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Refinancing plan could shrink Kane County tax bills

Kane County taxpayers upset about forest preserve commissioners' recent vote to unfreeze the district's tax levy may find solace in a pending move to refinance more than $100 million in debt. The move is expected to save local taxpayers millions of dollars over the next 25 years.

The refinancing would occur in a series of moves over three years, assuming interest rates stay low. The actual impact to the average county taxpayer is difficult to calculate, said Ken Stanish, the district's finance director. That's because the savings is spread out over the next decade.

“The easiest thing to say is, for next year, based on doing this, they will see a reduction of about $800,000 in the tax levy,” Stanish said. “After that, the levy will drop by $7 million in 2017, and then by another $8 million in 2018. So you can see the levy will drop quite substantially.”

That's just the impact of one of the refinancing moves. There are three others that, combined, should result in even larger reductions in the amount of money taxpayers still owe on money the district has borrowed. That debt is a big part of the tax bill the district sends to local residents.

There are two portions of the district's tax levy.

One side goes for operations. That's the part of the levy commissioners voted to increase last month to account for new construction that's come onto the tax rolls.

The bond refinancing will impact the other portion of the district's levy, which pays off money borrowed via bonds to purchase land. Right now, about 83 cents of every tax dollar paid to the district goes to pay off money borrowed for land purchases. The district collected about $29.3 million from taxpayers this year to pay down the debt.

“All of this debt was to buy and preserve land,” said Commissioner John Hoscheit. “What this refinancing means is we're going to have a major reduction in what your property tax will be because we're paying off our mortgage on the land we bought.”

There is at least one other bright spot for taxpayers wanting the district to hold the line on spending and borrowing. The refinancing will prevent the district from borrowing any more money until 2018, unless voters grant permission to increase the district's authority to borrow. Right now, there are no immediate plans to seek a tax increase referendum.

Commissioners are set to take a final vote on the refinancing plan Tuesday.

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