The Oswego School District 308 Board of Education had an initial discussion over a proposed annual property tax levy that includes a 4.99% increase during a meeting Nov. 15.
The district’s property tax levy, as previously described by district officials, is a “best guess of what can be captured in local property tax revenue” by the district. Each year the district requests a levy that is often higher than what is allowed under the Property Tax Extension Limitation Law or “tax cap” in an effort to capture the maximum amount of revenue allowed under the cap. The amount the district will actually receive next year is referred to as its “extension.”
OSD 308′s boundaries fall into three counties: Kendall, Will, and Kane. To receive property tax revenue in the coming year, the board is required to adopt a new levy before the end of the year and file it with each of the counties.
During the Nov. 15 meeting, Chief Financial Officer John Petzke presented the board with information on the levy, which would affect 2021 taxes, payable next year. The district is requesting a levy of $111.8 million to provide revenue to multiple operating funds, but is expecting to receive about $109.6 million in its extension.
The prior year’s extension of $106.5 million as well as the Consumer Price Index from December 2020, are factors in determining the 2021 levy. Unknown factors that are included in that determination include the total Equalized Assessed Value (EAV) of homes and other properties in the district, the limiting tax rate, and the value of new property added to the tax rolls in the district over the past year.
Petzke noted that 61% of the district’s revenue is generated from property taxes and other local sources.
Petzke presented three potential scenarios the proposed 4.99% levy increase would have on a single family home with a fair market value of $300,000 in the district.
He said for a $300,000 home with a stable EAV of $94,000, the school portion of the home’s tax bill would be $5,565. For a $300,000 home with a 10% increase in EAV to $104,000, the school portion of the home’s tax bill would increase $5,637, according to Petkze.
And for a $300,000 home that would have a 10% decrease in its EAV, the school portion of the home’s tax bill would decrease to $5,479.
Petzke also presented the board with data showing the levy’s impact on district finances under different scenarios involving changes to the level in state funding the district receives coupled with changes in the levy.
In each scenario, the district had a positive year-end balance of at least $40 million.
Board member Lauri Doyle, who has served on the board since 2015, said that she had “pause and a little incredulity” in examining the three budget scenarios presented by Petzke.
“Even if we don’t count on the state giving us any new funding like they should, even if for whatever reason we chose not to levy, we’re looking at a $40 million year-end balance with the budget cutting we have done in the past,” Doyle said.
The projections could bring about a “different phase” in what the district can do for students, Doyle said.
“We have spent the last five years taking away (programs and personnel). Even if we don’t get any state extra money, we can still do some things and still have the money that we need to be able to set ourselves right financially,” she said, adding that she was “impressed” by the district’s position.
The extension that will be collected by the district will be determined in spring 2022. The final number will then be collected in the fiscal year ending June 30, 2022 and the other half in Sept. 2022, during the 2023 fiscal year.