The Woodstock School District Tax Protest

From Woodstock’s Susan Handelsman:

UPDATE ON TAX RATE OBJECTION LAWSUIT AGAINST WOODSTOCK D200

1. Attorney Tim Dwyer is filing a tax objection, and plaintiffs have until late October to join the suit.

Recovery amount for each plaintiff is expected to be around 5% of property tax bill. No legal fees are risked by plaintiffs; in case of a successful suit, attorney will be paid half the amount recovered as fee.

2. Woodstock D200 has taxed millions of dollars for non-transportation purposes in the Transportation Fund, for the stated purpose of transfer to the rate-capped Ed Fund and Ops & Maintenance Fund.

Transportation Fund Levy went from $1.4 million in 2011 to $5.4 million 2015 (last year).

Furthermore, the District has raised its Special Ed Fund taxation from $568,481 in 2011 to $5.74 million in 2015.

Special Ed spending on medical personnel generates Medicaid reimbursements, which are treated as revenues in capped Ed Fund. Out-of-district Tuition revenues are treated as revenues in Ed Fund (NOT Special Ed Fund).

In effect, the District has an incentive to invite out-of-district special ed students to be educated at local taxpayers expense, while the tuition paid is made available for liberally-defined general Ed Fund spending (evading tax rate caps).

If the school wants to raise the tax rate cap on Ed Fund, one assumes they can easily obtain such legislation from friendly Springfield elected ‘representatives’.

In the meantime, the Ed Fund is capped at 4% of EAV, and schools all over Illinois manage to get along within that levy rate maximum.

Woodstock property-taxpaying homeowners are paying an obscene 4.6% of total home fair market value, as a result of tax rate cap evasion techniques such as those described above.

3. Look at comparative spending at D200 2011 and (last year) 2015. In just four years, they have increased spending by incredible amounts with nearly flat enrollment:

Average Daily Attendance reported to ISBE: 2011= 5873, 2015=5918 (45 more students. Remember these figures include ~200 Pre- Kindergarten, with annual costs (per Montessori equivalent tuition) under $2500/year.

Levy 2011: $55.2 million 2015: $58.8 million

GSA (General State Aid) 2011: $5.4 million 2015: $15.9 million

Let that sink in. This school has levied an additional $3.6 million at the same time they received an additional $10 million State Aid. ANNUAL additional $10 million!

Where is this money being spent?

44% increased IMRF and Social Security Find spending: 2011 IMRF&Soc Sec Funds expenditures: $918,179 2015: $1,318,376

Tort Immunity Fund: 2011: $0 2015: $796,000 ???????????? (Budget is only so specific, by law. This is why it is important to obtain specific information from school board, so citizens may scrutinize and look for anomalies).

4. The new budget will be voted in this Tuesday night at 7 pm at Clay Academy in Woodstock.

Clay Academy is an old building which is the subject of a large capital expenditure this year, an expenditure arguably in excess of the building’s total value. This building has 70 students. For many years until recently, it had 40 students. Enrollment capacity for the building?

****************************300 STUDENTS************************************.

That means, the building is being run at full capacity expense of utilities, maintenance, and staff… but with only 23% of enrollment capacity attendance.

5. Can Woodstock afford to be this wasteful and inefficient?

One might expect to spend more for good results, or if money is no object. Is that the case here in Woodstock?

D200 graduates students at a rate of below 50% College Ready.

Median Income households in Woodstock (living in median value homes) are spending over 12% of household income JUST IN PROPERTY TAXES!! Compare that to national average household income percentage expenditure on property taxes according to BLS (Bureau Labor Statistics): under 4%! Average Americans are ‘allowed’ to save 8% MORE of household income for, say, children’s’ college funds, while Woodstock parents are not—-Woodstock parents have to give that extra 8% of household income to D200 (And Woodstock City, and McHenry County).

6. Further damage caused by profligate spending?

Academic research indicates that excessive property tax rates are capitalized into home values. That means, OUR homes are worth less and less every year relative to homes ANYWHERE but here. (No escape if you lose a spouse or a job or simply want to move).

Homeowners here have an incentive to let home values deteriorate rather than improve and be taxed at 4.6% of fair market value (National average property tax rate is 1.4% of home value. Why spend money on home improvements when homes here deteriorate in value simply as a result of excessive property tax rates?).

Less discretionary income per household to spend at local businesses, causing further economic deterioration.

Existing businesses hurting, destroying jobs, New businesses demand tax breaks and TIFs and other destructive economic incentives, driving tax rates even higher.

7. What can we do to protect ourselves?

  1. Join Tax Objection Suit.
  2. Attend school board meeting Tuesday night.
  3. Run for school board, or call your school board member and ask them why are they doing this to us?

QUESTIONS?

Susan Handelsman
fourto5@aol.com
815-540-7526


Comments

The Woodstock School District Tax Protest — 23 Comments

  1. I can almost hear the Blood sucking wanna-be politicians whine now —-

    ‘But it’s for the Children’

    Bullshit !

  2. No cost to join the suit.

    If the suit is successful, meaning the school district wrongly took your money, you get some of your money back.

  3. It’s even better if you live in a condo-townhouse association, isn’t that right Susan?

  4. Percentage Increase in Woodstock CUSD 200 from 2011 to 2015:

    Transportation Fund Levy: 285% ($1,400,000 to $5,400,000).

    Special Education Fund Taxes: 909% ($568,481 to $5,740,000)

    Average Daily Attendance: .7%, which is seven tenths of 1 percent (5,873 to 5,918)

    Levy: 6.5% ($55,200,000 to $58,800,000)

    General State Aid (GSA): 194.4% ($5,400,000 to $15,900,000)

    IMRF & Social Security Fund Expenditures: 43.5% ($918,179 to $1,318,376)

    Tort Immunity Fund Budget: Infinity % ($0 to $796,000)…purpose is for anticipated taxpayer lawsuit due to illegally transferring funds from the Transportation Fund to the Education Fund?

    +++++++++++

    Woodstock Independent

    District 200 Withdraws from SEDOM

    by Elizabeth Harmon

    October 2013

    http://www.thewoodstockindependent.com/October-2013/District-200-withdraws-from-SEDOM

  5. State Contribution to TRS (teacher and administrator pension fund) on behalf of CUSD 200 for Fiscal Year 2015 (FY 2015), which is year ending June 30, 2015: $17,004,963.

    Source: page 69 in Adobe pdf of FY 2015 CAFR, which equates to page 41 of the paper document.

    The CAFR terminology is, “On-Behalf Contributions to TRS”

    ++++++

    Employer Contribution to TRS for 2.2 formula change for FY 2015: $208,357.

    That is the .58% (a little over one half of 1 percent) employer contribution to TRS.

    Which is the normal employer contribution to TRS.

    +++++++

    Employer Contribution to TRS for Federal and Special Trust Funds for FY 2015: $525,498

    +++++++

    Employer Contribution to IMRF for FY 2015: $1,572,493

    Source: page 75 of pdf of FY 2015 Woodstock CUSD 200 CAFR.

    +++++++

    Total Woodstock CUSD 200 Employer Contributions to public sector pension funds in FY 2015, including State of Illinois on-behalf of school district contribution (adding the above figures): $19,311,311
    ++++++++

    General State Aid (GSA) education funding from State of Illinois to Woodstock CUSD 200 for FY 2015: $10,968,842.

    Source: FY 2015 CAFR.

    note: this figure differs from Susan’s figure of $15,900,000.

    Original source of $15,900,000 was?

    ++++++++

    Using either figure, taxpayers are paying more for pension contributions than the primary state funding for educating students.

  6. The priority of public education in Illinois is pensions.

    Not educating students.

    Money talks.

  7. Mark, D-200 has added the use of the Fire Prevention/Safety Fund and the Tort/Immunity Fund over the last few years as a means to circumvent the Ed Fund Tax Cap of 4%.

    Those expenses used to be reported in the Ed Fund and were paid for primarily by the Ed Fund Levy.

    Now those expenses are pulled out separately into their own fund and levied for separately while the Ed Fund remains at its Max Levy amount of 4%.

    The Fire Fund added an additional 0.1% of Cap space ($450K in the FY15 Levy) and the Tort Fund ($800K in the FY15 Levy)is uncapped.

    So, not only did D-200 try to circumvent the tax cap provisions by the repeated use of fund transfers to the Ed Fund.

    They used accounting games to add more two new Funds that would not be subject to the Ed Fund Tax Cap.

  8. Mark, Susan’s $15.9 million GSA total is actually the GSA Entitlement Amount for current year (FY17).

  9. mark:
    page 12 of proposed budget books 2012 and 2016 (which I had to obtain from school district admin office.

    But that has since been corrected since due to your recommendations D200 has agreed to post agenda packets online!

    Thanks also to Paul Serwatka on the assist!)

    page 55 of budget book distributed at last night’s school board meeting.

  10. Homeowner associations joining suit mean more individuals, and add more weight to the message to school board that their power to tax beyond the means of our community will at least be limited by forced adherence to existing laws meant to protect taxpayers. (Restricted Fund rate caps, for example).

  11. The statistical argument in Item 5 is number-smithing at it’s finest.

    Every state’s educational spending model is different, with Illinois nearing the top of the list for high reliance on property taxes.

    The argument compares apples and acorns.

    If you’re going to do an equitable comparison, take the 5 to 10 states with similar high reliance on property taxes.

    Instead, the argument is sandbagged by those states with low reliance on property taxes (they typically have a high reliance on income and/or sales tax instead) – hence your 4% number and the “allowed savings of 8%” hogwash.

    I’ll bet that 8% disappears quickly because of higher sales taxes, use fees and state income taxes.

    POOF!!

    GONE!!

    I applaud you for your stance and advocacy, but at least argue with sound statistical numbers rather than number-smithing the argument.

  12. Ideally all revenues dedicated to public education would be included along with an additional comparison of taxpayer obligations for unfunded pension and retiree healthcare, bond debt, unpaid bills, and other obligations.

    Illinois spends pretty heavily on education.

    It varies by school district due to heavy reliance on property tax revenue.

    But where property tax revenue is lower, state subsidies are higher.

    Illinois is very high for unfunded pension and retiree healthcare, bond debt, and other obligated taxpayer dollars.

    The benefit hikes to underfunded pensions and diverting pension funding to salary hikes (which in turn hikes the pension contribution and ultimate oension payout) and other uses has resulted in even more nderfunded pensions and more taxpayer money to pension funding and more underfunded pensions.

    This has resulted in investment returns short of actuarial projections if pensions were fully funded.

    The taxpayer makes up 100% of th shortfall in investment returns due to underfunded pensions.

    The employees contribute zero dollars due to underfunded pensions.

    The employees receive financial benefit from hiked salaries from diverting pension funding to salary hikes.

  13. As I’ve commented often before, most recently to Dick on a different post, that I’m eager to see specific research refuting assertions.

    As you know, there’s is a dot.gov website on education finances which compares peer schools’ revenue sources, as well as categorical expenditures, across the whole country.

    And Woodstock D200 stats are appalling.

    I think when you have time to look at such things you will be most enlightened.

  14. Here’s a couple links for you to mull over.

    I have read many others, but cannot locate them quickly.

    In the meantime, your assertions about looking at the state are skewed just because of CPS alone.

    Illinois is a conglomeration of Chicago, suburban and rural (districts south of outside a 50 mile radius).

    Illinois’ state funding formula as it stands today, does not apply to Chicago; they have their own formula.

    Also, there’s a **TON** of TIF districts in Chicago (arguably between 25-33% of the city lands) that are TIF’d.

    I’ve been to the main ed.gov site as well as the National Center for Educational Statistics, and the U.S. Census site, plus a few others many times over.

    I intentionally shy away from sites and stats that get their data from the NEA or IEA.

    Quite honestly, I don’t trust numbers supplied by the teacher unions.

    Furthermore, I understand your assertions about “D200’s stats being appalling”.

    What I’m trying to convey repeatedly is that when comparatively painting with a broad brush, you need to do so carefully and logically.

    Comparing state averages are meaningless to me because they are so macroscopic and typically fail to account for costs of the living, plus Illinois’ stats are watered down by Chicago.

    Comparing Woodstock to national averages – even more meaningless, for the same reasons.

    IMO, the extrapolation to that macroscopic level fails miserably because it assumes all factors are equal when obviously they are not.

    That said, I like to look at numbers that are more of a “per capita” nature: revenue per student, expenditure per student, for starters, then layer it by local/state/federal revenue per student.

    I like to see the types of economic generators are in a community (corporate to residential ratios), because of the tax burdens those demographics bear, as well as the age of communities.

    These are complex puzzles.

    And because you are trying to make a legal point, your desire to post supportive citings are self-serving.
    —-
    https://www.cityofchicago.org/city/en/depts/dcd/provdrs/tif.html

    https://www.evernote.com/shard/s118/sh/3c585f33-36ff-4f5d-b007-05d03a34d5c0/37906e36b928da89/res/037222ff-1884-4a2a-82c1-fd12fbeb6704/The%20Property%20Tax%20-%20School%20Funding%20Dilemma.pdf

    http://www.ncsl.org/research/education/funding-approaches-the-property-tax-and-public-ed.aspx

  15. Every single study I have seen to date lowballs Illinois spending on public education because they do not include the aforementioned state contribution to the TRS pension fund for teachers and administrators.

    That is state revenue, not property tax revenue.

    As mentioned above, fo Woodstock in 2015, the state pension contribution to the teacher and administrator pension fund, is about the same as the state funding to the school district for Gebneral State Aid (GSA).

    GSA is the primary state funding to public schools.

    Other state funding for public schools, the so called categoricals, includes transportation, and special education.

  16. “when comparatively painting with a broad brush, you need to do so carefully and logically.”

    This is my frustration with your rebuttals.

    There are no specifics, only broad dissatisfaction expressed by aspersions such as ‘number-smithing’.

    I include comparisons to State, national, and local average rates as both source citations and as a way for people to have insight into meaningful relativity (Woodstock’s 4.6% property tax rate might not seem obscene until people realize that is triple the national average, for example).

    I ask you to engage on a meaningful level so we may accomplish change rather than waste time with academic debate.

    (Complex puzzles in Illinois seem to be complex by design to encourage the attitude that we must tolerate status quo, because somebody smarter than us designed it and so it must be equitable).

    Many posts over the years contain specific calculations about household income spending in Woodstock.

    Let’s focus on that specific; let’s define a ‘typical’ case study (based upon real statistics) on which we may both agree. OK?

    Woodstock model:

    $57,000 household income, home fair market value $152,000, property tax rate 4.6% of fair market value. (If you want to include homestead exemption, that would be $18,000 x.046).

    Somewhere Else model: (please be realistic, whether you cite sources or not)

    X household income, Y home value, Z property tax rate.

    Give me the case study breakdown which supports your argument, which I believe is that complexity of comparisons means that Woodstock 4.6% property tax rate is justifiable, or that emotional arguments are superior to numbers.

  17. PS If you think I don’t hate TIFs and the funding skew they create, read the past 3 years of TIF posts on this blog.

    You will also find helpful specific tips to fight a TIF coming soon to a neighborhood near you.

  18. The FY 2016 CAFR is not yet posted on the Woodstock CUSD 200 website.

    FY = Fiscal Year

    FY 2016 was July 1, 2015 – June 30, 2016.

    CAFR = comprehensive annual financial report

    +++++++

    Adobe pdf Page 70 (numbered page 42 in the document) of the FY 2015 CAFR says the net pension liability (approximately the unfunded pension liability, which is the taxpayer IOU to the pension fund as of a certain date) was $216,627,639.

    As of June 30, 2015, taxpayers owed $216,627,639 to the TRS pension fund for teachers and administrators in Woodstock CUSD 200.

    That is $216 Million Dollars for education services already rendered.

    That is $216 Million Dollars that will not be spent on educating children.

    ++++

    Read Illinois Pension Scam by Bill Zettler to better understand teacher and administration pensions and legislative benefit hikes to TRS and the other four state pension systems.

    Read Chapter 1.1: IL Pensions: More than 130 benefit increases since 1970 are the major cause of unfunded liability.

    Bill Zettler compared pension rules on December 15, 1970 to pension rules in 2011, and found more than 130 benefit increases.

    Each of those 130 benefit increases is guaranteed in the state constitution not to decrease.

    Benefits can be added but not clawed back.

    More state funding to pensions means less state funding for educating students.

    Woodstock taxpayers are feeling the pain.

  19. Clarification.

    As of June 30, 2015, taxpayers owed $216,627,639 to the TRS pension fund for teachers and administrators whom are working in and have retired from Woodstock CUSD 200.

  20. Teacher unions and their PACs protect hiked teacher pensions.

    +++++

    Why would the IEA teacher union PAC (IPACE, SBE committee ID 1169) contribute $38,900 to the Jack Franks PAC (Supporters of Jack D Franks) on March 12, 2016, just 3 days prior to the March 15, 2016 primary in which Jack Franks had no opponent.

    The Jack Franks PAC then transferred $38,900 to a money market account on March 14, 2016 associated with the PAC.

    The Jack Franks PAC already had $500,000 in total.

    Why is Jack Franks PAC accumulating all of this money.

    That much money is not needed for a State Representative or County Board Chair race.

    Does Jack Franks have ambitions for a statewide office such as Governor?

    +++++

    IPACE is Illinois State Board of Elections (SBE) committee ID 1169.

    Supporters of Jack D Franks committee ID is 19464.

    +++++

    IEA = Illinois Education Association, the Illinois statewide teacher union for the National Education Association (NEA), and the state affiliate of local school district IEA unions

    Woodstock Disrict 200 as an IFT affiliated union, not an IEA affiliated union.

    IFT = Illinois Federation of Teachers; it’s national affiliate is the AFT (American Federation of Teachers).

  21. Basically, all I’ve seen from Dick Lankey is pointing out that we fund schools with property tax rates.

    Yup..

    Notice he doesn’t address the fact that Woodstock pays significantly higher rates than other municipalities in Illinois, including even ones right here in McHenry County, who also rely on property taxes to fund their schools.

    It makes me wonder what his objective is.

    He exudes all the tell tale signs of a SHILL.

    Repetition, nitpicking, hypocrisy, and insults (which he does in a passive aggressive way).

    People like Dick have nothing CONSTRUCTIVE to add — they do what they do to plant seeds of doubt in people in the hopes that those people will be taken out of the FIGHT.

    He wants to take you out of the fight.

    Dick Lankey should come to the D 200 meetings or Woodstock City Council and make the case before the public that the residents are, more or less, getting a good deal comparatively — at least one that should not cause concern.

    When he does, post the Minutes.

  22. This article was useful.

    It’s easy to disagree with a few points, but useful nonetheless.

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