Tag Archives: referendum

Peoria Public Schools

Should citizens force D150 bond issue to a referendum?

95 Comments

Elaine Hopkins thinks so.

You may recall that District 150, despite having just borrowed $30 million in tax-anticipation warrants at the beginning of the year to make payroll, is already running out of money again and needs to borrow $35 million more. This time they would raise the money through working cash bonds which will be repaid via property taxes over the next several years. Here’s the rub:

If 10 percent of voters petition the district to take the sale of the cash bonds to referendum, the district would run into a wall, having to wait until November, or plead with a judge to hold a special election, [interim controller Norm] Durflinger added.

Hopkins says “some people are now looking at this petition option.” “It could be a bargaining chip to stop future school closings, or could be affirmed on its own,” or it could be a way to get District 150 “management” to “resign in shame,” she says.

My take: When I first heard about this idea (of forcing a referendum on the bonds), I have to say, it didn’t thrill me. First of all, public schooling is an essential service and should be funded. Secondly, I just finished waging an unsuccessful effort to defeat the public facilities tax referendum, and I just don’t have the energy to do that again (so soon, at least). Thirdly, I have a hard time getting over the irony of museum tax supporters like Hopkins suddenly getting all concerned about wasting tax dollars. Apparently throwing $40 million down the drain on a museum is okay, but $35 million to pay teachers is unacceptable.

However, the more I think about it, the more I think forcing a referendum may not be such a bad idea. Why? Consider:

  1. They have been eluding voter accountability long enough. When District 150 wanted to build new schools, the money for that building program should have been submitted to the public via referendum. But it wasn’t. District 150, with the help of our state legislators (including then-state representative Schock) got legislation passed allowing District 150 to access the Public Building Commission for its building program, bypassing the voters and allowing them to raise our property taxes without a referendum. Practically speaking, this also meant they didn’t have to have public buy-in on the siting and design of the new school buildings.

  2. They have passed up other potential revenue. District 150 could have supported other school districts in the county and forced a 1/4% sales tax referendum onto the April ballot that, if passed, would have helped all county school districts get money for infrastructure needs, but they didn’t. District 150 officials won’t speak on this topic for attribution, but privately say that the reason they didn’t support this was because (a) they were asked not to by museum supporters such as Caterpillar and the Peoria Area Chamber of Commerce, who you may recall sent letters to all the school districts pressuring them to keep this off the ballot so it wouldn’t jeopardize the museum tax from passing, and (b) they didn’t want a new revenue stream right before they negotiated a new teachers contract because they thought it could lead to demands for higher pay/benefits. Hey, if they’re looking for ways to avoid getting more revenue, maybe they would favor forcing the bond issuance to a referendum.

  3. More money won’t resolve the root problem: mismanagement. We’ve been through this kind of crisis once already. We’ve already closed schools so that District 150 could allegedly get their fiscal house in order. Why are we going through this again — and so soon?

    • It is not just because of revenue shortfalls. This crisis is often explained as merely a revenue problem — that everything would be hunky-dory if it hadn’t been for the recession or reductions in state aid. That would be believable except that no other school district around here is in quite the crisis as District 150. For example, Pekin’s school district actually has a surplus. While their FY08 budget does have a planned deficit built into it, it’s covered not by loans, but reserves that have been saved up over several years — most recently FY07.
    • Savings from last round of closures were squandered. In 2007, District 150 closed White and Blaine-Sumner schools. However, they didn’t sell Blaine-Sumner, but remodeled it (including adding air conditioning) and turned it into district offices for about 80 workers. They did eventually sell the White School building for $750,000, but they also acquired the former Social Security Administration building on Knoxville and spent $1.27 million to remodel it to house their “transition to success academy.” Is it really any wonder that the district was unable to put up a surplus and save for a rainy day?

    By and large, we still have the same management team in place now as was in place then. If they were unable to properly manage the last crisis, why should we have any confidence that money given them this time will be any better managed?

From what I’ve heard, the worst that could happen if a referendum is forced is that the referendum could fail, the district could become insolvent and be taken over by the state or, possibly, the city. I’m beginning to think that’s not such a bad outcome. Small changes in the makeup of the school board over the past five years doesn’t appear to be working; a complete overhaul of the administration may be necessary.

Still, my mind isn’t totally made up. If anyone can give me reasons to have confidence in the current administration and their stated plans for improvement, I’m all ears.

Museum Block, Peoria County

Sales tax referendum discussed at county finance committee meeting

20 Comments

I couldn’t attend the Peoria County finance committee meeting Tuesday, but activist and regular commenter Karrie Alms did and provides this scoop:

Today’s Peoria County Finance Meeting was a real treat of new information.

  1. Peoria County feels that they will need to get the City of Peoria to title the museum property to them so that the County will be able to legally issue revenue bonds for the museum project. So, the County is in the process of carrying that water to the city.

  2. Roughly $35M will be needed for the museum project. Roughly — not a firm figure. Is that an increase, decrease or the same amount from the last figure on record? Wonder when that figure will be firmed up?

  3. That the resolution (the referendum language) will refer to a “public facility” not the museum specifically.

    I asked that as a voter in the voting booth, how would I know that the money would be specifically used for the museum? I wouldn’t know and that the museum people will have to make their appeal to let the voter know that the money is for the museum. Special, seeing that PA 95-1002 (born as SB 1290) refers to public facilities. I guess we will just vote to pass another tax for the County to start a fund for whatever suits them.

  4. And my favorite, that once the county has repaid the bonds, that the county could just give the land away to anyone — the city, the museum group or whomever. This concept was repeated at least twice.

After the bonds are paid off, Karrie told me, the County would then transfer title to the property back to the City or possibly the museum directly. I believe it was said in the meeting that it didn’t matter which entity got the property.

It’s interesting to me that they’re planning to use revenue bonds. What revenue will this project be producing exactly? Just a couple weeks ago, the city decided against using revenue bonds to pay for the new Marriott hotel downtown, opting for general obligation bonds because there was no established revenue stream. Now the county will be using revenue bonds for a project that will most likely need a perpetual operating subsidy? Where’s my municipal bond expert commenter? I need some more explanation on this one.

In answer to Karrie’s second question, the number was $24 million in November 2007 when it was first pitched to the county. By November 2008, the number reported was $35 million, evidently due to increased construction costs.

As for the referendum language, it is certainly vague if they’re indeed going to ask for a tax to go for a “public facility” without specifying said facility. They could use that money for anything, including other facilities besides the museum if the tax raised a surplus of money.

One other interesting note that Karrie didn’t mention: the results of the online survey were quite a bit more negative than the phone survey. On all the questions, a rather large majority was opposed to a sales tax increase regardless of the reason.

Museum Block, Peoria County, State Legislation, State of Illinois, Taxes

Who’s afraid of the big bad economy? Not the museum!

10 Comments

From the Journal Star:

With little debate, the Illinois Senate today voted 51-4 to send Gov. Rod Blagojevich a proposal to let Peoria County ask voters to OK a special sales tax to help pay for the Peoria riverfront museum.

The legislation, Senate Bill 1290, passed earlier in the House of Representatives. With Blagojevich’s signature, it would become law, and the question could be put to voters in the February or April municipal elections.

Not mentioned in the article is the fact that the bill allows increases in 1/4% increments, and could be used toward any “public facility” (e.g., Belwood Nursing Home), not just the museum. The way it will likely read on the ballot is:

To pay for public facility purposes, shall Peoria County be authorized to impose an increase on its share of local sales taxes by .25% (.0025) for a period not to exceed (insert number of years)?

This would mean that a consumer would pay an additional 25¢ ($0.25) in sales tax for every $100 of tangible personal property bought at retail. If imposed, the additional tax would cease being collected at the end of (insert number of years), if not terminated earlier by a vote of the county board.”

A quarter of a percent increase doesn’t sound like a whole lot, does it? But consider that, if this referendum were to pass, you would be paying .25% more on things that already are highly taxed — like restaurant food (which would go from 10% to 10.25% in the city). Is that going to make Peoria more or less competitive than East Peoria, right across the river? How many people do you think will come to see the museum in Peoria, then go have lunch in East Peoria?

And what about the economy? Is this the time to be increasing taxes when there’s plenty of unemployed people? What is the city’s solution on how to decrease the unemployment rate?
Consider these other items in the news as of late:

  • “[T]he effects of the economic crisis are being felt beyond Wall Street as charities locally and nationwide report increases in basic needs and decreases in donations to provide those. Some of the people who used to be donors are now asking for donations…. Nearly 90 percent of Catholic Charities nationwide report more families seeking help, with senior citizens, the middle class and the working poor among those hit hardest by the downturn…. The Salvation Army already has seen between 15 percent and 20 percent more need than last year in its first week of assistance applications received for the holidays…. The Friendship House scaled back the number of families this year allowed into their Adopt-A-Family program to ensure they could fulfill the need.”
  • “Fiscal restraint was the guiding principle in crafting next year’s [Peoria] county budget, which represents a 6 percent overall decrease over last year’s budget. In what is being described as a ‘maintenance budget’ with no new taxes or fees and no spending cuts, preliminary figures show spending requests at nearly $122 million while the county expects to bring in about $119 million in revenues. The approximately $3 million deficit – mostly in the capital fund – will be covered by reserve funds that sit at nearly $74 million, said Erik Bush, Peoria County’s chief financial officer….. The county expects to collect $25.5 million from taxpayers, about $1 million more than what was collected in 2007. Although the tax rate will drop 1 cent to 81 cents per $100 assessed valuation, property values are projected to increase 5.4 percent, so homeowners actually will pay more taxes to the county. The owner of a $120,000 home, whose value increases the projected 5.4 percent will pay $341.50 in taxes to the county, or $13.50 more than last year.”
  • “In total, the city’s staff whittled a $2.2 million budget deficit down to $117,771, an amount that some council members praised. ‘We asked an unbelievable task of our staff,’ Mayor Jim Ardis said. ‘Without cutting any positions or having any tax increase.’ …Finance Director Jim Scroggins said the biggest savings comes from the city’s health care costs, reflected in a substantial difference between the 12 percent budgeted increase for 2008 and the actual increase in health-related costs of only 4 percent…. In addition, the city plans to scale back on parking deck repairs ($300,000), repairs to some of its buildings ($200,000), delay repairs to police headquarters ($25,000), and reduce the neighborhood signs program ($68,662).”
  • “Illinois’ backlog of unpaid bills has hit a record $4 billion, and Comptroller Dan Hynes said Thursday the situation is ‘potentially catastrophic’ if allowed to continue…. Earlier this week, Blagojevich’s office said state revenues will fall $800 million short of projections because of the recession. The Senate Democrats’ top budget person, Sen. Donne Trotter of Chicago, said borrowing money right now may not be a good idea because of interest costs. He said the state should tap into its ‘rainy day’ fund first. Hynes said money in the rainy day fund was used in July. Trotter’s Republican counterpart, Sen. Christine Radogno of Lemont, also didn’t think much of borrowing money. ‘That’s exactly what’s gotten us into this problem,’ Radogno said. ‘Continuing borrowing is not a good idea. They’re going to have to look at making cuts. The wiggle room is gone.'”

It’s time to use all that advertising money to come up with another plan — one that doesn’t involve raising taxes.


Museum Block, before it was turned into a temporary parking lot