Quinn signs fix for school districts that pass tax hikes

If someone asked you for $10, and you knew if you gave him the money that he would also lose $5, would you still give him the money?

Until Gov. Pat Quinn signed a new law this month, suburban taxpayers had to answer a similar question when deciding whether to support tax increases for their local school district.

Under the new law, that question should become moot.

The law makes up for a quirk in state statute that reduces funding to school districts in which voters pass a tax increase to fund daily operations.

"If a tax-cap school district passed a tax rate increase via a referendum, most of the money that they'd collect in real estate taxes would go back to the state in the form of lost state revenues," said Rob Grossi, a financial consultant for school districts who drafted the law.

"So school districts that needed to raise $2 million in new money would often have to raise taxes by $4 million because half of it would go back to the state."

Starting this year, under the new law, those districts will be able to preserve their state aid while enjoying the benefit of taxpayer-approved increases.

"The idea here was the local district shouldn't take a loss based on a tax-rate increase when the locals decide to put in more," said Deanna Sullivan, director of governmental relations for the Illinois Association of School Boards, which lobbied for the fix.

Taxpayers should welcome the law, supporters say, because it means the additional money they pay to their local school district will not be diluted by a reduction in state aid. It also means school districts will not have to ask taxpayers for more than they really need to offset a dramatic reduction in state aid.

"That's a pretty tough sell to ask a community for 50 cents when you need 15 cents," said Tony Quagliano, a former Huntley school board member who championed the legislation. "Now, you can ask for 15 cents."

West Aurora School District 129, where voters approved a tax increase in 2007, is one of several Illinois school districts that will immediately benefit from the law.

"It helps us immensely," said Christi Tyler, chief financial officer of District 129. "Without that, our general state aid would have dropped $9 million," or almost a third of the district's expected share of state aid this year.