Tax Breaks for Business
- on 05.27.06
- CCSD #46, D-127
- Comments Off
- Digg
- Del.icio.us
The News-Sun and the Daily Herald both have new articles about Grayslake trying to get the school districts in the area to abate bonds to help attract businesses to the Central Range Project. I am also glad to see others finally discussing this. I first mentioned this back in February.
|
The subject came up for informational discussion at Thursday night’s Grayslake High School District 127’s board of education meeting at Grayslake Central High School. The board took no specific action at this time. The Central Range, a 900-acre, $218 million project was first proposed by the village of Grayslake in January 2002. It envisions a variety of commercial businesses, some light industry and a minimum of upscale non-family residential housing for vacant land in the southwest corner of Grayslake. Three plans were presented for discussion, with the most extensive and expensive being a 50 percent tax abatement plan over 10 years provided to any new business that moves into the development. Since school taxes take up a large majority of the property tax bill, the abatement impact would fall most heavily on their shoulders. Jill Rohrer, who attended the district board meeting and is a trustee of Grayslake Elementary District 46, said from her district’s standpoint they are being asked to give up $200,000 each year for a 10-year period. No such abatement figures were mentioned for either Fremont District 79 or Grayslake High School District 127, but they were expected to be much more. District Board President Russ Hager stressed the proposal was just for discussion at this point. While trustees asked several questions, such as “would the business come to Grayslake anyway without tax abatements,” none seemed particularly enthusiastic about sacrificing millions of tax dollars in operating funds over a span of 10 years to invest in a chancy long-term future. Yet, the trustees left the door open for further discussion with both village and Lake County Partners officials. |
Thanks Jill for informing the public with actual costs in this matter. I would call on the other School Districts to be a forthcoming as well. The public has a right to know.
|
Under it, the village, school districts, the park district and others who collect property taxes in Grayslake would agree to give breaks to potential new businesses based on how many jobs they create, revenue they generate and other factors. The goal: Put a jolt into the commercial development of Grayslake so it doesn’t lose new businesses to surrounding counties and southern Wisconsin, where many communities already offer breaks of some kind, said Grayslake Mayor Tim Perry. The mayor and his staff want to know by the end of June if everyone is on board with the concept so they can begin dealing with specifics. Grayslake High School District 127 board President Russ Hager said the plan raises questions that need to be answered. Chief among them: “Do we have to?†If businesses will come anyway, Hager said, giving tax breaks would be like the district giving money away. But if there is no other way to be competitive, they’ll have to consider it. “We’ll need to know more about how important this is to attracting commercial development,†he said. Superintendent Rick Taylor said they have to at least look at the plan because Lake County communities are at a competitive disadvantage compared to Wisconsin and surrounding counties. “If you don’t look at the concept, you’re pretty much at the mercy of the forces around you,†he said. |
Here is some background of the Central Range Project (Thanks Jen):
- Village seeks support for project
- Agreement reached on Central Range
- Plan offers vision for enhancement
It sounds like the village wants a quick decision. Hopefully, the only decision they want is a willingness to discuss specifics. I don’t believe the school should just abate the bonds without knowing the details. We all know what can happen when a deadline does not provide enough time to gather all the information; the residential taxpayers will end up paying the brunt of this. In regards to this there is a particular comment made by Sue I would like to discuss.
|
This is tricky for school districts. EAV is taken into account for state aid purposes. If the district voluntarily abates a portion of the taxes–state aid may still be calculated on what the district could have collected. It hits the district harder for state funding purposes than a TIF does. The districts may lose more revenue than just the local abatement. Also, if any of the school districts involved decide to place a referendum of any kind on the ballot in the next 10 years, would the central range property be exempt? Would the agreement extend the abatement to this too? Seems like the homeowners are carrying even more of the burden without any relief for the next 10 years. |
From my understanding, bonds have nothing to do with state aid calculations. These calcuations are only applied to the Education Fund tax rate. This is one of the reasons why school districts tax its residents more than promised in a referendum.
The questions Sue asks are valid and need to be answered. This goes back to the need for more details before full agreement should be given.
A question I have is why these school districts continue to consider giving tax breaks to businesses while continuing to overtax its residents? This attempt to abate bonds is particularly disturbing because both Grayslake High School 127 and Grayslake Elementary 46 have both exceeded debt limits and voter approval on their bonds.
