Fearing that the Illinois General Assembly will enact a tax-cap proposal that would require voter approval for nearly all bond issues, governments in suburban Cook County already are speeding up plans to issue bonds in case the measure becomes law.
During the first 16 days of October, suburban governments approved as many bond issues as were filed in both October 1989 and October 1990, according to county records and interviews with officials representing parks, schools and other taxing bodies.
While the Cook County numbers are relatively small, they could signal the beginning of a bond rush similar to one in the collar counties, where taxing bodies filed bond issues totaling about $1 billion by Oct. 1, a 60 percent increase over all of 1990.
But, a move by Republicans to enact a Cook County property-tax cap suffered a setback in the Illinois Senate Tuesday when a vote to bring the measure before the full Senate failed.
Senate Democrats said they would prepare their own plan to deal with the tax-cap issue at the same time that House Speaker Michael Madigan (D-Chicago) softened his opposition to the cap.
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The cap would limit annual increases in tax collections by most governments in Cook County to 5 percent or the rate of inflation, whichever is less. The cap also would restrict most borrowing unless approved by voters.
As part of a state budget deal in July that extended the income tax surcharge, a tax cap was passed for the collar counties-Du Page, Lake, Will, Kane and McHenry-but Cook County was exempted because of opposition from Democratic leaders.
At least 23 bond issues, worth about $23 million, were approved in the first 16 days of October, according to Cook County records and interviews with local officials. In contrast, 13 bond issues worth about $32 million were approved by Cook County governments in October of last year.
In October 1989, Cook County governments authorized the sale of just 10 bond issues worth a total of $15.8 million.
”They`re going crazy,” said a county official, who asked not to be identified. He said there has been a substantial increase in the number of bonds filed over a normal October.
Some local officials said the bonds were approved to beat the anticipated cap. Most said the sales had been planned long before lawmakers started talking this summer about a property tax lid in Cook County. The anticipated legislation, they said, accelerated their plans.
In the south suburbs, for example, the board of Thornton Fractional Township High School District 215 which covers parts of Burnham, Calumet City, Lansing and Lynwood, approved a $500,000 bond issue last week for fixing leaking roofs and making other repairs to school buildings.
”If (the General Assembly) should pass something like what they did in the collar counties, we would have been sitting here with leaking roofs and no way to get the money,” said Gary Epperson, business manager for the district. ”We were going to do this anyway,” Epperson added, ”but basically we moved it up six months.”
In the northwest suburbs, the Des Plaines Park District had planned a $2.21 million bond issue in February to help finance development of a 42-acre park. Instead, the board approved the plan last week.
”We accelerated the sale four months,” said David Markworth, the district`s director. ”What we were trying to do is protect a project that was already under construction. Had it (a tax cap) gone into effect, we would have been left short on the project.”
For some taxpayers in Cook County, this new rush could mean property tax hikes will come sooner than anticipated.
But while taxpayers aren`t likely to find much to cheer about as the bonds are rushed into the market, some experts say the rush may actually save taxpayers money. With interest rates at their lowest point in years, some bond experts say bonds sold now could cost local governments less than those issued in six months.
But legislators who supported the tax-cap proposal for Cook County reacted angrily Tuesday when they were told that bond sales in Cook County had begun to mirror the collar county bond rush.
When the collar county tax cap was passed, it included a two-month
”window” to permit taxing bodies to issue bonds for projects already being planned. But some governments saw the grace period as their last chance to borrow money for projects without voter approval. Under the GOP tax-cap plan for Cook County, there would be no window.
The upsurge in Cook County bond activity shows ”the absolutely desperate need for caps because of what`s going on even as we speak,” said State Sen. Walter Dudycz (R-Chicago), who led an eight-member task force that conducted hearings on the tax-cap proposal last summer.
In stymying the GOP effort Tuesday, Democrats said they would consider an alternative plan.
Democrats said their plan would be similar to a proposal offered by Cook County Assessor Thomas Hynes that would phase-in tax caps in the county and, perhaps, statewide.
At the same time, House Speaker Madigan softened his opposition to property tax curbs by maintaining he was not ”unalterably opposed” to the concept of tax caps.
But House Republicans vowed to pick up the issue in a chamber where they are greatly outnumbered, and some GOP lawmakers also began drafting legislation that would impose tax caps on home-rule communities in the collar counties. Those municipalities were exempted from the caps that took effect in the collar counties Oct. 1.
The fervor of the tax-cap issue, magnified by the political implications of Republican-drawn legislative districts that could end a decade of Democratic dominance of the General Assembly, was reflected in the behind-the- scenes maneuvering that led up to Tuesday`s roll call.
On a 26-17 vote, Senate Republicans fell short of advancing their Cook County tax-cap plan to the full Senate. No Democrats voted for the effort by Republicans to use a technical short-cut to consider the measure.
While school districts would likely suffer the greatest impact from any tax limitations, it is park districts that have started the bond push in Cook County. Of the 23 bond issues approved, 14 are from park districts.
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One park district lobbyist said it`s logical that the park districts have been the largest participants so far in the rush.
”It reflects the capital intensive nature of park and recreation agencies because these agencies have a mandate to acquire and develop park land,” said Peter Murphy, general counsel for the Illinois Association of Park Districts.