McHenry County College’s Board of Trustees discussed next year’s budget against last night at its Committee of the Whole meeting.
Three members lined up on the side of keeping the tax levy flat next year.
They are (in alphabetic order)
- Chris Jenner
- Molly Walsh
- Tom Wilbeck
Perhaps not coincidentally, they were all elected in this past spring’s election. They beat two incumbents.
Chief Financial Officer Bob Tenuta offered his “best guess estimates” on next year’s budget, which he said had to be passed by next month.
Bob Tenuta
He assumed the budget would include the 1.7% inflationary increase allowed by the Property Tax Cap.
He also suggested levying enough to capture all of the new growth, which he estimated would be $78 million, based on $50-70 million of new construction over the last several years.
“If we don’t take it…that’s lost forever,” he said.
He asserted it was “better to err on the high side.”
“It’s easier to bring the budget down that to bring it up,” he continued.
“Last year we levied $29 million,” Walsh observed.
Under questioning from Jenner, Bob Tenuta recommended asking for a 3.5 to 4.5% levy increase.
1.7% of that represents the maximum amount allowed under the Tax Cap. The 1.8 to 2.8 percentage points above that level would be to capture the new growth. It has not been that high for the last five years.
Tenuta did not mention the increases in new growth over the past decade, but you can see it below:
Year New
2012 0.5%
2011 0.4
2010 0.5
2009 1.1
2008 1.6
2007 2.3
2006 3.2
2005 3.8
2004 4.2
2003 4.3
“You’re going to base your budget…on the levy amount,” Jenner pointed out.
Last month Tenuta recommended a 4.99% increase. That’s just under the level when the college would have to publish a big, black-bordered ad and hold a special public hearing.
Tenuta mentioned several times that taking less than the maximum amount would “cause the college to go into more deficit spending.”
“I’m for a flat levy,” Wilbeck stated.
“The people who voted me in want restraint.
“I think that’s a good step forward.”
Walsh said that the decision should not be what we can get, but “I think the question is what do we need?”
“As a taxpayer…I’d like to see it go down,” Board President Ron Parrish added.
“I really have to reserve my decision until Bob presents the budget next week”
“We need to stay fiscally responsible. I certainly don’t want to be deficit spending.”
Walsh criticized Tenuta for not presenting a flat budget alternative.
“When we asked you to do a flat budget, you didn’t give us anything,” she said. “What we want to see is what effect a flat tax will have on expenditures.”
“If we have to cut the budget $675,000 [the amount that the unrealistic assumption of a 4.99% increase in property taxes would yield]…we would do it on a transfer or on the contingency [fund].
“Otherwise I’d have to get into the departmental operating budgets.
College President Vicky Smith echoed Tenuta mantra about losing the money if it were not levied.
“The cost of inflation has occurred,” Tenuta pointed out.
When Walsh asked what assumptions were used for inflation, Smith replied, “It’s in the report.”
[The report was not posted on the internet prior to the meeting.]
“I’m seeing a negative trend,” the MCC Chief Financial Officer explained, adding that the college could not anticipate level funding from state government next year.
“If we don’t take advantage of the 1.7% [under PTELL, the official name of the Tax Cap]…you can never get it back,” Smith interjected.
“We can never capture it. It is forever lost.”
“I just don’t agree,” Walsh replied.
“The expenses are the expenses,” Cynthia Kisser said. “If we have less coming in, the expenses cannot be cut much lower.
“It’s our future that’s going to get cut.”
Walsh explained that the Tax Cap was passed because “taxing bodies refused to limit the amount they could tax.
“They taxed to the mas.
“Now, it’s kind of reversed.
“How can you explain to people that their property taxes are going up as their home values is going down?
“I think we can manage.”
“It’s way too easy to punish the property taxpayers for the sins of the state,” Jenner said.
“For the last six years, we’ve taken in $30 million more than we’ve spent.
Rebutting the administrators’ argument about losing the money forever, Jenner said, “If we take it, the taxpayer loses it forever.
Linda Liddell pointed out that having extra money available allowed the college to apply for grants which had matching requirements.
“The levy conversation is going to be really meaty this year.”
Commenting on the accumulation of funds, Jenner pointed out, “If we continue, we won’t have to got to the taxpayers [for building referendums].”
Liddell explained that the percentage of their tax bills that taxpayers pay to MCC “is so small I should be making a donation…which I do.”
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To send the same email to all Trustees, go to this page.
I do not understand the logic of “We’re taking in $5 million more in taxes than we spend every year, but we have to keep doing it because someday we might need the money.”
If put pencil to paper and do the calculations you will find that with a flat levy and inflationary rates of spending increases the College could go several years before they incur a deficit.
“The expenses are the expenses,” Cynthia Kisser said.
“If we have less coming in, the expenses cannot be cut much lower.”
And therein lies the crux of the problem at MCC.
It’s in this type of thinking.
Of course, expenses can be cut much lower. Look at the salaries of the instructors and teachers.
Do a course-by-course analysis and set the teacher’s compensation (pay + benefits, separately) alongside.
Replace some of the highest-paid teachers with new teachers who are perfectly capable to conducting remedial math and reading class (which the high schools should have been teaching properly, so that a remedial college class wouldn’t even be necessary).
I agree with the fiscal conservatives. Why take in funds when the taxpayers need the money?
Gus has a great idea. In some areas of academia the most senior teachers are very highly paid and may be doing less work than the newer teachers. A cost-benefit analysis is certainly warranted.
IF as mentioned above, if MCC is taking in 5 million more than needed why are we levying higher taxes? There is always room for expense cutting. If the economy is bad and the school is short of funds WHY is there so much construction going on? It cost many millions to refurbish the college. Was it done ‘because the money was there’? Spend it or lose it?
We elected new board members because we wanted change and more fiscal conservatism. We don’t need more and higher taxes. Illinois now wants a ‘progressive income tax’ meaning those who do work pay more and more. That will drive more higher wage earners and businesses out of the state and the state legislature will raise our income and property taxes even more.
Enough!!!!!!
We elected fiscal conservatives. We don’t want or need new taxes. The villages, cities, counties, college boards, school boards will have to make due with less. We aren’t getting any more money from our jobs and the state of Illinois want to pass a progressive income tax and tax us even more!!!! No more higher property taxes while our values continue to plummet.
Want everyone who works to move out of state? Higher taxes is certainly a way to attract new businesses let alone scare the current ones out of state!
The more money the taxpayers give education entities, the more the entities will spend and still whine and get aggessive for more no matter what tactics it takes. Did I mention the poor quality of education is never their fault but when successful people and parents get involved the outsiders’ ways are deemed as wrong or hovering and crossing educational turf?
Even though other businesses have cut back on everything over the years as technology changed, the education entities grow themselves bigger. Why? Because we let them.
Enough already with slickly stashing funds away so you can build, etc. without permission from the people who foot the bills. WE are the employers and I sure hope most people catching on. Ignore the guilt trip promos and trips down memory lane of crayons and teachers with warm smiles, etc.