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DeKalb County school leaders consider 1 percent sales tax

roposal would add 1 percent sales tax

DeKALB – School officials throughout DeKalb County are considering trying to implement a sales tax that could tack on an extra 1 percent in sales tax on county sales and bring in millions to address payment on construction bonds and capital projects.

The county school facility tax can go up to 1 percent, implemented in quarter increments on all products sold, with the exception of a few things like cars, boats, air crafts, some foods, drugs and medical supplies and farm equipment.

School districts with 51 percent of the enrollment in the county would have to be on board with the plan to move forward with a referendum question, which has to be issued to the Regional Office of Education. Voters would have to approve the sales tax on the ballot, financial analyst Elizabeth Hennessy said. 

Schools would only be able to use the generated revenue on capital projects, so it wouldn’t go to things like payroll, she said. 

“I think this is a fabulous option,” Hennessy said. “But obviously you have to get the other school districts on board and the voters on board.” 

Sycamore School District 427 board members heard a presentation on bond restructuring options Tuesday. DeKalb school officials are in the process of making decisions about what to do about its debt. Restructuring options could cost the district millions in the long term. Options include stretching the debt out for decades. 

District officials considered the sales tax proposal in 2014, but most school board members didn’t show enough interest in the plan to get it off the ground. The proposed increase could bring DeKalb School District 428 $5.9 million annually. 

Districts with smaller enrollment seemed in favor of the new tax. 

Hiawatha School District 426 Board President Ryan Block said he attended a meeting on the proposal last fall, but the matter hasn’t come before the full board. Another meeting for district leaders is scheduled for Feb. 25. Block said he plans to attend to learn more about the sales tax and what it would mean for District 426 and its taxpayers. The proposed tax could bring the district an estimated $591,217 – nearly 11 percent of its $6.4 million spending in the fiscal 2016 budget. 

“In theory it sounds great – every school district wants extra funds, but we have to keep taxpayers in mind,” Block said. “We don’t want to do anything that would hurt our taxpayers.” 

In Sandwich, school officials support the plan, District 430 Superintendent Rick Schmitt said.

About half of the district’s roughly 2,100 students live in DeKalb County, Schmitt said, which could mean Sandwich schools could receive about $1 million a year if the sales tax were instituted.

That money would be a lifeline for a district with aging infrastructure and limited bonding authority, Schmitt said.

“This facility maintenance tax is something that would help generate revenue to offset the cost of keeping our buildings safe and current,” he said.

In Somonauk, District 432 Superintendent Jay Streicher said officials were in a wait-and-see mode. Streicher said he and school board President Thomas Nielsen attended an informational meeting on a possible sales tax in December.

“We take a lot of money right out of the pockets of our residents right now through property taxes,” Streicher said. “So I think you have to be very cognizant of that.”

About 30 percent of the roughly 800 children attending Somonauk schools are DeKalb County residents, so the district wouldn’t benefit as much as some others, Streicher said. 

Joe Burgess, superintendent of Genoa-Kingston School District 424, said the tax could be “a real positive thing for schools” at a time when state funding for districts has be declining. However, he said that to be successful, the sales tax would need widespread support.

“Everybody would need to have a real good idea about what each district plans to do with the one percent,” he said. 

If put to a referendum, Burgess said the Genoa-Kingston School Board would look at all available options and get feedback from residents before moving forward. At this point, the district’s board hasn’t taken a position on the issue. 

District 427 Superintendent Kathy Countryman and Indian Creek Community School District 425 Superintendent Pamela Rockwood couldn’t be reached for comment Tuesday.

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