Updated Information about District 97's 2019 Tax Levy

Dear District 97 Families and Oak Park Community,

First, the District 97 Board of Education would like to thank everyone who shared their thoughts and concerns regarding our 2019 tax levy. We deeply value your feedback and believe it is critical as we make important decisions that directly impact our students, staff and the Oak Park community.

During our meeting on Nov. 9, 2019, the board unanimously approved the estimated tax levy for 2019. This action was consistent with the unanimous recommendation received from the Finance Oversight & Review Committee (FORC). The board anticipates adopting the final levy during its meeting on Dec. 10, following the required truth in taxation hearing. 

As we previously shared, the 2019 levy includes $5.3 million in revenue from the expiring Madison Street and Downtown TIF districts, which has been a major component of the district’s financial planning for the past several years. We believe the decision to capture the new growth in these TIF districts will enable District 97 to:

  • Address major capital needs for the safety and maintenance of our buildings without issuing debt;
  • Maintain balanced budgets and fund balances consistent with board policy (three to six months of reserves);
  • Manage the impact of possible legislative action in Springfield, i.e. a property tax freeze or a shift in pension liabilities.

Our goal is to find ways to meet the needs of our more than 6,000 students, while working closely with the district’s administration, financial consultant and our Financial Oversight and Review Committee (FORC) to establish a long-term plan for fiscal stabilization, academic excellence, and safe and quality facilities. We are committed to keeping the community informed and engaged in this process, especially as we work to advance our vision and implement our equity policy.

Below is an update to our original communication regarding the 2019 levy, which includes more information about our long-term capital improvement plan and the decision to capture the TIF revenue. Comments or questions can be emailed to the District 97 Board of Education at [email protected]. The board and the administration appreciate the community's feedback and its continued support of our schools and the students we serve.

- District 97 Board of Education

What is the district’s total tax levy for 2019, and how will it impact taxpayers?

The total levy for consideration equals about $79.8 million. Of the $79.8 million, approximately $4.1 million will come from taxes generated from the expiration of the downtown TIF, $1.2 will come from taxes generated from the expiration of the Madison Street TIF and $376,000 will come from other new taxable property in the district. Previously, the taxes collected in the TIF districts were paid directly into a TIF account held by the Village of Oak Park, which has now expired.  

Additionally, the District will increase its tax levy by 1.9% to those taxpayers outside of the TIF district, which is based on the Consumer Price Index (CPI). As a result, taxpayers outside of the TIF and new property will see an average increase of 1.9% on their taxes due to District 97. For a home valued at $400,000, this represents an increase of about $90 for the portion of the tax bill due to District 97.

The combination of these additional revenues is projected to increase the total tax levy by 9.7% for 2019. However, it is important to note that taxpayers will not see an increase of 9.7% on their tax bills. As stated above, taxpayers outside of the TIF and new property will only see an average increase of 1.9% on their taxes due to District 97.

What is a TIF district?

Tax increment financing (TIF) is a tool used by local governments to encourage economic development in specific geographic areas. At the beginning of the TIF, the equalized assessed value (EAV) is frozen, and taxing bodies within the TIF only have access to the frozen value when tax rates are calculated. As property values increase, all property tax growth above the base amount—the incremental value—is diverted from taxing bodies to be used for redevelopment projects within the TIF district.

At the conclusion of the TIF, taxing districts that were formerly held to the frozen value have one opportunity to capture tax revenues generated from the growth in property values. This is a return on investment for the taxing bodies that have been participating in the TIF for more than 20 years.

How do Oak Park’s expiring TIF districts affect the 2019 levy?

Two of the village’s tax increment financing (TIF) districts—Madison Street and Downtown—are expiring at the end of 2019. When the downtown and Madison Street TIF districts were frozen, their properties were valued at approximately $43.8 million. In 2018, TIF properties were valued at approximately $157.7 million.

The taxing bodies included in these TIF areas, including District 97, have not collected taxes on the property value growth in the Madison Street TIF for over 23 years and in the Downtown TIF for over 35 years. Last year, the taxes generated from this property value growth were about $14.4 million—$5.3 million of which was levied by District 97.

With the TIF districts expiring this year, District 97 has one opportunity to capture the $5.3 million in revenues that we have been unable to collect since the inception of these TIF districts. This action would also preserve the opportunity to capture those revenues in future years. If those revenues are not included in the 2019 levy, that opportunity is lost forever. 

If the district decided not to capture the TIF funds, how would that impact its finances?

Over the past five years, the District has relied on an average of approximately $3 million in TIF surplus dollars to help support its operations. With the elimination of the TIF, that revenue source will disappear. The capturing of the tax dollars from the TIF will replace those lost revenues.

As was stated above, the additional revenues generated from the expiration of the TIF has been a major component of the District’s long-range fiscal planning for several years. If the district elected not to capture the TIF funds in the 2019 levy, it is projected that the district would not be able to maintain fund balance reserves through the six-year projection period without significantly reducing expenditures that directly impact our students and issuing additional debt to pay for critical facility needs defined in our 10-year capital plan. Facility needs include, but are not limited to, repairs, accessibility improvements, classroom modernization, and upgrades and/or installation of temperature control systems. 

The current facility needs contained in the plan are estimated to cost $33 million. These are projects beyond those covered with the referendum bonds. Without capturing the tax dollars from the expiring TIF districts, a large portion of these expenses would have to be paid with additional bond issuances (DSEB bonds), which would increase taxes to our community.  Our current plans are to use revenues generated from the expiring TIF districts, rather than additional debt, to cover these non-referendum capital expenses.

What are the district’s plans for its bond levy?

The action taken by the board in December relates to the non-bond tax levy, which accounts for about 94% of the district's funds. The bond levy will be considered in January or February 2020.

Last year, the board voted to abate a portion of the tax bond levy by about $1.4 million (from $6 million to $4.6 million). If the board decides to structure its new bond issue in a manner that brings the total bond levy back up to $6 million, it would result in an overall tax increase of about 3.6% for taxpayers outside the TIF. This would represent a combined increase of about $190 for a home valued at $400,000 (1.9% increase for non-bond levy in December, plus the potential increase from the bond levy).

We will keep the community informed of our decisions once we have had the opportunity to consider our bond levy early next year. Our decision will include the same analysis we applied to the TIF, focusing both on providing our students and staff with the support that they need  and ensuring the long-term financial stability of the district.