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Questions About the Tax Levy

On November 8, 2006, District 200 held a public hearing to discuss a proposed 15.51% increase in its tax levy. The hearing examined the implications of this increase and the effects of tax caps, which limit the amount of tax revenue that can be collected despite rising property values. While tax revenues have grown faster than inflation, questions remain about whether the district truly needs such an increase. The community is encouraged to engage in this discussion to understand the real financial needs of the district and what it means for taxpayers.

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Questions About the Tax Levy

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  1. Questions About the Tax Levy Mark O. Stern Community Unit School District 200 Public Hearing November 8, 2006 How Much is Enough?

  2. District 200 is proposing a 15.51% increase in its tax levy. • Property tax levies may seem confusing – what does this really mean to you? How Much is Enough?

  3. District 200 is proposing a 15.51% increase in its tax levy. • What is the real impact of tax caps? • Does the tax levy bear any relationship to the District’s actual revenue needs? How Much is Enough?

  4. Tax caps limit what the District can actually collect. • Before tax caps, a fixed tax rate was applied to property values. • As property values skyrocketed – often by double digits – so did your tax bill. • Without tax caps, in the last 5 years alone, your bill would have increased 36% - even though inflation was only 9.5%. How Much is Enough?

  5. Tax caps have allowed District revenue to grow faster than inflation. • Tax caps look not at the tax rate, but at the amount of tax collected. • In the last 5 years, tax caps have allowed the District to increase taxes at the inflation rate PLUS about 1.2% each year. • Tax collections are up about 15% versus inflation of 9.5% - more than 50% above the inflation rate. How Much is Enough?

  6. “Let us catch up.” • Even though tax revenues have grown 50% faster than inflation, some say that’s not enough. • Some administrators and Board members say “we aren’t allowed to tax at the ‘voter approved rate.’” • They say, “just give us one year to ‘catch up’ at the pre-cap tax rate.” • What would this mean for taxpayers? How Much is Enough?

  7. Tax Caps2001-2005 • Yellow Line: Rate of Inflation • Pink Line: Increase in actual taxes (faster than inflation) • Blue Line: Increase in your taxes without tax caps, if the Board levied at the “voter approved rate” How Much is Enough?

  8. $90 Million More Taxes in just 5 years? • District 200’s “maximum” tax rate is 4.611 (excluding bonds). • If this rate had been applied, without tax caps, for the last 5 years, taxpayers would have paid over $90 MILLION in additional taxes due to higher property value. • A one year “catch up” would mean your total 2005 property tax bill would have been over 17% higher! How Much is Enough?

  9. So, does the District really need a 15.51% increase? • I can’t answer this question. How Much is Enough?

  10. So, does the District really need a 15.51% increase? • The District does not really tell us how much money it needs. • Instead, it raises taxes to the maximum so it does not “leave money on the table.” • This does not give residents a clear picture of school finances. How Much is Enough?

  11. Would the Board have collected all that money? • We don’t know if the Board would have taxed us an extra $90 million. • The Board budgets based on “collecting every possible tax dollar” instead of based on need. • This is not a financial strategy – it focuses on what the Board CAN do instead of what it OUGHT to do. How Much is Enough?

  12. Let’s be realistic. • If the Board thinks its spending needs far exceed tax revenue –every year – tell the community how much and why. How Much is Enough?

  13. Let’s be realistic. • Before entering into major obligations – like a teacher contract – tell us what they’ll cost, and have a plan in place to pay for them. How Much is Enough?

  14. Thank you for your time. • I’m Mark O. Stern and I approved this message. • Find out more at www.markostern.com • I used data available on District web site (tax levy presentation). How Much is Enough?

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