Sales Tax for School Facilities
Keep an Open Mind!!!!!
by Tom Mulligan
May 05, 2008
There has been some discussion recently about a proposed county-wide sales tax increase to help fund school districts’ facilities costs. Public Act 095-0675 allows county boards to impose a sales tax increase of up to 1% exclusively for the purpose of school facilities. The county board would impose the tax if it is submitted to the electors of the county and approved by a majority of those voting on the question. The sales tax increase applies to the purchase of tangible personal property. This does not include the sale of groceries (food that is to be used in the home), prescription and non-prescription medicines and drugs, and personal property that is registered with an agency of this State’s government (autos, watercraft, mobile homes, etc.).
As stated earlier, the sales tax can only be used for school facility purposes which include: the purchase of land, building and developing, construction, building improvements, architectural planning, fire prevention, safety, energy conservation, building security and specified repairs. The revenue received from the tax can also be used to pay off existing debt that was previously approved by voters in a school district. So in other words, Riverton could use this to help pay off the debt of the new construction done in the district. This would in turn, lower the school district tax rate and property taxes.
School districts in Illinois are funded primarily through local property taxes, revenue from the state of Illinois (through grants and general state aid) and revenue from the federal government (our district does not receive a substantial amount of money from the federal government). As you know, property taxes are imposed only on the property owners within the school district. It is a well known fact that property taxes are an inequitable way to fund schools. This funding structure is why Illinois has some school districts spending up to $20,000 in operating expense per pupil and our district only spending $5,785 (remember, our district was in the bottom 1% on that report in operating expenses per pupil). In other words, there are some districts in the state that get to spend an additional $14,000 per student because they can generate so much money through property taxes than Riverton can! That is a tremendous difference in expenditures between school districts (over $15,000,000 annually).
The sales tax increase is very attractive for many reasons. First, the sales tax is a more equitable tax for funding schools because all persons (not just property owners) share the responsibility for the funding. Second, it is not only Riverton School District residents providing funds for the school facilities; it is any consumer who purchases items other than groceries or medicines in Sangamon County. Sangamon County has numerous attractions that draw visitors from all over the state of Illinois and the country. All those visitors will be helping to fund school facilities in Sangamon County with any purchases they make while here. Finally, the sales tax revenue can be used to offset bond and interest payments and consequently lower property taxes annually.
The Riverton School District has always taken a proactive approach at providing excellent facilities for our students. Even with that proactive approach, the facility needs continue to be substantial. The recent health and life safety report from the district architects reports that the district will need to commit close to $1,000,000 over the next five years for roof repair across the district. Unfortunately, the limited tax base in our district requires the district to commit revenue for facility improvements that would be better suited for education programs. The district currently puts around $400,000 annually from general state aid to help fund projects around the district to improve school facilities rather than using that money to provide educational programs.
The question of a sales tax increase in Sangamon County is in the very early stages of discussion. The districts in our county are working locally to determine facility needs to determine if there is even enough need to pose the question to voters in our county. Those conversations will be very cautious and well thought out because I am sure that no district would ask voters to approve any increase in taxes without determining a substantial need first.
In summary, our school district facility needs continue to grow each year, which requires the district to commit financial resources to maintain those facilities. A steady and committed revenue source for facility needs would allow our school district to use the funds from general state aid for educational programs, which is what the money is designed for. This revenue source would be a shared responsibility of not only people in Sangamon County but from people all over the state and even the country. And as a bonus, the district could use those funds to lower property taxes for those property owners in the Riverton School District.
As you hear more about the possible sales tax increase for school facilities, please keep an open mind and be willing to listen to how this may affect you as a consumer, a taxpayer and a member of the Riverton Learning Community.
