[PPT] - Mattoon CUSD#2 Presentation Illinois County School Facility Tax PowerPoint Presentation

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Illinois County School Facility Tax Public Act 95-0675

Mattoon CUSD#2 Presentation

Larry D. Lilly, Superintendent Mattoon CUSD#2

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 Sales tax vs. Property tax for School Capital

– A tax on the sales of retail goods paid by consumers vs. a

real property tax paid by property owners

 Originated in Iowa in 1998

– Adopted by all counties in Iowa

 Passed by the Illinois General Assembly

n May 30, 2007

 Recently approved by Champaign County in

April 2009

Landmark Legislation for Illinois

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Illinois County School Facility Tax Act:

County where the CSFT has passed

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 Sales Tax Base:

– Everything in the municipal and county retail sales tax base

is included in the tax base except for:

 Cars, Trucks, ATVs  Boats & RVs  Mobile homes  Qualifying Food  Drugs  Farm Equipment and Parts  Farm Inputs

– “If it is not currently taxed, it will not be taxed”

Low Impact on Key Business and Fixed Income Persons

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Area Sales Tax Rates

7.00% (Additional taxes on food, hotel, and gas) Terre Haute 6.25% Coles County 7.50% Champaign County 6.50% Effingham County 6.75% Charleston 6.75% (7.75% in S. Rt. 45 & Broadway East Business District) Mattoon 6.25% Oakland 8.75% Champaign 8.75% Urbana 6.50% (7.50% in Ford Ave. Business District) Effingham 8.00% Decatur Sales Tax Rates City

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Use of Sales Tax Revenues

Abatement of Property Taxes Levied to Pay Bonds Issued for Capital Purposes

Parking Lots Financing Costs Disabled Access & Security Fire Prevention and Life Safety Durable Equipment (non-moveable items) Salaries and Overhead Architectural Planning Operating Costs Ongoing Maintenance Moveable Equipment Land Acquisition Computers Additions & Renovations Detached Furniture & Fixtures New Facilities Buses Demolition

Ineligible Uses Eligible Capital Projects

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County School Facility Tax (CSFT)

Worksheet for Coles County - Abatement Impact Per District

$563,602,375 $4,453,900 100% 6173 Total $136.47 $0.41 $26,245,290 $721 $148,189 3.3% 205 Oakland $172.93 $0.52 $271,994,612 $721 $2,383,725 53.5% 3,304 Mattoon $173.33 $0.52 $265,362,473 $721 $1.921,986 43.2% 2,664 Charleston Effect of Tax Reduction

n

$100,000 Home Potential Property Tax Reduction

(Abatement) (4)

2007 District EAV (3) Adjusted Annual CSFT per pupil Adjusted Annual CSFT per district (2) Percent

f Total

2008-09 Enrollment from Fall Housing Report (1) District H G F E D C B A

(1) K-12 Enrollment from ISBE Fall Housing Report (2) Based on 1% sales tax derived from Illinois Department of Revenue CST data, also excludes registered vehicles, 2008 figure estimated with actual Q1, Q2, Q3, and Q4 of 2007 (3) As reported by ISBE Annual Financial Reports and County (4) 2009 property tax rates: Charleston 4.70; Mattoon 4.53; and Oakland 5.06 For additional information please contact Tom Crabtree at 1-800-230-5151 ext. 8457 at Stifel Nicolaus

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Property Tax Relief

 If approved, Mattoon CUSD#2 would receive approximately

$2.3 million in annual sales tax revenue.

 The current elementary bond payment is approximately $1.5

million annually. District levies approximately .52 cents in property taxes to make the bond payment.

 Mattoon Board of Education would reduce district total tax levy

by .52 cents for the 2010 levy for taxes payable in 2011.

 District would make the annual elementary bond payment with

sales tax revenue.

 Mattoon taxpayer owning a $100,000 home would save

$172.93 per year.

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Mattoon CUSD#2 Debt Schedule

Year

Elem. Bonds

MHS Debt Cert. Total 2002-03 $1,456,643 $0 $1,456,643 2003-04 $1,304,985 $0 $1,304,985 2004-05 $1,331,698 $0 $1,331,698 2005-06 $1,356,273 $368,989 $1,725,262 2006-07 $1,383,710 $366,975 $1,750,685 2007-08 $1,409,759 $368,730 $1,778,489 2008-09 $1,438,499 $365,480 $1,803,979 2009-10 $1,468,604 $363,223 $1,831,827 2010-11 $1,494,854 $365,618 $1,860,472 2011-12 $1,524,794 $362,281 $1,887,075 2012-13 $1,556,794 $363,369 $1,920,163 2013-14 $1,584,794 $363,846 $1,948,640 2014-15 $1,618,794 $363,694 $1,982,488 2015-16 $1,648,294 $362,891 $2,011,185 2016-17 $1,686,944 $361,419 $2,048,363 2017-18 $1,716,344 $364,160 $2,080,504 2018-19 $1,755,869 $361,093 $2,116,962 2019-20 $1,791,963 $362,189 $2,154,152 2020-21 $943,463 $0 $943,463 TOTALS $28,473,078 $3,993,783 $33,937,035 Remainder To Date $17,322,907 $2,160,386 $20,953,467

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3-Point Plan for 1% Sales Tax Revenue

(Mattoon CUSD#2)

1.

Reduce district property tax levy by approximately .52 cents.



Approximately $1.5 million annually

2.

Pay debt certificates for MHS renovation.



Approximately $400,000 annually

3.

Maintain existing district facilities.



Approximately $400,000 annually

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Savings Comparison

f Sales Tax for Property Tax Swap

 The owner of a $100,000 home, living in the Mattoon school

district, would save $172.83 in property taxes.

 That same $100,000 homeowner would have to buy over

$17,293 of goods (exceptions below), in one year, taxed at 1% to lose the benefit of the property tax savings.

 Exceptions to the 1% County Sales Tax:

 Cars, Trucks, ATVs  Boats & RVs  Mobile homes  Most Groceries  Drugs  Farm Equipment and Parts  Farm Inputs

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How to Place Before Voters?

 Two Ways:

– County Board may pass a resolution – School districts may pass a resolution

 When School Boards representing at least 51% of the

resident student enrollment in the county adopt resolutions, the County board must certify the question to the County clerk.

 County Clerk will place on the ballot at the next

regularly scheduled election.

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Required Language on the Ballot

 Public Question:

Shall Coles County be authorized to impose a retailers’ occupation tax and a service

ccupation tax (commonly referred to as a

“sales tax”) at a rate of one percent to be used exclusively for school facility purposes?

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Passing the Vote and Receipt of Revenues

 Simple majority of county-wide votes cast needed

to pass.

 County Board may then adopt an ordinance

imposing the tax.

 The ordinance and the election results must:

– Be certified by the County Clerk – Filed with the Illinois Department of Revenue

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Timeline is Critical

Target Election: February 2, 2010

After the County Board has Adopted Ordinance After the County Board has Adopted Ordinance

Ability to Sell Bonds Backed by Sales Tax

July 1, 2011 July 1, 2010

Sales Tax Goes into Effect

Nov. 2, 2010

Feb 2, 2010

Nov. 2009

Election Date

October 2011 October 2010

District Receives New Sales Tax Revenues

Approximately 90 Days after July 1, 2011 Approximately 90 Days after July 1, 2010

Regional Superintendent Funds from the State

No later than April 1, 2011 No later than April 1, 2010

County Adopt Ordinance and File with IL Dept. of

Rev. to Enact Tax
Nov. 2, 2010
Feb. 2, 2010

Election

No later than

Sept. 1, 2010

No later than

Dec. 3, 2009

Certify the Resolution (County Board)

Aug. 30, 2010
Nov. 30, 2009

Pass Resolution (County Board or School Districts)

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Will the 1% Sales Tax Sunset?

What happens when current bonds retire?

Options:

1.

Sales Tax Remains for Maintenance and/or Expansion

The County Board (CB) imposes the sales tax. The CB may leave the tax in effect after bonds are retired. In this option, the school district could use the revenue for ongoing maintenance and expand facilities if needed without increases in property taxes for facilities.

2.

Sales Tax Repealed

The County Board may repeal all or part of the sales tax in .25% increments from 0 to 1% at any time; however, the CB must continue impose a rate sufficient to pay for bonds supported by the sales tax.

3.

Property Tax Levy Decreased

The School Board could decrease property taxes levied for the Operations and Maintenance Fund and substitute sales tax revenue to pay for some maintenance costs should the tax remain in effect.

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Outcomes:

1. Eases burden on local property taxpayers

Shares school facility costs with others from outside the

county, including EIU, LLC, I-57, and county events

2. Supports economic development

Reduces property tax burden on businesses considering and

locating in Coles County

3. Provides an ongoing revenue stream

Pays for maintenance and improvement to facilities

4. Supports quality learning environment for kids.

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Key Resources

Jane Quinlan

Champaign-Ford Counties ROE #9 200 South Fredrick Street Rantoul, IL 61866 Phone: 217-893-3219 jquinlan@roe9.k12.il.us

Tom Sherman

Asst. Superintendent for

Business Mattoon CUSD#2 1701 Charleston Ave. Mattoon, IL 61938 Phone: 217-238-8880 shermant@mattoon.k12.il.us

Gene Logas

Chief Financial Officer Champaign CUSD #4 703 S. New Street Champaign, IL 61820 Phone: 217/373-7353 logasge@champaignschools.org

Local Tax Allocation Division

Illinois Department of Revenue Legal Services Office 101 West Jefferson Springfield, Illinois 62794 Phone: 217/785-6518

Deanna Sullivan

Director of Governmental Relations IASB 2921 Baker Drive Springfield, Illinois 62703- 5929 Phone: 217/528-9688 x1123 dsullivan@iasb.com

Lynda K. Given Kyle Harding

Chapman and Cutler 111 West Monroe Street Chicago, IL 60603-4080 Phone: 312/845-3000 given@chapman.com harding@chapman.com

Larry D. Lilly

Superintendent of Schools Mattoon CUSD#2 1701 Charleston Ave. Mattoon, IL 61938 Phone: 217-238-8881 ldlilly@mattoon.k12.il.us

Anne Noble

Senior Vice President Stifel Nicolaus 501 North Broadway

St. Louis, MO 63102

Phone: 800-230-5151 ext. 8488 noblea@stifel.com

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Thank you for your time!

Parts of this presentation contains proprietary information compiled by Stifel

Nicolaus. Reproductions may be made with permission from Stifel Nicolaus.

Please call for Tom Crabtree for permission at 1(800) 230 515, Extension 8457