Sales Tax In Riverton
by Tom Mulligan
June 11, 2010
The Sales Tax Steering Committee for Sangamon County has requested that each school district provide a position statement regarding how the district would use funds generated through a sales tax increase for school facilities. As a result, the following outlines how Riverton Community Unit School District #14 intends to use revenue generated from a sales tax increase. They are listed in order of priority for the school board.
Paying Off Debt Annually on the $8,800,000 General Obligation Bonds from 2005
Explanation: In 2005, the school district passed a building bond referendum, which allowed the district to upgrade the facilities district-wide. The bond obligation will be paid in annual installments until the year 2021. Each year, the district levies a bond and interest tax as part of the tax levy, to pay off that annual obligation. That tax rate for the debt portion for this tax year (2009) was $0.6940 for every $100 of assessed value. For a home assessed at $150,000, the tax bill for that debt obligation would have been $350. The district will use the sales tax revenue to pay off part of that debt annually and in turn, reduce the tax on property tax owners (lowering their property tax bill) in the district.
Paying Off Debt Annually on the $2,100,000 QZAB Bonds
Explanation: The district recently sold QZAB bonds in the amount of $2,100,000 to again provide facility upgrades district-wide. These bonds will be paid back by the district over the next 16 years, with an annual payment of around $160,000. The money to pay this annual payment comes from the district’s general funds. This requires the district to obligate that money for that payment rather than using it for other purposes.
Use for Annual Building Improvements
Explanation: For the last several years, the district has averaged around $400,000 to $500,000 from the annual district budget on building improvements. Any remaining funds after paying off the two debt obligations discussed above would be used for annual building improvements. This would allow the district to then direct those funds annually spent on building improvement to educational programs for students.
Purchase of Additional Property
Explanation: In future years, there may be a need for the district to expand the district’s facilities, which may require the district to purchase property. Revenue generated from the sales tax increase could be used to make that purchase. Again, this would free up other funds to spend on educational programs.
