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No operations tax hike in proposed school budget : News : Oswego Ledger-Sentinel : Hometown Newspaper for Oswego and Montgomery, Illinois
No operations tax hike in proposed school budget
But board members acknowledge district's debt structure will require increase

by Natalie Stevens

8/21/2014

The Oswego School District Board has placed a tentative budget for fiscal year 2015 on public display that does not include a property tax increase to cover the district's operations.

School district administrators presented the board with three options for the Fiscal Year (FY) 2015 budget at their previous Monday board meeting, along with information on increases in revenue streams the district is receiving this year.

Version A included a local tax increase based on a Consumer Price Index (CPI) of 1.5 percent and would also include new construction. The estimated revenue to be gained would be $2,268,342.

Version B called for only a tax on new construction and no CPI increase, which would reduce local taxes by $1,484,498.

Version C opted for no local tax increase with no CPI increase and no levy on new construction, which would see a local tax reduction of $2,268,342.

The board voted 5-2 to tentatively approve Version C.

The school district received an additional $1.5 million in General State Aid (GSA) from the average daily attendance of 16,463 students.

However, GSA is only being funded at 88.7 percent, which will result in a loss of $5.6 million. This is the third year the district's GSA funds have been prorated, resulting in an accumulated loss of just over $16.6 million.

According to board documents, the district is receiving additional revenue in the forms of state categorical funding ($226,343), federal grants ($440,339), as well as p-card and other local revenue ($226,343).

The district is also saving about $1.26 million in cost reductions from food service, combining building budgets, textbooks and worker's compensation and property insurance.

Because there will be no additional revenue generated from property taxes, the tentative budget has a deficit of $776,627, according to board documents.

Board member Greg O'Neil said the board had approved a similar Version B last year, but said he was not sure he could vote for that option again.

"We're getting that money back - the increase in GSA - but not talking about giving any of that back," O'Neil said.

He mentioned that based on the current tax base, the district is going to have senior citizens who cannot retire in the community because they cannot afford to live there.

"That is not a recipe for a healthy community going forward. If you don't address tax issues now, it's going to come back to bite you," O'Neil said. "I'm not suggesting any huge pullback, I know we have a lot of programs and things we want to accomplish, but we can't just ignore these incremental increases in property taxes. It's not a matter of inconvenience. It's a matter of--I can't afford to live here."

Associate Superintendent Paul O'Malley added that regardless of which version of the budget was approved (even version C), taxpayers will still see an increase on the property tax bills they receive next spring because of the district's debt structure.

"There's always going to be an increase because of principal and interest," said board president Bill Walsh.

Board member Brent Lightfoot commented that the district administration has had a "complete mind change" by even considering budget options like B and C because of feedback from the board and community.

"It's hard to say 'yes' [to Version B] when we would love to lower taxes, but it's hard to not operate this district with the money it needs," Lightfoot said. "We choose to pay our teachers more, our administrators more, and our transportation. That's the reality of running a district. If we don't, we start losing people."

"I absolutely don't love the fact that I can't vote for something that will lower our taxes and still operate school in a fiscally sound way," Lightfoot added.

The board was originally set to vote on Version B, but O'Neil asked for a vote to be done on Version C first. Version C passed in a vote of 5-2, with board members O'Neil, Lightfoot, Swanson, Bauman and McDowell voting in favor, and members Walsh and Paul voting against.

The tentative budget will be on public display for 30 days at the Oswego School District Center and the Oswego Public Library.

There will be a public hearing and final adoption of the FY 2015 budget on Sept. 22 at 7 p.m. at Oswego East High School.




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