Potential revenue losses of at least $27 million spread over the next 24 to 26 years have prompted Round Lake Area Unit District 116 officials to voice concern about a village's plan to enact a special taxing zone.
District 116 plans to continue discussion with the village of Round Lake Beach over a proposed tax increment financing district. If enacted, what's commonly known as a TIF district may reduce the school system's annual property tax revenue.
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Talk about Round Lake Beach's proposal and its potential financial effects on District 116 occurred at a school board meeting Thursday night.
Round Lake Beach is considering the TIF to collect extra money for infrastructure improvements in a mostly residential area bordered by Cedar Lake Road, Hawthorne Drive and Rollins Road on the village's south side.
Under a TIF district, a municipality withholds from other local government units the extra property tax money from rising land values and uses it to pay for upgrades.
Ben Martindale, who serves as liaison to a special state school finance authority still overseeing aspects of District 116, said initial figures show the system's property tax revenue would shrink by $27 million if the TIF exists for 24 to 26 years as proposed by Round Lake Beach.
"That could be a pretty steep or pretty bitter pill for the district to swallow," Martindale said. "Yet, we've talked about needing to be sensitive to relationship with the village. The discussions will be 'so how can we make that less of an impact.'"
Martindale told District 116's elected board members he senses the village has analyzed all potential sources of revenue support to making these infrastructure improvements, and the only option right now available to them is the TIF.
"They are fully aware of the fact that the school district encompasses more than just the village of Round Lake Beach," he said. "They are very aware of the argument that has been presented to them that they are only a part of the district."
Martindale added District 116 has been fortunate, as other TIFs have been cost neutral if not financially beneficial to the school system. He said that hasn't been the case with other Lake County school districts.
District 116's assistant superintendent of business, Mark Powell, told the school board that officials intend to continue discussion next week with Round Lake Beach Village Administrator David Kilbane regarding the proposed TIF.
"We have begun discussion to learn what is the district giving up and how will this affect our taxes," Powell said. "This is all on the table and will continue to be part of the discussion."