Aurora outlet mall taxes should lower ours, Batavia school district residents say
The end of the tax-increment financing district that includes the Chicago Premium Outlets Mall in Aurora is a big gift to the Batavia school district.
It gets to book it, and a neighboring industrial site, this year as an estimated $95.68 million worth of new construction. And new construction is not subject to the state's property tax extension cap law in its first year.
Which means the school district has calculated it could get as much as $7.162 million in property taxes out of it, collectible in the spring of 2014.
But some district residents instead want that money used to reduce how much tax they will have to pay.
In other words, the district should take roughly the same tax levy as last year but spread it out over more taxable property.
“It's (the mall taxes) pure money, straight and simple. It's icing on the cake,” Sylvia Keppel told the school board finance committee Monday afternoon.
She said she estimates if that were done, the property tax bill on a house with a market value of $240,000 would drop about $400.
School district officials believe that under the levy it proposes and according to district assumptions about property value, the tax bill would decrease by about $21 per parcel of residential land.
Kris Monn, the district's assistant superintendent for business, said after the meeting he could not comment on the accuracy of Keppel's proposal, as he had not seen how she calculated it.
The school district has proposed increasing the levy for its operating funds by 12.92 percent.
By law, it can only raise the operating funds levy 1.7 percent this year on existing property.
District officials hope that by asking for more, however, the district will capture as much property tax revenue as it can from any new construction in the district, including the mall.
The operating part of the levy would go up, but the debt part would decrease about $70, according to Monn.
The debt part of the tax levy is not subject to the tax cap law; it is set by the county clerk in an amount sufficient to make the district's loan payments.
This past spring, the district received $55.43 million in property taxes for operations, and $10.44 million for debt.
It proposes asking for $62.6 million in taxes for operations and $10.44 million for debt.
The board will have a public hearing on the levy at 7 p.m. Dec. 17 and will vote on it later that night.
Keppel criticized that plan, saying the two should be held on different nights to give board members time to consider what residents say at the hearing.
Board member Jon Gaspar, who is not on the finance committee, asked to be provided information on the impact of a flat operating funds levy or various increases on the district's finances.
He said, however, he would not favor anything that would require cutting staff.
“I'm a taxpayer also. I want to be prudent on everything and listen to everybody,” he said.
Superintendent Lisa Hichens said the district has received seven emails from residents about the levy, all of them asking for a reduction.
“Twelve percent is really, really high. We really, really need a break,” Keppel said.
One option could be for the district to ask for all it could get for operations, then use some of that money to abate the levy collected for debt repayment. Monn said the district has not discussed doing that.
The mall, at Farnsworth Avenue and I-88, was in Aurora TIF District 2.
When the district started in 1989, much of it was farmland, and the total assessed value was $226,777.
Property taxes for the district were frozen at the 1989 levels; higher taxes that resulted from the increase in the land value were devoted to paying for the improvements to the properties.
The TIF expired in December 2012.