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 When residents of Sangamon County arrive at the ballot box in
November, they’ll be offered the choice to implement a new 1 percent sales tax
to fund school facility renovations. The hike would raise $20.8 million for
schools in the county, according to the State Journal-Register, with $10.1
million going to Springfield School District 186.
Illinoisans already shoulder the highest combined state and local sales tax rate
in the Midwest. Under the proposed increase, Springfield residents would pay a
combined sales tax rate of 9.75 percent – among the highest in the country. But
the city’s South Central Business District, home to Scheels and several
restaurants along South MacArthur Boulevard, would fare even worse. Customers in
that district already pay a combined 9.75 percent sales tax rate, meaning a 1
percent spike would bring that burden to 10.75 percent, surpassing Chicago’s
10.25 percent rate as the highest in the nation.
 The November sales tax referendum will come on the heels of a 3.3 percent
property tax levy increase the District 186 school board approved in December
2017.
Under state law, school districts can petition for a sales tax of up to 1
percent to fund school repairs and renovations. This is called a County School
Facility Occupation Tax, or CSFT. If school district boards representing over 50
percent of the county’s student population approve the CSFT, it will be
introduced as a referendum question on the county ballot.
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Bill Yattoni of the Rochester School Board shared
hopes of lowering property taxes if the referendum passes, according
to the Journal-Register. While that may seem like an attractive deal
to some voters, taxpayers need only look as far as Champaign County
to see how easily those hopes can remain unfulfilled. In 2009,
school district and county officials claimed a proposed CSFT would
result in lower property taxes in 13 county school districts. But
after the measure passed, only one school district followed through
– the other 12 raised property tax levies.
One party involved in pushing Champaign County’s CSFT ballot measure
was Stifel, Nicolaus & Co., a multibillion-dollar holding company.
Stifel provides consulting services for school districts and
initiates CSFT campaigns on their behalf. In the event that a CSFT
referendum passes in a given county, the company then contracts with
districts in that county to handle school facility bond sales. The
Missouri-based company was involved in at least 12 of the 14 CSFTs
passed in 2014. And they’ve had a hand in Sangamon County’s
referendum as well: A Sept. 9 story by the Journal-Register shows
Stifel, Nicolaus & Co. conducted a revenue analysis of Sangamon’s
proposed CSFT.
Rather than burdening taxpayers with CSFTs, local school districts
should take steps toward reducing excessive employee compensation
and trimming inflated administrative costs. At the state level,
lawmakers must pursue additional reforms that enable school
districts to control costs and avoid subjecting overtaxed residents
to further tax hikes. Taxpayers should pressure state lawmakers to
make constitutional changes that rein in government unions’ outsized
collective bargaining power and control the growth of unfunded
pension liabilities. Until then, local taxing bodies will only
continue to lean on taxpayers.
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