Wednesday, July 05, 2006

District 99 Tax Referendum Rejection Arguments

A group called Citizens for Responsible Solutions opposed to the District 99 referendum proposed the following reasons to reject the referendum. Their investigation and reasons are a good example for others to follow after they have decided to organize a group and oppose school referenda.

Reasons to vote no:

District 99 Tax Referendum Rejection Arguments
Tax cap issue is a "red herring."  Despite the tax cap, District 99 has already received very significant and repeated inflows of new dollars in recent years.

Due largely to property value appreciation and new construction, total revenues, after tax cap restrictions, grew from $44.2 million in fiscal 1994 to $67.7 million in fiscal 2003.  That is an increase of over $22 million or an average annual revenue increase of 5.3% per year.
Additional funds from referendum/non-referendum bonds and state construction grant totaled $82.3 million.
The district's problem is not their after tax cap revenue levels, but rather their unwillingness to make budget adjustments as the economy goes through non-boom periods.

District 99 has repeatedly demonstrated poor fiscal and administrative management in recent years.

Voters approved $49.5 million for construction and renovation.  Cost overruns (700+ change orders) have brought cost, to date, to nearly $65 million with additional lawsuit expenses still coming.  Final net impact of lawsuits is unknown.
District 99 borrowed $10.6 million they claim has generated income.  In fact, the borrowing expense has exceeded the investment interest rate by several percentage points, costing the district hundreds of thousands of dollars in negative interest rate spread.  They now hope to reduce, not solve, the problem by re-financing $42 million of higher cost bonds.  This will cost several hundred thousand dollars to transact.
District 99 has failed to respond to calls to commit to a mandated balanced budget.  Instead, it has adopted a budget where annual percentage increases for salaries and benefits exceed realistic percentage increases in revenues, resulting in continued deficit spending.
Budget problems have been compounded by practice of spiking salaries just prior to retirement, and refusing to expect administrators to contribute toward insurance costs.
Poor administrative relations with staff contributed to teacher strike that further polarized staff/administration relations.
District issued high cost taxable bonds instead of lower cost tax free bonds under pretense that money would go to cash reserves rather than be used for operations.  Instead, over half that bond money has already been spent.

District 99 has demonstrated poor priorities.

$3500 to $6500 pay increases were just approved in August for most administrators, but sufficient money for textbooks supposedly isn't available.
$2 million has been allocated to buy land at DGN for future parking and sports fields, but science labs, fine arts facility renovations, administrative office space and computer upgrades badly needed right now at DGS have not been funded.
Last spring District 99 spent nearly $25,000 sending 15 administrators and department heads to San Francisco for a four day conference, when sending only 2 or 3 individuals would have been much more appropriate considering district budget problems.

District 99 has not been candid with the community on many issues.

Claimed a "Balanced Budget" that clearly wasn't.
Indicated that referendum rate increase amount being considered was $.05 or $.10.  In fact, it was readily changed to $.15, a 50% increase.  Leadership was either disingenuous or out of touch with their fiscal needs.
Promised to abate back state construction grant money, but ceased doing so after only a couple years.
Didn't address construction/renovation needs at both schools as promised in last referendum.
Makes no mention of salary and benefit role in current fiscal problems even though that area represents at least 80% of their budget!
Finally, using per capita expenditure data in their election materials ignores the fact such data is largely a function of District size, not management efficiency.

This proposed tax increase is excessive as well as potentially harmful to other taxing bodies.

Many families and individuals are currently under great financial stress due to unemployment, high medical costs, college costs, etc.  $150 to $250 more in new taxes is simply unaffordable for these people and elderly on fixed income.
It is unfair to ask for a tax increase before telling citizens the fair value of the Woodridge property, and plans to either use it or sell it after forty years!  "Citizen participation" means more than just asking for an endorsement.  Their own survey shows citizen support of a Woodridge property sale by approx.  a 2 to 1 margin.
There is still about $6 million available in reserve to cover the next two years of projected deficit, plus room to cut non-instructional expenditures such as the administrative budget.
Any true problems related to the tax cap are a statewide problem requiring a state solution, not a bailout by district taxpayers.  Other non-school district taxing bodies seem able to live with the tax cap.
District 99 is already getting one third of our property tax bill.  Tax dollars are not unlimited, and such a large tax increase would seriously jeopardize the growing fiscal needs of other taxing bodies such as District 58, College of DuPage, Villages of Woodridge and Downers Grove, DuPage County, etc.

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