Audacious Tax Hike Referendum in Marengo

How would you like to live in Marengo and have your grade school board members ask whether you would allow them to increase part of your tax bill by 3¾ times?

Forever.

That’s the way I read the language on tomorrow’s ballot.

“Shall the debt service extension base under the Property Tax Extension Limitation Law for Marengo-Union Elementary Consolidated School District Number 165, McHenry County, Illinois, for payment of principal and interest on limited bonds be increased from $180,983.80 to $680,983.80 for the 2010 levy year and all subsequent levy years?”

From $181,000 (to round off the numbers) to $681,000.

Pretty audacious, wouldn’t you say?

Asking for a 376% increase on a tax capped levy.

I’m pretty sure what the district is talking about is the measure I fought so hard to defeat in the mid-1990’s.

When the tax cap was passed under Governor Jim Edgar in 1992, I quickly read the bill. When I ran into Illinois Revenue Director Doug Whitley, I asked him if he let the park districts off the hook. I was talking about allowing park districts to continue borrowing money without a referendum.

“They think I did, but I didn’t,” he told me as he walked quickly into the Republican House office complex.

At the behest mainly of park districts, Republican Speaker Lee Daniels and Senate President Pate Philip sponsored a bill to give any local tax district the ability to borrow forever the amount of debt they had issued without a referendum.

(I asked Daniels why he was so bent on repealing this taxpayer protection. “Because park district employees walk precincts for our campaigns,” was pretty much his answer, if not his exact words.)

With my aversion to non-referendum debt, stimulated by our paying about $500 a year extra for the better part of a decade to pay off the golf course bought by our Lakewood village board right before the tax cap went into effect, you can imagine how strongly I felt and feel about the such borrowing without asking the voters first.

So, the grade school in Marengo had $180,983.80 in non-referendum loans outstanding when the revision of the original tax cap legislation went into effect.

That amount has acted as the upper limit on a credit card does. It matters not that it never paid off. The school district has a revolving credit line that the taxpayers have to dig into their pockets to pay the interest.

I am confident that the school board took every dime it could under the law. Virtually every tax district does. (That’s why local governments should be called “tax” districts.)

But, as I read this referendum question, the board wants to be able to borrow almost four times as much…indefinitely.

Passage of this one referendum will allow that.

You don’t have to ask how I would vote if I lived in Marengo or Union.

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Here’s some detail I found about the law on page 61 of this publication:

“Non-referendum bonds (Working Cash, Funding, Fire Prevention and Safety, Tort Judgment, and Insurance Reserve Bonds) may be issued as “limited bonds.” The limited amount of the tax that can be extended to make principal and interest payments on such bonds is determined by each district’s debt service extension base (DSEB). For school districts in Cook and the collar counties, the DSEB is the 1994 levy-year extension (extended in 1995) to make principal and interest payments on nonreferendum bonds. For all other school districts, the DSEB is the amount of taxes for the year in which the referendum is held which make the district subject to the law (extended, collected and distributed in the following year).”


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