District 200 temporary tax cuts expiring

December 11, 2015

After providing temporary tax cuts totaling $28 million over the past two years, Oak Park and River Forest High School District 200 will, as it announced last December, return to earlier taxing levels for the coming year. At its regular meeting on Thurs., Dec. 17, 2015, the Board of Education will therefore hold a public hearing regarding its plans to adopt a 2015 levy of approximately $66 million.

Under Illinois property tax laws, if a school district takes the unusual action of reducing its annual tax levy, the following year’s levy can be based on the highest levy of the past three years. Thus the district’s 2015 levy is based on its 2012 levy. The district anticipates that in comparison to their 2014 tax bill, homeowners will see the District 200 portion of their 2015 tax bill increase by roughly $160 for every $100,000 in assessed value of their home.

Despite this notable increase from last year’s bill, the district’s portion of the 2015 bill still will be lower than it would have been had the district not cut taxes in 2013 and 2014.* The compounding effect of not increasing the tax levy by the annual consumer price index, as allowed under the tax cap law, creates an additional tax savings for property owners of $44 million over a 10-year period. Even with the impact of the district’s proposed pool project factored in, the temporary tax cut will still provide the owner of a $400,000 home (the median local home price) with $2,500 in overall tax savings over the 10-year span.

By opting to return to the 2012 levy amount, the District 200 Board is following recommendations provided by its 2013 Finance Advisory Committee (FAC). The FAC included both school and community representatives and was created to evaluate the appropriateness of the size of District 200’s total fund balance.

At the conclusion of its process in December 2013, the FAC recommended that the District use a combination of short-term tax cuts and long-term capital investments to bring the total fund balance down from 175% of annual expenses to under 100% of expenses within two to four years, and to between 25 and 40% of expenses within eight to ten years, at which time an operating referendum would likely be required. Projections put the fund balance at the end of this fiscal year at $94 million, or 130% of expenditures. Longer-term projections have the district reaching a fund balance below 40% by 2022.

*The high school is just one of the public entities that receives property tax dollars. Therefore, homeowners’ overall tax bills for the past two years still may have increased.