Oswego School District 308 has failed to qualify for a property tax relief grant offered by the Illinois State Board of Education.
The announcement was made on Tuesday, Jan. 31, as the ISBE announced that 28 out of 373 school districts would receive the grants for fiscal 2019, covering a portion of local property tax reductions up to the statutory limit. The state has allocated $50 million in fiscal 2019 to fund the grant.
The grant request was first presented to the OSD 308 board at its Dec. 10 meeting as one of several possible steps to end its ongoing budget crisis. The district is in its second phase of a budget stabilization plan to overcome a multi-million-dollar deficit.
As presented by Chief Financial Officer Christi Tyler, the grant falls under the Evidence Based Funding formula approved by the state in 2017. It includes a provision for school districts with higher tax rates relative to other school districts with a chance to lower the burden of property taxes placed on homeowners by having the state replace a portion of “foregone” tax revenue with state funds.
During the Dec. 10 meeting, Tyler explained that districts are eligible for the grant if their Unit Equivalent Tax Rate exceeds a certain threshold, though the threshold would not be determined until all applications were received by the state. Abatements were determined by looking at fiscal 2016, subtracting the transportation tax rate from the operating tax rate and multiplying that result by 1.00 percent, the multiplier assigned to unit districts.
According to calculations presented by Tyler, OSD 308's Unit Equivalent Tax Rate would be 4.996 percent, the 267th highest tax rate in the state. The maximum possible tax relief that could be offered to residents would be about $17.86 million, but based on the Unit Equivalent Tax Rate, OSD 308 would only be reimbursed about $16.4 million.
Local state legislators expressed disappointment in ISBE’s decision not to include OSD 308 in the grant. In a press release issued Jan. 31, Sen. Linda Holmes, D-Aurora, and Rep. Stephanie Kifowit, D-Oswego, called for changes to the system used to determine which districts qualified for the grant.
“I’m disappointed our districts won’t have this resource to support local schools and taxpayers,” Holmes said. “Seeing the number and amount of this year’s relief grants, I believe the formula needs some modifications to make the system more fair and equitable going forward.”
“Our still-new evidence-based funding approach is working and bringing more dollars to our schools and statewide,” Kifowit said. “But there is a problem with the formula, and the panel reviewing implementation can expect Sen. Holmes and me to be contacting them with our concerns about the number of grants available for property tax relief for communities like Oswego, whose bills are among the highest in the nation.”
As stated in the release, the state Office of the Comptroller responded Tuesday to Kifowit and Holmes’ inquiries regarding the status of payments to the district for its EBF base funding for fiscal 2019. Kifowit and Holmes were told that the comptroller’s office is making those payments on time twice a month, and made their first mandated categorical quarterly payments this week, 20 days earlier than last year. Those payments had been delayed by 121 days due to other demands on the state’s coffers.
At the Dec. 10 meeting, board members expressed concern over the formula used to determine which districts would qualify for the grant, as the multipliers varied for different districts, with high school districts using a higher number than K-12 districts like OSD 308.
“That placed a lot of one-school school districts ahead of us on the list, even though we actually have a higher tax rate,” Vice President Lauri Doyle said.
Twenty of the 28 qualifying districts are high school districts, with at least half of that number located in Cook County or the Chicago suburbs.