A federal judge has ruled in favor of DeKalb School District 428 and dismissed local real estate developer Jim Mason’s lawsuit against the district in which he claimed that the enrollment of up to 1,500 out-of-district students was causing inflated property taxes within the district.
In her written opinion dismissing the case issued Thursday, Chief Judge Rebecca Pallmeyer of the U.S. District Court for the Northern District of Illinois said the federal court did not have jurisdiction over taxing disputes within Illinois. Taxation and its enforcement is left up to the states under the Constitution, she said.
Pallmeyer also ordered the plaintiffs, including Mason, to pay the school district’s legal costs.
“The only fair reading of these allegations is that Plaintiffs are asserting civil rights claims against the validity of a local tax system through a federal lawsuit,” Pallmeyer wrote.
Mike Coghlan, Mason’s attorney in the lawsuit, said that they will file an appeal.
“When the property tax board of review doesn’t allow student residency affidavits to be examined, then the property owners don’t have a state remedy to find or identify the nonresident tuition violators,” he said. “When there is no state remedy it has to be brought in federal court. Anyone modestly familiar with the property tax appeal board and the board of review and property tax assessment knows that a student residency affidavit is not part of that system.”
Because the plaintiffs have not first sought local or state remedies for tax disputes, Pallmeyer said rules mean the federal court does not have jurisdiction in the case.
Greg Davis, another plaintiff in the lawsuit, said in an email Friday that there is no state remedy for the issue at hand.
“The property tax board of Appeals cannot examine DeKalb students Affidavits of residency. Therefore, no state remedy exists. Thus, the case MUST be filed in Federal court,” Davis wrote.
When reached, Mason said he would not comment until he spoke to his lawyer.
The lawsuit, first filed in October 2017, alleged that anywhere between 500 and 1,500 students in District 428 are not residents of the district, with the resulting burden to taxpayers coming to $7.5 million a year.
The lawsuit was first filed by “John Doe,” before a judge ordered the plaintiffs to be named. In addition to Mason and Davis, 13 properties owned by Mason are listed as plaintiffs.
The lawsuit claims that a District 428 administrator coached out-of-district families on how to get their children into DeKalb schools after an August 2017 district board meeting. According to the suit, the administrator told a woman to put mattresses on the floor and, when she said she could not afford all of those mattresses, to put inflatable mattresses on the floor.
The suit claims that, in the days after that meeting, “students were observed sitting on the porches of vacant homes in DeKalb, being picked up by vehicles bearing out of town stickers in their windows and some were walking the streets as late as 7 p.m. before a driver would come pick them up.”
In response, District 428 hired a private investigation firm, Channahon-based National Investigations Inc., to investigate residency of of students. After investigating 20% of the about 6,500 students in the district, the firm reported it had identified about 60 students whose residency was in question.
National Investigations determined that 5.7% of the sample size might not live within the district boundaries. About 50% of those students came from the elementary level, 29.5% came from the middle school level and 20.5% were at the high school level.
The lawsuit asserted that district officials hampered the investigation to check students’ residency, and that administrators coached people on how to respond to questions. The suit sought damages, although no amount was specified other than legal fees, and for the court to order the district to continue working with National Investigations for the next five years.
The suit repeatedly claims the district has concealed 75% of known residency violations.
Mason claims payers of property taxes, such as himself, are losing about $7.5 million each year, and businesses are being driven out of town because of the cost of allowing out-of-district students to attend DeKalb schools.
“DeKalb property taxes are in the highest 1 percent in the nation, due in large part to the [District 428’s] knowing violations of residency laws,” the suit states.