SOMONAUK — Unless they pass a referendum to raise property taxes in April, Somonauk School District 432 will have to cut $800,000 over the next two years to make ends meet.
Board President Thomas Nielsen painted a grim picture of the district’s future, with everything from electives to sports on the chopping block.
“What we have to do because the referendum failed is ... we need to plan for the worst, and work for the best,” Nielsen said. While no action was taken at the Monday, Nov. 19 meeting, Nielsen said the board would put a proposal to raise the district’s property taxes on the April ballot.
By a vote of 1,382 to 974, voters denied a referendum that would have increased the district’s education tax rate from 3.05 percent to 3.95 percent, an increase district leaders estimated would generate about $900,000 annually.
But even if voters pass the referendum in April, the district will not see the money until the 2014-15 school year. Nielsen said he hopes to have $400,000 cut from the budget from both the 2013-14 school year and the 2014-15 school year, respectively.
And the referendum won’t fix everything, according to the district’s numbers and Nielsen’s own admission.
“We are not expecting to bring much, if anything, back, based on our projections,” Nielsen said of the referendum’s passage. “I don’t want people to think that the last three years of cuts are coming back. I don’t think that’s realistic.”
Nielsen said the district’s current issues are not because of spending, but revenue. Like many communities, property values in the district have fallen. The school district is seeing its fourth consecutive year of falling property values, a big problem considering that 75 percent of D-432’s revenue comes from local property taxes.
If the referendum is not passed, the district is projecting its budget deficit grow to $1.4 million by the 2017-18 school year. This assumes property values do not drop after the 2014-15 school year.
If the referendum is passed, the district’s fund balance would grow, allowing it to absorb a $34,000 deficit for the 2017-18 school year. But this also assumes that property values remain the same after 2014-15.
Complicating the revenue picture is the fact that LaSalle County is not a tax-capped county when it comes to property values. Nielsen said this means that the district’s revenues rise and fall with property values.
“We can’t just ask for more money like other districts in the county,” Nielsen said, hence the need for a referendum. Although part of the district is in DeKalb County, the majority of its funding comes from LaSalle, hence binding the district to that county’s rules.
If property values fall farther – Nielsen said values have fallen so much that with the referendum’s passage, a person with a $100,000 would still be paying less than they did in 2010 – the district only has three options, Nielsen said. It can cut more, hope the state changes its formula for general state aid or borrow money.
But even with all of the problems facing the district, Nielsen has hope. Superintendent Dawn Green mentioned the possibility of some programs and activities continuing with the help of volunteers, a call that Matt Wilson, the vice president of the tricounty’s FFA alumni chapter, answered by saying they have members who are happy to help out in any way they can.
“This community has always supported the schools,” Nielsen said. “I think you’ll be amazed to what the community will do if they need to do it.”