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updated: 11/19/2013 8:53 AM

Elgin U-46 board approves property tax levy increase

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The Elgin Area School District U-46 school board Monday night gave its blessing for the proposed 2013 tax levy incorporating a nearly 3 percent increase over the previous year's property tax extension for all properties within the district in Kane, Cook and DuPage counties.

The increase for existing homeowners will be 1.7 percent over the previous year's extension.

The vote was 6-1 to move forward with the proposed levy.

The district estimates it will levy more than $308 million in property taxes for 2013, a 2.3 percent increase over the previous year's extension, which includes capturing a yet-unknown amount of new construction revenue from improved properties and levying for debt. Property owners will pay the increased taxes in 2014.

The proposed total levy has been revised since it was presented to the board Nov. 4 and reduced by roughly $4.5 million, said Dale Burnidge, U-46 finance director.

The district typically has increased its property tax levy each year based on the Consumer Price Index, which was 3 percent last year.

The debt service fund levy, which is fixed and determined based on the repayment schedule for bonds, amounts to roughly $43 million of the total or a 1.8 percent decrease over the previous year's extension.

Officials are estimating the total taxable value of property that was either newly built or improved to be $30 million. The actual equalized assessed value of improved properties won't be known until April for DuPage and Kane counties, and September for Cook County.

U-46 Chief Operations Officer Jeff King said the staff felt the district couldn't afford to lower the levy any further due to anticipated revenue losses next year.

King said the state has warned school districts to prepare for a possible reduction in general state aid.

Officials expect to collect 89 percent of general state aid in this fiscal year. In next year's budget, "it could drop to 85 percent," King said.

The decrease could cost the district roughly $5 million in revenue, he said.

U-46 also may not get all of its categorical revenues from the state -- money restricted for programs such as special education, bilingual education and transportation -- resulting in a potential shortfall of nearly $7 million.

"We tried to tighten down as much as we are comfortable doing based on the numbers we have," King said. "Given the current environment, the state's financial position now is no better than it was last year."

King said balancing the district's budget this year without the categorical and general state aid revenue would have been difficult.

School board member Frank Napolitano said he couldn't support the increase. "I feel we need to do everything we can to keep the taxes flat for the residents," he said.

Other board members said while they didn't like the idea of raising taxes, they had no choice.

"Nobody likes raising taxes," board member Traci O'Neal Ellis said. "I am struggling to figure out a way to fund the operations of this district and meet the needs of the students and staff."

Ellis said if taxpayers truly understood the problems with education funding, they wouldn't tolerate the state's failure to pay its fair share.

"I feel boxed in and constrained to support this," she said.

Board member Veronica Noland said the real solution is education funding reform and that U-46 should take the lead as the state's second-largest school district.

"We need to be looking at that more actively, whether it's hiring a lobbyist or getting the public behind a piece of legislation," she said.

The school board is expected to adopt the proposed tax levy resolution at its Dec. 9 meeting. The levy certificate must be filed with respective counties no later than Dec. 31.

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