Decades Ago Warning of Taxation from Non-Referendum Bond Borrowing

Found this in our basement and thought it might provide background to the borrowing of money by park, school and other tax districts without asking voter permisison at the ballot box.

The Crystal Lake Park District regularly follows this practice in the later part of the year.


Decades Ago Warning of Taxation from Non-Referendum Bond Borrowing — 7 Comments

  1. Unfortunately Cal’s reason was not heeded.

    Now the state is in a death spiral, plummeting to the Big Crash.

  2. The death spiral is only death for political outsiders–ordinary taxpayers too lazy to defend ourselves.

    When property values go negative due to debt and tax burdens, insiders can purchsse title to all Illinois property, and will probably have access to non-recourse low interest loans to do so.

    Then you will see how quick and easy it is to achieve fair and affordable taxation through pension reform in Springfield.

  3. Also, when property tax rates rise from 4% to 12% of fair market value, farmland will no longer be viable planting risk, as property taxes will consume too high a percentage of farm rent to warrant the risk.

    Farmland can be reclassified for property tax purposes if left fallow.

    Productive farmland becomes unplantable at an inflection point of property tax rate that is probable in the foreseeable future of western McHenry County.

  4. Non-Referendum Bonds: An Early Warning

    By Cal Skinner

    One of my failed crusades of the 1990’s was stopping tax districts from getting permission to sell bonds without a referendum.

    When I read the tax cap legislation, I wasn’t sure that goal had been accomplished. I asked Doug Whitley, the head of the Revenue Department if he had let my local park district off the hook and he said, “They may think I have, but I haven’t”

    Bonds would still be sold without a referendum for about six more months, but Chapman and Cutler, the premier bond attorney in the state agreed and the sale of non-referendum bonds would be illegal after the tax cap law took effect.

    The park districts, reading the same language at the end of the bill that had stimulated my question and thinking they still could sell bonds without voter approval, were quite disturbed when they learned of Chapman and Cutler’s “veto” of that authority, based on the new tax cap law.

    The state association of park districts immediately started a campaign to eliminate the requirement of voter approval prior to borrowing money.

    In 1993, the park districts enlisted Pate Philip and Lee Daniels, GOP leaders of the Senate and House.

    Fortunately, Mike Madigan was Speaker of the House.

    Madigan opposed tax caps (keeping the legislature in session into the third week of July the year the bill was passed).

    Now that the tax caps were in effect for the collar counties and causing Republican leaders trouble, Madigan was happy to refuse to let the non-referendum bond bill pass the House.

    I found an ally in the private enterprise fitness centers and convinced their trade association to publish a list of all the legislators who had voted for what I called “the gutting of the tax cap.”

    In 1994, however, the Republicans took control of the House and the Senate and I knew that my campaign to require voter approval for the issuance of bonds was probably doomed.

    I was right.

    The bill that passed gave non-referendum bond authority to not only park districts, but to any tax district that bad outstanding bonds as of 1994.

    That included many school districts, the McHenry County Conservation District and, of course, park districts.

    I asked Lee Daniels why he was supporting a bill that seemed to me to be so anti-Republican.

    His answer was that park districts provided precinct workers for the south suburban state legislative contests that gave us control of the House that year.

    The impact has been devastating to taxpayers.

    As an example, the tax rate of the Crystal Lake Park District would have been cut in half had the bill not passed.

    There was that much tax burden to pay off the non-referendum bonds.

    (The CLPD has continued to re-issue the bonds as they were paid off.

    It has bought so much property from not-for-profit entities that my wife calls it the Crystal Lake Park and Real Estate Company.)

    The bill was not far-sighted enough to please the tax-eaters, however.

    Only the tax districts that had borrowed money without voter approval benefited from it.

    All of the “conservative” park districts looked on in envy and have tried ever since to gain approval for their districts to borrow money without a referendum.

    Now comes the “wipe out” of 2002.

    And, Cook County Board President John Stroeger wants non-referendum bonding authority for the Cook County Forest Preserve District.

    You can see the coalition that will develop, can’t you?

    The suburban Republicans from DuPage and other collar counties will join with the Downstate Republicans and Democrats who have never liked tax caps will join with the Cook County Democrats and the bill will pass.

    It will probably even allow the building commissions of non-home rule county governments to sell non-referendum bonds, the way they used to before the tax cap law passed.

    Governor Rod Blagojevich will, of course, sign a bill that just makes the tax cap “more reasonable.”

    I believe Jim Ryan would have signed it, too.

    I never heard him say anything to make anyone think he wouldn’t.

    So, property taxpayers, be forewarned.

    As early as your next real estate tax bill, you may be taxed to repay money that your local tax district has borrowed without your permission.

    A majority of your local legislators will either contend it was the right thing to do or they didn’t know what they were doing when they voted to further gut the tax cap.

  5. PersonalPAC had a great deal to do with Cal losing a State Rep. primary.

    All the dirty tricks of that long ago race need to be exposed.

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