DuPage schools concerned about impact of potential property tax delays
A plan to waive late fees on property tax payments may sound like a simple way to ease the burden on DuPage residents during the COVID-19 pandemic, but superintendents across the county are warning of the consequences to public school districts.
A letter signed by 34 superintendents asks county board members to consider "important facts" before deciding whether to establish a grace period for those who may not be able to meet their first property tax payment in June.
Educators are concerned that removing late penalties could lead to delayed revenue for districts and force several to do short-term borrowing just to make payroll.
"You end up in a budget where debt service is competing with the full-time or part-time employment of educators," said Queen Bee Elementary District 16 Superintendent Joseph Williams, who wrote the letter.
Residents can expect their property tax bills to arrive the first week of May. Property taxes are due in two equal installments, the first on June 1 and the second by Sept. 1.
But with unemployment spiking, Treasurer Gwen Henry says the county could adopt an ordinance waiving late penalties for those adversely affected by the COVID-19 crisis. If approved, residents who demonstrate a need could apply to have late fees waived for up to 90 days.
The county board is expected to vote on the proposal on April 28.
In the letter, superintendents acknowledge removing late penalties would provide short-term relief for taxpayers. But budgets for public school districts rely heavily on property tax revenues.
"Unlike other taxing bodies, this is our primary source of revenue for running our organizations and providing the services we do," Williams said.
School districts take roughly 73% of the tax bill in DuPage. The revenue they receive in June is the primary building block for the next fiscal year.
"If you take out the early cash that comes in June, we have reserves that could get us through September," Glenbard High School District 87 Superintendent Dave Larson said. But other districts don't have that much in reserve and would need to borrow to make payroll.
"It's a slippery slope for districts that are trying to make sure to have quality programming in August when the kids come back," he said.
An executive order from the governor prohibits public schools from furloughing or laying off employees during the crisis. Districts also have responsibilities to fulfill, including providing food to all students who request it during school days.
And while public school districts receive funding from the state and federal governments, there's been a delay in some state payments.
In the letter, the superintendents say they're concerned that late state payments, combined with a possible delay of property taxes, "will exacerbate an increasingly tight financial position that public schools occupy."