The city can’t afford the kind of property tax increase that could be coming with DeKalb Community Unit School District 428’s bond repayment schedule set to kick into high gear.
If there’s a top priority for the school board, district administrators and anyone concerned about the city’s health going forward, staving off that kind of financial pain – and keeping the repayment schedule as short as possible – should be priority No. 1.
Unfortunately, school board members in recent years have been more interested in ways to spend money than how to combat this looming challenge, and now time – and options – are running short.
The danger stems from a February 2008 referendum approved by more than 63 percent of voters that authorized borrowing about $110 million. The money was spent to construct the new DeKalb High School and Cortland Elementary School, and convert the former high school building into a middle school, among other projects.
The increase to local tax bills began modestly enough, but in order to ease in the increase, the repayment schedule was set up to anticipate growth in property values.
Instead, property values fell more than 25 percent, and now district officials say the owner of a $150,000 home could face steady increases in his or her property tax bills to pay off the debt, increasing from $339 in 2014 to $515 in 2017 and up to $653 in 2028.
That’s in addition to the new revenue that the district likely will want to support its operations. The debt could have been reduced. The district received a $21 million construction grant from the state of Illinois in October 2010, but the schools already had been built by then, and district officials decided they would rather spend the money on other things than ease the burden on taxpayers.
The district also has launched a one-to-one technology program that aims to put computer devices in the hands of all students. It’s a great step toward creating the classroom of the future, but the cost of $8.5 million over five years will exacerbate the district’s budget deficit.
We said in 2014 that grant money that has not been spent should be dedicated to debt service, and that remains the case.
Residents of District 428 didn’t vote for the kind of tax increases now being predicted, or for the extended repayment terms now being contemplated. Although the collapse of the local housing market was unexpected, the district should not expect to continue on as though it never happened any more than its stakeholders can.