Taxpayer relief methods eyed in Lake Bluff
Updated: November 12, 2012 11:44AM
LAKE BLUFF — Taxpayers in School District 65 could save $750 on their property taxes next summer under one of the scenarios discussed at a meeting Tuesday.
After a successful referendum in 2002, the Lake Bluff elementary district has amassed a $15 million surplus, and about 10 residents attended this week’s meeting at the village hall to learn whether, how and when some of that money might be returned to taxpayers.
“We have this surplus and a community that’s really looking for some form of tax relief,” said Superintendent Jean Sophie. “Whatever we determine, we can do for one year or we can meet some of these goals this year while we continue the total strategic plan.”
Jane Lair, director of business services, offered two plans based on whether the fund balance would be dropped to 70 percent or 50 percent, or an $11.8 million or $10 million surplus, by 2018.
In both plans, the district would take in only as much money as it needs to operate for the next three years, bringing in less taxes than the current levy rate allows. The 2011 tax levy rate was $2.508 per $100 of equalized assessed valuation.
Lair said maintaining strong reserves is important because of problems that can arise when the state doesn’t meet its financial obligations, like reimbursing schools for special education expenditures.
“It’s good financial management to have reserves,” Lair said. “The amount of reserves is a philosophical question. There is no other type of governmental entity in the state of Illinois that is as directly impacted by state or federal legislation.
“We have the most unfunded mandates.”
While the effects on taxpayers were not calculated for the $11.8 million plan, the $10 million plan would reduce the property tax bill of the owner of a $750,000 house by $750 for 2012, school officials said.
The change in the expenditures-to-revenue ratio for that plan also also would place the district in the financial review category, a step down from its current ranking, though Lair said that would be unlikely to affect its bond rating.
District 65 School Board Vice President Terry Kearney asked whether the reduction in the surplus could be condensed to one year to give taxpayers a bigger immediate savings, but Lair said she thought that would be unwise.
“The risk is that you’re going to put the district in such a precarious position by eliminating so much of the levy so quickly that you won’t be able to recover,” she said.
Sophie said she would not be comfortable reducing the balance below 50 percent.
“Right now, with all the uncertainties that are going on, without having the facilities plan or the strategic plan, I would hesitate to go any lower than that,” she said.
Financial consultant Elizabeth Hennessy of William Blair & Co. offered some longterm solutions that would provide little tax relief. She suggested using $3.75 million from the surplus to pay down some of the $24.4 million in bonds that voters approved in 2007 for the new Lake Bluff Elementary school construction.
This could save the district more than $1 million in the next 15 years by reducing interest payments.
While no residents spoke during the meeting, John Marozsan said afterward that he wanted the district to establish a strategic plan before making a decision and that he also would like to see more dramatic cuts in the fund balance.
“Seventy percent to me sounds completely unreasonable,” he said. “What the taxpayers see is an excessive fund balance.”
The surplus will be discussed again, but not voted on, at the school district’s Oct. 23 meeting. Voting on the levy takes place in December.