Tax-Relief Referendum Unlikely For Kane County in SB 1947 Formula

Tax-Relief Referendum Unlikely For Kane County in SB 1947 Formula

  • How will school-funding reform affect Kane County schools and taxpayers? This is the second of an ongoing series of articles that looks at the local effects of Senate Bill 1947.

One of the outcomes of the school-funding “grand bargain” in Illinois is the potential for voters to lower property taxes via referendum, but that won’t be in the cards for taxpayers in Kane County this year and likely won’t be in the cards next year.

Senate Bill 1947 offers an opportunity for taxpayers in well-funded districts to put a referendum on the ballot asking voters for the OK to lower the property-tax extension, but it applies only to districts above 110 percent adequacy levels.

Right now, both the state’s school-adequacy levels and the school districts available for property tax relief pool grants are still being determined by Illinois State Board of Education. Preliminary information suggests that no school district in Kane County is likely to be above the 110 percent adequacy level, but there’s still a long way to go in the evaluation.

At last week’s Kane County Legislative Committee meeting, Lea Negron, a legislative assistant of 33rd District state Sen. Karen McConnaughay, explained some of the process and details of SB 1947. Negron said the ISBE has launched an in-depth data verification process to connect with each of Illinois’ 852 school districts to ensure the accuracy of all the new data variables that they must use in order to calculate tier funding claims under the new funding formula.

“Once all of that that data is verified, a calculation of each school district’s final percentage of adequacy can be determined,” she said via email this week. “This process will take time, and it has been projected to be finalized in January 2018.”

How Adequacy Levels Work

So, what’s an “adequacy level” and how does it get above 100 percent?

The basic idea of the school-funding formula is to distribute money to the schools that need it most. It uses an evidence-based formula — taking into account multiple factors, including enrollment, numbers of English learners, special needs students and students living in poverty — to determine an “adequacy target” for funding a quality education.

The formula adds the funding revenue from local property taxes to the existing state funding revenue to get a total, and the state then distributes additional funds to hit the adequacy target for under-funded school districts. The graphic below simply illustrates how it works.


In some districts, the amount of local property taxes and state funding actually puts them above the 100 percent adequacy level. Under the new legislation, districts above the 110 percent adequacy level are eligible for property-tax relief through referendum.

How Property Tax Cut Referendums Work

In Kane County, schools get about 68.7 percent of the total property tax dollars. That’s one reason school funding would be a key component to significant property tax relief. (SOURCE: Kane County Treasurer’s Office)

OK, we’ve established that, under SB 1947, school districts above 110 percent adequacy levels can reduce their property taxes via referendum.

So how does that work?

Preliminary lists indicate there are presently about 100 districts above the 110 percent level. Among those geographically nearest to Kane County are Barrington School District 220 (123 percent), Naperville School District 203 (120 percent) and Winfield School District 34 (134 percent).

Again, the ISBE is still gathering information and final adequacy numbers won’t be known until next year, but at this time, it appears no Kane County school districts are likely to be above the 110 percent level and so would not have the opportunity to go to referendum.

If a Kane County School district were judged to be above the 110 percent adequacy level, the process of getting a referendum on the ballot isn’t easy. The law requires a petition signed by not fewer than 10 percent of the voters in the school district — a fairly healthy number of signatures.

It’s also difficult to return a question to the ballot if it fails the first time out. According to the new law, once a question is asked, it may not be submitted again for the same school district at any of the next two consolidated elections.

If a question does go to the ballot, it has to be stated in language prescribed by state law:

Shall the amount extended for educational purposes by (school district) be reduced from (previous levy year’s extension) to (proposed extension) for (levy year), but in no event lower than the amount required to maintain an adequacy level of 110 percent?

In other words, a district at 120 percent adequacy levels could reduce its property tax extension in order to reach the 110 percent funding adequacy level. How many dollars that would save the individual taxpayer would depend on the taxpayer’s income level and the amount of the previous year’s levy extension.

Other Sources of Tax Relief in SB 1947

Another potential source of tax relief provided in SB 1947 is through Property Tax Relief Pool Grants. We’ll look at that source in the next part of this series.

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