D27 Board: Nekritz suggests income tax raise to fund government, schools
Despite not having passed a state budget, funding for K-12 education is one area of concern that members of legislation are seeking to address in the community.
State Rep. Elaine Nekritz (D-Northbrook) gave an update, which came during the Feb. 25 meeting, on the state of the battle on Capitol Hill.
As it stands now, state funding for schools is allocated through four means: the budget for K-12 education, federal court consent decrees, wages for state employees and certain programs funded regardless of whether or not there is a budget—such as reserve bond payments and pensions. About nine percent of what the state pays is funded through those four mechanisms.
While spending for social services, higher education and financial aid for low-income students are not being fully met by the state, officials for K-12 schools are seeing a slow funding rate.
Nekritz said it’s important for schools to watch their budget, since there’s a risk factor in having slow payment on state funding.
“The impact to you is that despite the fact you have a budget—that there’s a budget authorizing spending for education—there’s not enough money coming into pay the bills,” she said. “The backlog of payments is going to grow and grow and grow and your payments from the state are going to be slower and slower and slower.”
Gov. Bruce Rauner and other legislators have been working for months to settle and agree upon a budget. A number of competing proposals for solutions to balance state funding have been put forward.
“What I would think we need to do is raise the income tax to a level where we can actually afford to fund government,” Nekritz said. “Even if we were able to do that immediately, it is going to take us again 3 or 4 years, maybe 5 years to dig into that backlog of bills and bring it down to a normal pay cycle—that’s how severe things are right now.”
Legislative reform to fund education is another item state officials have been working to address on Capitol Hill.
“Basically, I think what you’re seeing is a pushback from suburban legislators for exactly the reason that (Superintendent Dr.) Dave (Kroeze) said is that the impact that comes out of the dollars that state provides to suburban districts,” she said. “While I am for equity and supporting districts that don’t have the resources that ours do. The only states that have been really successful in redoing their education funding formulas have done it in an environment where there is new revenue coming in.”
Of all the discussions on school funding reform—such as the tax cap freeze and cost shift—legislators have yet to agree on terms. Changes to pension payment, for example, have been proposed by state officials but have found little backing.
The budget impasse and reform for educational funding have implications that weigh on school officials not only in Northbrook School District 27 but throughout the state. Nekritz said it’s unrealistic to think that legislators will impose additional costs upon schools.
Traditionally, the state spends about 35 percent of its money on K-12 education. While freeing up funding to run the government is the state’s goal, the ability to fulfill that promise hasn’t always been available, Nekritz said. Schools official throughout the state have needed to be mindful of the rate at which funding enters, to avoid the burdens that budget woes can bring.
“While the city of Chicago—their [Chicago Public School]—is clearly the big kahuna out there and probably the one that’s most visibly at risk, there’s lots of other units of government and lots of other schools districts that are in as equal a bad a plight,” she said. “Theirs is just not as visible.”
She said the idea of CPS entering into bankruptcy “throws the bond market into a tizzy and that’s not healthy” for any of the remaining units of government.
“I do think that we need to be looking at CPS’ situation and some of these other districts’ situations and say ‘what can we do to prevent that one from getting worse?’” she said. “We need mechanisms and we need interventions to make sure that that doesn’t happen.”
D27 supports company’s tax break request
Also at that meeting, board members for District 27 discussed the Village’s 6b tax break request allowing a Northbrook business. The program reduces the overall property tax bill for industrial and warehouse buildings over the course of 12 years.
Officials are hoping the financial incentive gives Matrix Financial II/Atlas Fibre a lift, as well provides a source of relief to neighboring properties and the Village in general. To date, the Northbrook business at the center of the discussion hasn’t always shown validity in adhering to best practices, board vice president Edwin Feld said.
In January 2012, Atlas Fibre pleaded guilty to violating the Endangered Species Act for unlawfully exporting wildlife products — including African elephant ivory — between 2002 and 2009. Atlas Fibre was ordered to pay $150,000 in fines and $13,700 in restitution to the US Fish and Wildlife Service.
Feld said his thoughts on the matter have moved him to be less than ambivalent about approving the request, adding that he’s not in total opposition to the action.
“I’m still very concerned because we want to help the Village, but I’m concerned about having good neighbors, I’m concerned about public relations and I’m concerned about our tax payers paying more money,” Feld said. “What happens is when the 6b goes into effect, we’re paying more taxes, so we’re going to be paying more taxes for a business that has some issues that I’m absolutely not comfortable with.”
Board member Frank Andreou said it would be a plus if the Village approves the 6b request, looking at how it all plays out in the big picture.
“Job creation is always a concern. I think that is an argument in favor as opposed to the other argument, which is we’re paying higher taxes, to help the company that has these type of violations,” he said. “So, it’s a balance. We have to look at the overall good. I think they treat their workers well and they’ve addressed my concerns about the environmental issue.”
Superintendent Dr. Dave Kroeze said it’s important to note that the request has its benefits, but there are still concerns around the matter.
“I think we should say that we support 6bs strongly in general,” he said. “I just don’t want [the Village] to think that we’re negative about all 6bs.”
The school board came to a consensus supporting the request in the end and will be sending their thoughts on the matter to the Village, where discussion will continue at their meeting on Tuesday, March 8.