 3% to $63.4 million at 1.5%. If a 0% levy is approved, the projected revenue is $62.5 million. That is $1.2 million more than received this year. Keep in mind that, without the capital expenses, there was a $3 million surplus this year. Why does the board need more money next year if they did not spend all their revenue this year? Please review the tax levy presentation https://www.geneva304.org/d304_finances/documents/2012_11.12_Tax_Levy_Presentation.pdf
  5. The $901,500 in “cuts” mentioned with a 1.5% levy aren’t cuts at all. The 900k is the difference from the maximum amount received with a 3% level vs. a 1.5% levy ($64.3 - $63.4 million). A 3% levy would actually generate $3 million more than this year.
  6. This may be the last year that the board can approve a 0% tax levy. If EAV continues to decline, there will be a smaller base number to start with. It might not be possible to reduce expenses enough to avoid a tax levy increase. Also, four board seats are open in April 2013. Based on the election results, there may be a new majority on the board.
  7. The board projects a $57 million reserve fund as of June 30, 2013. Should there be unexpected expenses next year; reserve funds can cover any cost.
  8. The board should be reviewing all expenses with the intent to reduce overall expenses. In this economic environment, the emphasis should be on reducing expenses not on getting excess revenue.

For the reasons listed above, the board of education should consider a 0% tax levy for 2012.

For those interested in learning more about how the tax levy is calculated, GenevaTaxFACTS is sponsoring two forums this week. The tax levy will be discussed step by step and you will have the opportunity to ask questions. The meetings will be held this Wednesday, November 21st, at 7:30 pm and Saturday, November 24th, at 9:30 am. If interested, please send an e-mail to bobm@genevataxfacts.org and I will forward the details. All are welcome to attend.

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