State Rep. candidate Steve Reick nails the evidence that State Rep. Jack Franks voted for legislation that resulted in higher property taxes in an article Reick published on his web site yesterday.
The Shell Game
Posted on August 7, 2016 by Steve Reick
**UPDATE** Last week Governor Rauner signed H.B. 5529 into law. I’m disappointed that the Governor didn’t veto this bill. These intra-fund transfers are little more than a shell game which allows school districts to over-levy in one fund knowing full well that the funds would be transferred to a fund that’s levy could not be increased.
H.B. 5529 is Exhibit A to the argument that we need a complete overhaul in the way we pay for education, putting the responsibility on the State for education funding, as prescribed in the Illinois Constitution.
On April 20, the McHenry County Blog posted a story about a bill (H.B. 5529) which, according to Tim Dwyer, an attorney who successfully brought a tax protest suit against Harrison School District in Wonder Lake:
“This bill allows school districts to transfer money via intra-fund transfers between the Educational Fund, the Operations and Maintenance Fund and the Transportation Fund. It can be found at Section 5/17-2A of the School Code.
Originally adopted in the 1960’s, the Intra-fund Transfer Section originally provided for a one-time intra-fund transfer for unforeseen, non-recurring expenses.
In 2001, it was amended to allow any transfer for any reason until 2003. Since that time (2003), it has been extended five times. H.B. 5529 seeks another three-year extension and passed through Committee unanimously (22-0, with 7 members absent).”
Further quoting Attorney Dwyer:
“(T)his bill allows (taxing bodies), and has allowed for 16 years…to circumvent the taxing requirements of the School Code and PTELL. One perfect example in McHenry County is Harrison School District 36 in Wonder Lake.
School District 36 had amassed 3.6 million dollars in its Transportation Fund when its actual Transportation costs were $337,000 annually.
Under normal circumstances, District 36 would have so much left in its Transportation budget that it could not, legally, adopt a levy for its Transportation Fund until such time as that fund was reduced.
This, of course, would have saved all taxpayers in District 36’s tax code 20% of future tax bills.
But under Section 5/17-2A, District 36 transferred its excess transportation funds, an amount in excess of three million dollars, to its Education and Operations and Maintenance Funds.
In its 2015 levy, District 36 levied for Transportation funds.”
The bill passed overwhelmingly in the House (108-4).
The Blog posted the roll-call of the vote, and Jack Franks was one of the 4 dissenting votes. Good for him.
However, since this provision has been routinely extended for a number of years, I thought it would be instructive to see if Franks has been a consistent “No” vote on this obvious attempt to keep our real estate taxes from ever coming down.
And what do you think I found?
As far back as votes are registered on the Legislature’s website, Jack Franks has voted for the extension.
He voted for it in 2003, 2005, 2007 and 2010. In 2013, he not only voted for it, he co-sponsored the bill!
I find it ironic that this is the same guy who couldn’t wait to post a press release about a bill he sponsored which he claims will stop PTELL increases.
He actually had the gall to say: “[t]he system is broken. It means government doesn’t have to be efficient. When our citizens have less, our government gets more. And that’s not fair.”
What’s not fair is to have a representative who votes 5 times for an extension of a bill that allows taxing districts to rob Peter to pay Paul, allowing them to stockpile hordes of cash, allows it to be used for unintended purposes and then sponsors a “freeze” bill intended to both hide his past votes and to keep that system in place.
That’s hypocrisy, pure and simple.
Reick knows he’s not running against Franks anymore, right?
Alabama
Consider it a public service announcement
Thanks to Steve & Cal !
Well this IS fascinating info.
Just shows people how dazed
& confused Franks is, co-sponsoring, voting for this bill 4 X’s (or 5) & then
Voting against it.
But, when you are bought by so many
Various groups (numerous teachers
Unions) etc., because of campaign contributions, what is best for district
TAXPAYERS where you came from is
Totally UNIMPORTANT.
Just remember Mchenry county voters
& taxpayers, Jack Franks has approximately $572,000 (+ or -) in his campaign donation chest NOW.
Don’t allow your votes to be bought
By slick flyers, media disinfo, public
Appearances & more.
**Don’t allow your votes to be bought**
You said the same thing when Bruce Rauner bought the Governor’s Office, right?
Alabama, you have me confused
With someone else.
I only started reading & posting on
The blog in april.
Didn’t know my words were similar
To anyone elses ?
Just came out of my thoughts that
Way, seriously.
We will only be in for more tricks and dirty deals if Jack is elected to be county chairman!
Go Steve!
Is Jack Franks an Alinskyite?
* RULE 1: “Power is not only what you have, but what the enemy thinks you have.” Power is derived from 2 main sources – money and people. “Have-Nots” must build power from flesh and blood. (These are two things of which there is a plentiful supply. Government and corporations always have a difficult time appealing to people, and usually do so almost exclusively with economic arguments.)
* RULE 2: “Never go outside the expertise of your people.” It results in confusion, fear and retreat. Feeling secure adds to the backbone of anyone. (Organizations under attack wonder why radicals don’t address the “real” issues. This is why. They avoid things with which they have no knowledge.)
* RULE 3: “Whenever possible, go outside the expertise of the enemy.” Look for ways to increase insecurity, anxiety and uncertainty. (This happens all the time. Watch how many organizations under attack are blind-sided by seemingly irrelevant arguments that they are then forced to address.)
* RULE 4: “Make the enemy live up to its own book of rules.” If the rule is that every letter gets a reply, send 30,000 letters. You can kill them with this because no one can possibly obey all of their own rules. (This is a serious rule. The besieged entity’s very credibility and reputation is at stake, because if activists catch it lying or not living up to its commitments, they can continue to chip away at the damage.)
* RULE 5: “Ridicule is man’s most potent weapon.” There is no defense. It’s irrational. It’s infuriating. It also works as a key pressure point to force the enemy into concessions. (Pretty crude, rude and mean, huh? They want to create anger and fear.)
* RULE 6: “A good tactic is one your people enjoy.” They’ll keep doing it without urging and come back to do more. They’re doing their thing, and will even suggest better ones. (Radical activists, in this sense, are no different that any other human being. We all avoid “un-fun” activities, and but we revel at and enjoy the ones that work and bring results.)
* RULE 7: “A tactic that drags on too long becomes a drag.” Don’t become old news. (Even radical activists get bored. So to keep them excited and involved, organizers are constantly coming up with new tactics.)
* RULE 8: “Keep the pressure on. Never let up.” Keep trying new things to keep the opposition off balance. As the opposition masters one approach, hit them from the flank with something new. (Attack, attack, attack from all sides, never giving the reeling organization a chance to rest, regroup, recover and re-strategize.)
* RULE 9: “The threat is usually more terrifying than the thing itself.” Imagination and ego can dream up many more consequences than any activist. (Perception is reality. Large organizations always prepare a worst-case scenario, something that may be furthest from the activists’ minds. The upshot is that the organization will expend enormous time and energy, creating in its own collective mind the direst of conclusions. The possibilities can easily poison the mind and result in demoralization.)
* RULE 10: “If you push a negative hard enough, it will push through and become a positive.” Violence from the other side can win the public to your side because the public sympathizes with the underdog. (Unions used this tactic. Peaceful [albeit loud] demonstrations during the heyday of unions in the early to mid-20th Century incurred management’s wrath, often in the form of violence that eventually brought public sympathy to their side.)
* RULE 11: “The price of a successful attack is a constructive alternative.” Never let the enemy score points because you’re caught without a solution to the problem. (Old saw: If you’re not part of the solution, you’re part of the problem. Activist organizations have an agenda, and their strategy is to hold a place at the table, to be given a forum to wield their power. So, they have to have a compromise solution.)
* RULE 12: Pick the target, freeze it, personalize it, and polarize it.” Cut off the support network and isolate the target from sympathy. Go after people and not institutions; people hurt faster than institutions. (This is cruel, but very effective. Direct, personalized criticism and ridicule works.)
Illinois School District Budgets for Dummies
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Chapter 1: The Stealth School District Tax Hike Law
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Key concept 1:
– The Transportation Fund has no tax rate limit (uncapped fund).
– The Education Fund has a rate limit (capped fund). The exact limit depends if the school district is a unit district (4%), high school district (3.5%), or elementary district (3.5%).
Sidebar – Consolidating a high school district and an elementary district to a unit district allows the new unit district to hike taxes by using the higher tax rate.
Source for maximum tax rates: Illinois Department of Revenue, Fund Max Rate and Statute Reference.
++++++++
Key concept 2: Permanent Interfund Transfer
Permanent meaning it is not a loan from one fund to another, rather, a permanent transfer.
Interfund meaning between two funds, from for instance, the Transportation Fund, to the Education Fund.
++++++++
In government and non-profit accounting, a “fund” is a mini budget within the overall budget.
Three such funds in Illinois school districts are:
– Education Fund
– Operations and Maintenance Fund
– Transportation Fund
The school district permanent interfund transfer law applies to these three funds.
+++++++++++++++++
Using a specific example, funds are transferred from the Transportation Fund to the Education Fund.
Administrator and teacher salary and benefit hikes come from the Education Fund.
+++++++
Restating key concept 1:
– Education Fund is capped.
– Transportation fund is uncapped.
+++++++
What if the administrators and teachers want bigger pay and benefit hikes than the maximum tax rate in the Education Fund allows?
+++++++
Choices are:
– If the school district’s Education fund is under the statutory maximum tax rate, it can hold a referendum to hike the tax rate.
– Increase the Transportation Fund rate, and transfer the resulting tax revenue to the Education Fund.
– Issue working cash bonds, and perform a transfer from Working Cash Fund to the Education Fund.
++++++++++
What was the rational behind allowing permanent interfund transfers?
Something along these lines:
Lobby legislators and the Governor to pass a “temporary” law allowing inter-fund transfers.
Justify the transfers by stating they will allow the school district to get out of a budget crisis, and the law will only be in effect for 3 years at which time it expires.
When the law expires, extend the law for another 3 years, and do not issue a press release explaining the scheme.
Do this repeatedly.
+++++++++++
In 2003, 2005, 2007, 2010, & 2013, Jack Franks voted for legislation extending the use of the budget gimmick known as permanent interfund transfers.
+++++++
Here are the funds allowing permanent inter-fund transfers:
– Educational Fund
– Operations and Maintenance Fund
– Transportation Fund
+++++++++++++
The following is a list of funds used by Illinois School Districts, preceded by an assigned code.
10 Educational
20 Operations and Maintenance
30 Debt Service
40 Transportation
50 Municipal Retirement / Social Security
60 Capital Projects
70 Working Cash
80 Tort
90 Fire Prevention & Safety
+++++++++++++
Jack Franks PACs have received $394,517 contributions from teacher unions.
Jack Franks PACs have received $1,033,910 contributions from all unions.
Typo.
– If the school district’s Education Fund is at the statutory maximum tax rate, it can hold a referendum to hike the tax rate.
House Bill 5529 passed the Illinois General Assembly (ILGA) on May 24, 2016.
++++++++++++
Short Description of HB 5529: SCH CD-INTERFUND TRANSFERS
+++++++++++++
Synopsis as Introduced:
“Amends the School Code.
With respect to a school district other than the Chicago school district, provides that through June 30, 2019 (instead of June 30, 2016), surplus life safety taxes and interest earnings thereon may be transferred to the Operations and Maintenance Fund for building repair work.
Extends the time period during which a school district other than the Chicago school district may transfer moneys from specified funds for any purpose from June 30, 2016 to June 30, 2019.
Effective immediately.”
+++++++++++
There were no:
– Committee Amendments
– Floor Amendments
+++++++++++
On August 5, 2016, Governor Rauner signed HB 5529 into law as Public Act 99-0713 (PA 99-0713).
Mark I had a thought . . . watching Chicago gives me great concern for McHenry County. If you converse with those on the South or West Side and ask why can’t you do anything about the Crime, etc. and I was told it is because of “White Privilege”.
Had to think on that for a day or two . . . maybe it is the Elitist mentality, that knows the LAW and how to use it to their advantage, therefore “White Privilege”.
Jack has learned well from Chicago and Springfield and the Board had no idea what was being done and will be done.
Good Luck!