Schools sales tax referendum working way back to voters
Jan. 7—OAKWOOD — The Oakwood Community Unit School District 76 board this week approved putting a referendum question on the ballot again for a county schools sales tax increase.
It's been rejected twice by voters since 2018.
The board recommended approving the resolution for a One Cent County Schools Facilities Sales Tax. The resolution directs the Vermilion County Regional Superintendent of Schools to certify to the election authorities the question of imposing a retailers' occupation tax and a service occupation tax to be used exclusively for school facility purposes, school resource officers and mental health professionals, before voters in the April 4 consolidated election.
This again would affect all school districts in Vermilion County.
According to information put together by Oakwood Superintendent Larry Maynard, 56 of 102 Illinois counties passed the CSFST. Champaign County began the tax in 2010 and has provided property tax relief and major school facility improvements since implementation. Those who spend money in Champaign already pay the CSFST and help fund schools in Champaign County, Maynard said.
Since 2007, Illinois voters have had the option to approve a 1percent County Schools Facility Tax (commonly known as a sales tax), that shifts facility funding away from property taxes.
Items that are currently subject to sales tax will be subject to the CSFST (no new items are taxed). Some items are exempt from the CSFST: groceries, medicine, vehicles, mobile homes, ATVs/RVs, seed, fertilizer, farm equipment and parts/inputs.
The money can be used by school districts to pay off facility debt and reduce property tax, new school facilities/renovations, or hire school resource officers and mental health providers. The money cannot pay teacher salaries, supplies, books, buses or operating costs. List of allowable items: payoff facility debt and reduce property tax, land acquisition, new school facilities (including athletics), additions and renovations, improve security and safety, architectural planning, parking lots, energy efficiency, durable equipment (non-movable items), fire prevention and life safety, demolition, roof repairs, school resource officers and mental health providers.
All financial decisions of how the money would be used are made exclusively by the local school boards of education throughout Vermilion County for each district.
Revenue distribution logistics (enrollment): equally for every pupil that lives in the county and attends public school, regardless of the location of that school.
Each school district in the county would receive a portion of sales tax money that is based on student enrollment. The most recent CSFST revenue projection for Oakwood is estimated to be approximately $601,208 in new money.
How would Oakwood CUSD 76 use the money?
"Ultimately improving educational opportunities for our students is a priority for the district," according to Maynard.
Items listed in the district's strategic plan for facilities which provide guidance for how CSFST revenue could be used to accomplish this vision and goals:
Priority No. 1: Reduce property taxes. New money can be used to pay off facility debt. Currently, property tax is used for facility debt. "We would be able to utilize a portion of the money to pay off bond/interest debt to reduce property taxes," according to Maynard.
Priority No. 2: Facility improvements, renovations and land acquisition. Sales tax money left over from property tax abatement would be used to address renovations at Oakwood High School and extracurricular facility improvements such as new high school gymnasium, parking lot expansion and repairs, acquire land, centralized athletic facilities complex, new high school 9-12 grades building, new fine arts facility/cafetorium for the high school, early childhood learning center, science STEM lab(s) renovation at the high school and energy efficiency.
Estimated effect on the Oakwood property tax rate and bill:
* The potential estimated effect on the rate: $5.18 to $4.81.
* Effect on a $65,000 home = $57 decrease on bill
* Effect on a $100,000 home = $101 decrease on bill
* Effect on a $150,000 home = $162 decrease on bill
* Effect on a $200,000 home = $224 decrease on bill
CSFST Cost Examples-Certain Items Exempt
$100 groceries — No increase
$35 gas — 35 cent increase
$23,000 car — No increase
$8 fast food — 8 cent increase
$5,000 corn seed — No increase
$600 TV — $6 increase
$40 medicine — No increase
$5 cigarettes — 5 cent increase
$350,000 tractor — No increase
Vermilion County Property Tax Rates
Armstrong (HS+GS) $4.63
Oakwood (w/CSFST) $4.81, Currently $5.12
Potomac $4.82
Hoopeston $5.04
Salt Fork (Jamaica) $5.06
Westville $5.08
Salt Fork (Catlin) $5.23
Bismarck $5.33
Georgetown $5.13
Danville $5.46
Rossville $5.54
Comparing Property Tax Savings to Sales Tax Costs
Revenue from sales tax can be used to reduce property taxes by paying facility debt. This analysis shows amounts of CSFST purchases needed to offset property tax savings.
$100,000 home = $101 decrease in property taxes; $10,100 of purchases needed to = $101.
$150,000 home = $162 decrease in property taxes; $16,200 of purchases needed to = $162.
$200,000 home = $224 decrease in property taxes; $22,400 of purchases needed to = $224.
What's next?
School districts must adopt the question no later than Jan. 17 and submit the passed resolution to the Regional Office of Education. When school boards representing more than 50 percent of the resident student enrollment in the county adopt resolutions, the regional superintendent must certify and file the public question with the county clerk no later than Jan. 26.
The county clerk will then place the question on the ballot at the next regularly scheduled election, April 4, 2023.
The question on the ballot would read: Shall a retailers' occupation tax and a service occupation tax (commonly referred to as "Sales Tax") be imposed in Vermilion County at a rate of one (1) percent to be used exclusively for school facility purposes, school resource officers, and mental health professionals?" A simple majority vote is required for passage.
If approved by voters, money is received monthly beginning approximately four months after the tax goes into effect. The money follows the student.
Maynard said he believes all but one or two school boards in the county have already approved putting the referendum on the ballot again.
The other county school districts do not need Danville's support because District 118 does not serve the majority of the students in the county. Due to a decline in student enrollment in District 118 since 2014, only about 43 percent of the total number of students in Vermilion County attends District 118.
The tax increase would increase Danville's sales tax rate to 10.25 percent.
The countywide vote total on the sales tax increase was 4,464 "yes" to 5,103 "no" in 2018, a difference of 639 votes.
In 2020, the vote was 5,555 "yes" to 6,392 "no," a difference of 837 votes.
Maynard is optimistic this time around on it passing.
"There's been a good response," he said. "I think a lot of it's education and informing our community."
"I think we are hopeful," he said of the school districts.
Maynard said the reality is that people living here are already paying the tax in Champaign and elsewhere for those community's schools.
Locally, school districts can use a portion of the tax money to lower bond and interest, lowering property taxes for the public, and the rest of the money can help school districts with aging facilities, he said.
"It's a win-win for everybody," Maynard said. "Taxpayers get more back. It's a win for kids."
The school districts were approving the question in December and January.
Regional Superintendent of Schools Aaron Hird said he was waiting for some final school district referendum resolution paperwork.
There are 11 school districts in Vermilion County.
"I'm still collecting them" Hird said, about reaching the 51 percent or more of Vermilion County's student population to seek approval to assess the Illinois County School Facility Tax of up to 1 percent.
