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.
“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.
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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.
“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.”