Warren schools: Borrowing $30 million saves tax hike
Warren Township High School officials are telling taxpayers it'll be cheaper for them to let the Gurnee-based district borrow $30 million for construction projects than to reject the request at the polls Nov. 4.
But one board member said the concept of borrowing $30 million to gain a tax-rate reduction doesn't make sense.
Richard Conley said he can't support the Nov. 4 referendum question because at some point taxpayers would foot the bill for repaying principal and interest on that loan.
Warren District 121 board members Tuesday voted 5-0 in favor of eliminating a scheduled property tax-rate drop of 14 cents per $100 of equalized assessed valuation for the bond and interest fund if voters reject the request to borrow the $30 million.
However, if voters approve the ballot measure, officials would let the tax rate fall by 14 cents. Of that amount, the district would keep 5 cents per $100 of assessed value to repay the construction loan, with debt refinancing and restructuring as part of the package. Taxpayers would receive the remaining 9 cents as a property tax rate reduction.
District 121's debt also would be refinanced if the referendum question fails to accelerate repayment of the existing loans. Under that scenario, a majority of officials agreed the district couldn't return the 14 cents to taxpayers because it wouldn't be fiscally prudent if the money can be used to reduce existing debt.
An owner of a $300,000 market value home would see an $88 decrease in a portion of Warren's next property tax bill if the question to borrow $30 million passes. The same property owner's payment toward the district's bond and interest tax would be about the same as it is now if the ballot measure fails.
"It's a challenge no matter what you do," said District 121 board president John Anderson. "There's obviously some people who think it's too good to be true, but it's not."
Conley said Thursday that District 121 is in good financial shape, and fellow board members "crossed the line" by tying a tax-rate reduction to granting permission for borrowing $30 million.
"Such a threat to take away a well-earned tax cut is patently outrageous, and voters should reject this referendum to send this school board a clear message that these types of despicable tactics will not be tolerated," he said.
Neither Conley nor board member Roberta Pfeiffer were present for Tuesday's meeting.
Anderson said plans were in the works to eliminate the scheduled 14-cent tax-rate even if the request to borrow the $30 million didn't land on the Nov. 4 ballot. More specifics are expected to emerge, but he said financial mechanisms allow a unique chance for District 121 to return some money to taxpayers and borrow for a sorely needed building project.
"The only way there will be a tax reduction is if the referendum passes," Anderson said.
Officials said most of the $30 million would go toward expansion of the Almond Road upperclassmen campus, which opened in 1997. An additional 14 classrooms, expansion of the cafeteria into the Black Box Theater, office renovations and more physical education space are part of the Almond plans.
Money also would be used to repair fire sprinklers at the O'Plaine Road building for freshmen and sophomores, and parking lots at both campuses.
About 2,200 students would be accommodated with an Almond campus expansion.