The Hinsdale High School District 86 Board is poised to pass a $85.3 million property tax levy at its Dec. 12 board meeting.
Josh Stephenson, the district’s chief financial officer, presented the proposed 2019 levy at the Nov. 14 meeting, and board members approved it Nov. 25.
“We are not required to have a Truth in Taxation hearing,” Stephenson noted, since the amount does not exceed 105 percent of the 2018 property tax extension. “Year over year, we’re looking at a 2.8 percent increase.”
Board member Marty Turek asked Stephenson if he considered the impact a decrease in state revenue would have in light of ongoing budget challenges in Springfield. Stephenson said his department runs alternate budget forecasts in the event of such factors, such as the potential property tax freeze that was discussed a couple of years ago. But he suggested the current climate does not prompt such an exercise.
“We just use what we reasonably anticipate will happen,” Stephenson said.
Turek then asked where cuts could be made.
“What’s the biggest lever you have to pull, besides salary and benefits?” Turek asked, before admitting “there might not be one.”
That qualifier elicited a laugh from Stephenson, who said the budget is very lean.
“About 80 percent of the district’s expenses is salary and benefits,” he said. “(We have) very minimal amount of supplies, purchased services, et cetera. Over the last few years, there’s been cuts to those budgets, so there’s not really that much there.”
Board President Nancy Pollak asked how much in tax revenue has been forfeited since the district’s zero increase levy in 2013.
“I believe it is $6.7 million,” Stephenson replied.
“I won’t ask every year. It’s depressing,” Pollak remarked.
Board member Kevin Camden praised Stephenson at the board’s Oct. 23 meeting when his forecast assumptions were approved, the first step in the levy process.
“Josh historically does a good job with forecasting,” Camden said. “He errs on the side of conservative for revenue, liberal on expense increases, and it’s served us well.”
District 181
Board members in Consolidated Elementary District 181 have tried various approaches in setting the property tax levy in recent years in an effort to balance the need for revenue with concern for taxpayers.
“The lifeline for this school district is local property tax. About 90 percent of our revenue comes from our very supportive and generous taxpayers,” Mohsin Dada, chief financial officer, told the board Nov. 18.
Dada is recommending a levy of $64.4 million, the full amount allowed under the tax cap, with the understanding that $604,000 to $780,000 will be abated in 2020.
The board plans to abate almost $6 million between 2018 and 2022 to decrease taxpayers’ burden. In levy year 2023, the district’s debt service requirement is expected to drop by about $4 million, Dada said.
“It is very, very rare for a school district to use those abatement dollars to lower the rate,” he said.
The board could set a lower levy, but because the increase allowed each year is based on the amount requested the previous year, lost revenue would be compounded. But Dada cautioned the board from abating taxes in perpetuity.
“If you want to avoid a referendum for decades, the best way to do it is to make sure whatever you don’t spend, grow it in your balance and don’t abate it,” he said.
Board President Bill Merchantz said he wants to know more about the $3.7 million operating fund surplus from the 2018-19 fiscal year that he identified in the annual audit. That discussion will continue before the board finalizes the levy Dec. 16, Superintendent Hector Garcia said.
That meeting is set for 7 p.m. at the administration office.
Village of Hinsdale
At Hinsdale’s village hall, trustees are expected to approve a 2019 property tax levy of $7.07 million for the village and $3.17 million for the Hinsdale Public Library at their Dec. 10 meeting. The amount represents a 2.8 percent increase over the 2018 property tax extension.
At a Nov. 19 joint meeting of trustees and finance commissioners, village manager Kathleen Gargano said the $18 million in estimated new construction enables the board to ask for more than the consumer price index as provided by the tax cap, officially known as the property tax extension limitation law.
“While the CPI is 1.8, 1.9 (percent), the PTELL does allow us to increase for growth and a loss factor,” she said.
Darrell Langlois, finance director, said the village has learned to levy and balance its budget even with less money from the state.
“Three years ago, the state imposed, basically, a 10 percent hold-back on what normal distributions were. It was reduced to 5 percent, and they keep saying it’s a one-time thing,” Langlois said. “So the budget is based upon continuing that 5 percent hold-back. That’s roughly about $80,000 of money that we’re not getting because of the state budget.”