Tremont CUSD 702 Referendum -- March 19, 2024

Vote

Links/Resources

Email Questions to:

d702referendum@d702.org

Fact Sheet

The fact sheet provides key information about the referendum.

Frequently Asked Questions

Click the link above to view the FAQ

Presentation Slides

Click the link for the slideshow from the January 30th referendum presentation.

Area Tax Rate Rankings

The tax rate rankings show where Tremont CUSD 702 ranks among other area communities. It also shows how much more residents would pay in taxes in those other communities compared to Tremont.

Impact on Tax Bills

This document shows the impact on property taxes and tax rates based on whether or not the referendum is approved by voters.

Operational Expenses Per Pupil Rankings

The OEPP rankings show where Tremont CUSD 702 ranks among other area school districts when it comes to overall spending per pupil and instructional spending per pupil.

Updates

February 9, 2024

Frequently Asked Questions (FAQ)

A FAQ sheet has been added as a resource. Click this link or the link on the left side of the page to access it.

January 25, 2024

Referendum Ballot Language Explained

The language that will be on the ballot will make it appear that the referendum will result in a tax increase.  While the limiting rate will see an increase, the overall tax rate will drop due to the expiring building bonds.  Based on the statutory requirements for ballot language, there is no mechanism to refer to the decreasing bond rate on the ballot.  All of the figures presented are also based on the current year because it can only include the most recent official tax figures.  There will actually be a year in between the current year and the first year any referendum-related taxes would be collected, but because those new figures are not official, they cannot be used in the ballot language.

The ballot language will appear as shown below in bold.  Comments in maroon are included to add some explanation and clarification. 

  

QUESTION TO INCREASE THE MAXIMUM AUTHORIZED ANNUAL TAX RATE FOR EDUCATIONAL PURPOSES

Shall the limiting rate under the Property Tax Extension Limitation Law for Tremont Community Unit School District No. 702, Tazewell County, Illinois, be increased by an additional amount equal to 9.5% ($0.40) above the limiting rate for levy year 2022 and be equal to 4.624% of the equalized assessed value of the taxable property therein for levy year 2024 for the purpose of generating additional revenue for the School District?

The 9.5% increase refers to the increase of the limiting rate only (4.22 to 4.62, which is a 9.5% increase).

The overall tax rate will actually DECREASE by 5.2% due to the significant decrease to the bond rate, but there is no way to mention this in the ballot language.

(1)           The approximate amount of taxes extendable at the most recently extended limiting rate is $5,896,607, and the approximate amount of taxes extendable if the proposition is approved is $6,454,957. 

This figure shows an increase of about $558,350, but it’s based on current year property values because those are the most recent official numbers. Taking increased property values into consideration, it’s projected that the referendum would generate $700,000 or more in 2025-26 compared to 2024-25.

 (2)           For the 2024 levy year, the approximate amount of the additional tax extendable against property containing a single family residence and having a fair market value at the time of the referendum of $100,000 is estimated to be $133.33.

Again, this language cannot take into account the decreasing bond rate and lower overall tax rate.  It’s projected that a residence valued at $100,000 would actually see a DECREASE in taxes of $23 between 2024 and 2025 if property values remain relatively steady and the referendum passes. There would be an additional decrease the following year as well because the bond rate will decrease once again.

(3)           If the proposition is approved, the aggregate extension for 2024 will be determined by the limiting rate set forth in the proposition, rather than the otherwise applicable limiting rate calculated under the provisions of the Property Tax Extension Limitation Law (commonly known as the Property Tax Cap Law). 

 

Hopefully, this helps clarify the issue of the challenging ballot language.  It can certainly be confusing, but we’re trying to be as transparent as possible, so please feel free to reach out with any questions. 

January 19, 2024

Referendum Meeting -- Rescheduled to January 30th

The referendum meeting that was postponed on January 15th has been rescheduled for January 30th at 7:00 pm at Tremont High School. This meeting will provide background regarding the referendum and include a question and answer session for anyone with questions.

January 14, 2024

Referendum Meeting -- Postponed

The referendum meeting scheduled for January 15th has been postponed. It will be rescheduled for another date. That will be communicated once it's determined.

December 8, 2023

Property Tax Savings

The March 19th referendum for Tremont CUSD 702 will present voters with a question about whether or not they approve of an increase to the district’s limiting tax rate from this year’s 4.22% to 4.62% in 2025.  As mentioned in previous updates, this increase coincides with a decrease in the district’s bond tax rate, which means the overall tax rate will be lower even with the passage of the referendum.  If approved, the increased limiting rate will generate revenue for the district for enhancing and adding programming for students and for addressing facility needs. 

We often discuss tax rates, but one question that comes up quite a bit is in regard to how people’s actual tax bills will be impacted.  It’s difficult to project future increases to property assessments, but the chart below shows projected tax savings compared to taxes paid in 2024 if property values were to remain relatively steady over the next few years. 

Click here for the chart.

As you can see in the chart, as the bond tax rate drops over a two-year period because existing building bonds will be paid off, taxpayers are projected to save on property taxes that go to the school district. Tremont already has one of the lowest school district tax rates in the area and that rate would drop further with the passage of the March referendum. 

One of the particularly challenging features of this referendum is that there is no mechanism to include anything about the decreasing bond rate in the ballot language.  As a result, the language used on the ballot will make it appear that the tax rate will increase.  While the limiting tax rate will increase, the overall tax rate will drop because of the decreasing bond tax rate that occurs at the same time.

Future updates will address the ballot language issue in more detail, but it’s worth noting that the language could be confusing to voters.  The question will be presented on the ballot as a simple “Yes” or “No” question with a “Yes” vote signifying you support the referendum’s passage and a “No” vote signifying you oppose the referendum’s passage.

Public meetings will take place between now and March with the next meeting likely being in early-mid January.  We will share information about those details once they are determined.

November 17, 2023

On Monday November 13th, we hosted a public informational meeting regarding the March referendum.  There were some very good questions posed during the meeting.  One of those questions involved a comparison in tax revenue between the Tremont school district and the Deer Creek-Mackinaw school district.  This required some additional research on my part after the meeting, but I was able to discover some interesting details. 

In 2016 and 2017, Dee-Mack passed multiple referendums.  The 2016 referendum approved $5.8 million in building bonds for facility upgrades, including the football field and track.  In 2017, voters passed another referendum that increased the tax rate in their education fund.  Because of the dynamics involved with refinancing existing building bonds at the time, all of this worked out to be virtually tax rate neutral – no increase or decrease to the overall tax rate.  The increase to the education fund, however, provided Dee-Mack with much needed revenue for operating and enhancing programs. 

Dee-Mack is a very good comparison district for us because they are similar in size and their district’s overall property value figure is similar to Tremont’s as well.  One advantage they have is that they are not subject to tax caps because part of their district extends beyond Tazewell County.  Currently, Dee-Mack has an overall school tax rate of 5.25%.  Approximately, 0.62% of that amount is for their bond payments.  That leaves 4.63% to fund the operations of the district. 

The overall school tax rate in Tremont is 5.13% with 0.91% designated for bond payments.  That leaves 4.22% for operations.  That figure is 0.41% lower than Dee-Mack’s.  As a result, Dee-Mack’s tax levy generated around $575,000 more for operations than Tremont’s did this year.

The referendum the Tremont school district is pursuing would add 0.40% to the existing 4.22%.  This would result in a 4.62% rate which is almost identical to Dee-Mack’s current rate (4.63%).  It’s important to remember, however, that this rate increase would coincide with a significant decrease in the bond rate as existing building bonds are paid off.  Because of this, the overall tax rate would drop even with the passage of the referendum. 

I mentioned earlier that Dee-Mack is a very good comparison district for us.  One could argue they are a perfect comparison district in this situation because their current operating tax rate is almost exactly where Tremont CUSD 702 is trying to get with the upcoming March referendum. 

The chart linked here compares Dee-Mack and Tremont school district tax rates. 

 

So far, most of the discussion has focused on tax rates and how the school tax rate would decrease even with the passage of the referendum.  The next referendum update article will include more details about the impact of the referendum on actual tax bills.  While property value assessments have been very volatile lately, it is still possible to create some reasonable projections for tax bills.  Since I’ve thrown enough numbers at you in this update, I will save that information for the next time. 

I will also use the next update to clarify language that will appear on the ballot in March.  Unfortunately, there is no mechanism for mentioning the expiring building bonds and the resulting significantly lower bond tax rate in the ballot language, so the ballot will make it appear that the tax rate will actually increase. While the “limiting rate” will increase from 4.22% to 4.62% as I described earlier in this update, the substantial decrease in the bond rate will result in an overall rate decrease.  Because of the rules regarding ballot language, there is no way to describe this on the ballot itself. 

Again, that will be a topic for the next update.  Until then, have a wonderful Thanksgiving.

 

More public meetings will take place between now and March with the next meeting likely being in early-mid January.  We will share information about those details once they are determined.

More information about the referendum will continue to be made available on the school district website as well --  www.tremont702.net

You can also email questions to d702referendum@d702.org

November 7, 2023

Are we spending too much?

When analyzing district finances, it's important to understand whether the district has a bigger problem with revenue or with spending. There are some statistics that can be used to analyze this.

One example when it comes to spending is Operational Spending Per Pupil (OEPP), which includes most district expenses other than debt payments, summer programming, and capital equipment purchases. Out of 34 area school districts, Tremont ranks 25th in OEPP. Statewide, Tremont ranks 707th out of 849 school districts in OEPP.

Part of the OEPP statistic includes instructional spending, which involves activities directly dealing with the teaching of students or the interaction between teachers and students. Out of those same 34 area school districts, Tremont ranks 7th in instructional spending per student. When instructional spending is calculated as a percentage of operational spending, Tremont ranks 1st in the area. A list of area rankings can be found on the left side of the webpage.

What does this mean? -- It means relative to other area districts (and certainly statewide), Tremont CUSD 702 does not appear to be spending as much per student, but the money being spent is being focused more directly on instruction than it is in other districts. It also means that other areas (maintenance, transportation, etc) may not be getting the resources they need since such a large percentage of spending is focused on instruction.

What about revenue? -- The state funding formula calculates a district's level of funding adequacy based on its access to local resources, along with state and federal funding. Districts are categorized into four tiers based on their financial adequacy level.

  • Tier 4 is the highest and includes districts that have resources above 100% of their adequacy target

  • Tier 3 includes districts that are between 90%-100% of their adequacy target

  • Tier 2 includes districts that are between 78-90% of their adequacy target

  • Tier 1 is the lowest and includes districts below 78% of their adequacy target

The further away a district is from its adequacy level, the more new state funding it receives to help push it closer to adequacy. Tremont has spent the last few years in Tier 1, which is the tier furthest from adequacy. While this has helped increase state funding for the district, it is also an example of how we are facing a revenue issue. The state's funding formula recognizes that our district is not able to generate enough revenue and, therefore, needs more state funding to help the cause. Theoretically, the increased state funding would eventually push the district out of Tier 1, but state funding is limited each year so that could be a lengthy process and one that may not be able to keep up with rising costs.

Conclusion -- The fact that the state's funding formula identifies Tremont CUSD 702 as Tier 1 demonstrates that we lack the necessary revenue to achieve financial adequacy. Combined with the fact that the district ranks relatively low in per pupil spending, it is safe to say that the financial issues the district has faced are based on a shortage of revenue more than on overspending. In order to maintain, enhance, and expand programming to meet the needs of our students, solutions to this revenue issue must be pursued.

October 26, 2023

Referendum Informational Meeting -- Monday November 13th at 7:00 pm in the THS Band Room

Questions about the referendum? Email d702referendum@d702.org

October 23, 2023

At the Board of Education meeting held on October 12th, the Tremont CUSD 702 Board approved a resolution to place a referendum on the ballot at the March 19, 2024 election.  The purpose of the referendum is to generate revenue to maintain and enhance educational programming and facilities. 

The timing of this referendum coincides with the expiration of building bonds from the 2007 high school building upgrade.  As these bonds are paid off, the taxes collected to pay for them are no longer collected, which results in a decrease of the tax rate.  Because the taxes are no longer collected, the district cannot simply re-allocate those funds for other purposes. 

The expiration of the bonds will result in a sizeable decrease to the tax rate of approximately $0.70 over a two-year period in 2025 and 2026.  The referendum the Board is seeking is for $0.40, so the overall school tax rate will still decrease from its current level even if the referendum passes.  Tremont already ranks 28th out of 30 area communities in school district tax rate and that rate is expected to decrease further next year as well.

If passed, it’s estimated that the referendum could generate $700,000 of additional revenue for the school district for the 2025-26 budget and set a new revenue base for future years.  Over the past 10-15 years, shortfalls in state revenue have resulted in deficit spending by the district despite some cuts to programming and tightened expenditures in several areas.  This referendum would resolve revenue issues for the long-term and provide an opportunity for the district to maintain, enhance, and expand programs for students, attract and retain quality staff, maintain and improve facilities, and achieve overall long-term financial stability while still lowering the school district tax rate.

The Board is planning a public meeting for mid-November to present more information about the referendum.  Details on that meeting will be shared soon.  Use the links on the left side of the page for more information about the referendum.