Mattoon CUSD#2 Presentation Illinois County School Facility Tax Public Act 95-0675 Larry D. Lilly, Superintendent Mattoon CUSD#2
Landmark Legislation for Illinois 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 on May 30, 2007 Recently approved by Champaign County in April 2009 2
Illinois County School Facility Tax Act: County where the CSFT has passed 3
Low Impact on Key Business and Fixed Income Persons 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” 4
Area Sales Tax Rates City Sales Tax Rates Charleston 6.75% Mattoon 6.75% (7.75% in S. Rt. 45 & Broadway East Business District) Oakland 6.25% Champaign 8.75% Urbana 8.75% Effingham 6.50% (7.50% in Ford Ave. Business District) Decatur 8.00% Terre Haute 7.00% (Additional taxes on food, hotel, and gas) Coles County 6.25% Champaign 7.50% County Effingham 6.50% 5 County
Use of Sales Tax Revenues Eligible Capital Projects Ineligible Uses Demolition Buses New Facilities Detached Furniture & Fixtures Additions & Renovations Computers Land Acquisition Moveable Equipment Ongoing Maintenance Operating Costs Architectural Planning Salaries and Overhead Durable Equipment (non-moveable items) Fire Prevention and Life Safety Disabled Access & Security Financing Costs Parking Lots Abatement of Property Taxes Levied to Pay Bonds Issued for Capital Purposes 6
County School Facility Tax (CSFT) Worksheet for Coles County - Abatement Impact Per District A B C D E F G H District 2008-09 Percent Adjusted Adjusted 2007 District Potential Effect of Enrollment of Total Annual Annual EAV Property Tax from Fall CSFT per CSFT Tax Reduction (3) Housing district per pupil Reduction on Report $100,000 (Abatement) (2) Home (1) (4) Charleston 2,664 43.2% $1.921,986 $721 $265,362,473 $0.52 $173.33 Mattoon 3,304 53.5% $2,383,725 $721 $271,994,612 $0.52 $172.93 Oakland 205 3.3% $148,189 $721 $26,245,290 $0.41 $136.47 Total 6173 100% $4,453,900 $563,602,375 (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 7 For additional information please contact Tom Crabtree at 1-800-230-5151 ext. 8457 at Stifel Nicolaus
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. 8
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 9
3-Point Plan for 1% Sales Tax Revenue (Mattoon CUSD#2) Reduce district property tax levy by 1. approximately .52 cents. Approximately $1.5 million annually Pay debt certificates for MHS renovation. 2. Approximately $400,000 annually Maintain existing district facilities. 3. Approximately $400,000 annually 10
Savings Comparison of 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 11
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. 12
Required Language on the Ballot Public Question: Shall Coles County be authorized to impose a retailers’ occupation tax and a service occupation tax (commonly referred to as a “ sales tax ”) at a rate of one percent to be used exclusively for school facility purposes? 13
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 14
Timeline is Critical Target Election: February 2, 2010 Nov. 2009 Feb 2, 2010 Nov. 2, 2010 Election Date Pass Resolution (County Nov. 30, 2009 Aug. 30, 2010 Board or School Districts) Certify the Resolution No later than No later than (County Board) Dec. 3, 2009 Sept. 1, 2010 Election Feb. 2, 2010 Nov. 2, 2010 County Adopt Ordinance No later than No later than and File with IL Dept. of April 1, 2010 April 1, 2011 Rev. to Enact Tax After the County After the County Ability to Sell Bonds Board has Board has Backed by Sales Tax Adopted Adopted Ordinance Ordinance Sales Tax Goes into Effect July 1, 2010 July 1, 2011 Regional Superintendent Approximately 90 Approximately 90 Days after July 1, Days after July 1, Funds from the State 2010 2011 District Receives New October 2010 October 2011 Sales Tax Revenues 15
Will the 1% Sales Tax Sunset? What happens when current bonds retire? Options: Sales Tax Remains for Maintenance and/or Expansion 1. 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. Sales Tax Repealed 2. 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. Property Tax Levy Decreased 3. 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. 16
Outcomes: Eases burden on local property taxpayers 1. Shares school facility costs with others from outside the county, including EIU, LLC, I-57, and county events Supports economic development 2. Reduces property tax burden on businesses considering and locating in Coles County Provides an ongoing revenue stream 3. Pays for maintenance and improvement to facilities Supports quality learning environment for kids. 4. 17
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