School districts in Cook County and home-rule municipalities across the suburbs began forming survival plans Thursday to limit anticipated funding losses resulting from Gov. Jim Edgar’s proposed statewide property tax cap.
Already struggling with state aid cuts and freezes on property assessments, many suburban schools in Cook County said their revenue options in the face of a tax cap were limited to floating bond issues, calling for April tax referendums or making deeper budget cuts.
For many, including Palatine Township District 15, Country Club Hills District 160 and Schaumburg District 54, slashing staff and programs is emerging as the most realistic choice should the measure gain approval from the General Assembly.
At the same time, home-rule communities, facing the prospect of a state-imposed tax cap for the first time, said they would lobby lawmakers to remove their municipalities from Edgar’s hit list.
Edgar wants to extend to property owners in Cook County and the rest of the state the same tax relief afforded to collar-county taxpayers last year.
Hoping to curtail levies that have outpaced wages of most suburban residents, Edgar is proposing a 5 percent limit on the annual tax increase or a maximum hike equal to the inflation rate, whichever is less.
While the tax cap has been in place for more than a year in Du Page, Kane, Lake, McHenry and Will Counties, it has exempted home-rule municipalities-generally communities of more than 25,000 residents which under state law have more local taxing powers.
Edgar’s new statewide tax cap plan, which he wants the legislature to pass by March 30, would eliminate the exemption for all home-rule communities.
While some municipal leaders Thursday thought they could persuade state lawmakers to eliminate home-rule towns from Edgar’s tax-cap legislation, school districts in Cook County held out little hope of faring as well.
Some school administrators in Cook County said they are afraid of experiencing the loss of hundreds of thousands of dollars like their collar-county counterparts, including Elgin Unit District 46 in Kane County and Crystal Lake School District 47 in McHenry County.
For some cash-strapped school districts, such as Palatine Township District 15, floating a bond issue to beat implementation of the tax cap appears to be the most attractive option.
Hours after Edgar’s Wednesday State of the State address, in which he outlined his tax proposal, District 15 board members discussed plans to issue $8.4 million in working cash bonds.
School administrators said placing tax-hike referendums on the April ballot is less attractive for two reasons: a fast-approaching Feb. 8 deadline to place a referendum question on the ballot and a resistance by voters in recent years to approve tax referendums.
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“You can’t go out and ask voters to pass a referendum in this financial climate. It wouldn’t have any chance of passing,” said James Morrissey, executive director to the District 15 superintendent for administrative services.
The final option for school districts is the most difficult: making further cuts in programs and staff.
Many school officials in Cook County say it’s unfair for Edgar to propose additional limits on property taxes only a year after he froze property assessments in the county under an earlier plan. The freeze has left school districts with revenue shortfalls this year.
“No one argues with providing relief to homeowners,” said Thomas Rich, superintendent of Mt. Prospect-based River Trails District 26.
“The problem is, what is the state going to do about these programs-such as special education and gifted and talented-that are already woefully underfunded that we are required to provide?” he said. “Sooner or later somebody is going to have to pay the price for quality education.”
District 26 already is looking at a $600,000 deficit in its education fund because of the assessment freeze, which could result in the elimination of its computer technology program and returning full-time kindergarten students to a half-day program.
Rich said the proposed tax cap could cost the district an additional $1 million.
“Without replacing the dollars from the state, in three years the district is going to be broke,” he said.
The property tax freeze was blamed for District 15’s decision this week to make $2.5 million in cuts.
The board is planning to lay off three certified nurses, seven administrators, one principal, the director of community information and 14 reading improvement specialists. In addition, it is restructuring the gifted program and eliminating the all-day kindergarten program.
Approval of the tax cap could mean up to $3 million more in cuts, school officials said.
The cuts “would be devastating. Our community would not recognize the school district,” Morrissey said.
“On the first set of cuts the board of education has worked very hard to preserve class size,” he said. “If the tax cap comes, class sizes will definitely increase.”
For underfunded school systems, such as Country Club Hills District 160, cuts in extracurricular activities hurt a student body whose low incomes have already closed doors for them.
Besides paring staff, the district over the years has cut library services, reduced art and music and even wiped out the lunch program.
“There’s no fat on the bones out here,” said Supt. Ed Chartraw. “We’re not talking about hurting the quality of education. But we are talking about hurting the quality of opportunity.”
But not everyone is opposed to Edgar’s plan. Over the years, many taxpayers have grown frustrated with school budget increases that have grown in double digits even in the wake of higher property assessments.
“I’m all in favor of the tax cap if it’s going to help people keep their homes, particularly single parents and senior citizens,” said Carol Tesmer, a Palatine resident and member of People Affecting Life in the Suburbs, a tax-watch group.
“I have little sympathy for districts like District 15, where the superintendent makes more than $100,000 a year and is furnished a car,” she said. “Schools are simply going to have to tighten their belts.”
Paul Froehlich, Schaumburg District 54 school board vice president, said spending in the district since the early 1980s rose about 100 percent, while enrollment has declined slightly. He said the district used much of the money to boost the administrative staff by 50 percent and for pay raises.
Now the school board plans to cut $4 million by laying off dozens of teachers and eliminating programs such as after-school sports, clubs, yearbooks and student newspapers.
More reductions are expected if the cap goes into effect.
“Taxing bodies have brought this on themselves,” Froehlich said. “You can’t continue to increase your spending faster than the rate that people’s incomes go up.”
Meanwhile, officials in home-rule municipalities, which would be subject to the cap, say they resent having their powers usurped by the state.
Many village presidents and mayors insist they’ve balanced their budgets and kept taxes down-something the state hasn’t been able to do.
“It disturbs me when the state of Illinois thinks they’re so omnipotent that they can come in and dictate to municipalities about how they should rule their communities,” said Elk Grove Village President Charles Zettek, adding that the village’s tax rate remained unchanged in 22 years.
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“The state should take care of their own house and not worry about their municipalities,” he said.
In Lake County, North Chicago Mayor Bobby Thompson said, “I’m insulted that (Edgar) would first eliminate the surtax, impose a cap on the collar counties of Cook, leaving out the home-rule communities, and then turn around and include them.”