Wednesday, November 02, 2005

No to Tax Increases

In yesterday's post I talked about a Bill to better explain referenda increases. Today Eric Olson an Editor in the Northwest Herald has a great piece about the Bill. Our favorite line is "Until they can know for sure, they should be voting no to tax increases."

Tax bill would erase lots of confusion

Our local legislators are working during this week's veto session to win approval of a bill that would simplify school tax referendums and how they affect taxpayers.

I wouldn't advise anyone to vote for another school tax-increase referendum until the measure is approved.

State Rep. Mike Tryon, a Crystal Lake Republican, said he went to Springfield early to work on the bill this week, though all our local state legislators are sponsoring Senate Bill 1682.

The measure has arisen from the troubles that have befallen taxpayers in Huntley School District 158, who in November 2004 approved a tax increase that allowed more than double the rate increase that was advertised. Now that district officials are trying to keep the increase to what originally was intended, they are finding that the district will lose millions in state aid as a result.

Tryon puts the chance of it getting approved during the Legislature's veto session, which ends Friday, at 50-50.

The way the system works now, voters cannot know for certain how large a tax increase they are approving, nor can they tell how much their district will benefit from the increased taxes.

The current law requires tax-increase referendums to ask voters to approve increasing the maximum allowable tax rate. However, tax-cap laws limit the amount of new money schools can collect each year to 5 percent or the rate of inflation, whichever is less. The result is that tax rates tend to decline a little bit every year.

Usually by the time a school district asks for a rate increase, the actual tax rate is less than the maximum allowable rate, which can result in a hidden increase that is difficult to predict.

This new legislation would allow voters to decide on how much to raise their actual tax rate, from what it is at the time to what it would be the next year.

"This problem will go away in all future referendums, but the problem will not go away in tax-cap districts where [a] referendum was already approved," Tryon said. "We're trying to provide a mechanism for a district to be able to manage its tax rate."

The bill also allows our local school boards to propose lowering their maximum allowable tax rates.

This is needed because the state takes the maximum allowable tax rate into account when it decides how much money it gives to local school districts. If a district is not using enough of its maximum allowable rate and is being penalized, voters can correct the problem. And a tax-decrease referendum seems like one that would succeed.

This change in the law should be approved before the next election. Voters have a right to know how much a tax increase really will cost them and how much good it will do for them to pay more. Until they can know for sure, they should be voting no to tax increases.

– Eric Olson is the Northwest Herald's multimedia editor.

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