The referendum voters approved in Indian Prairie School District 204 promised to keep the property tax rate for the “bond and interest” levy flat, and officials are keeping that promise — planning to borrow the newly approved $420 million at rates that will allow for consistent repayment.
But the district’s operating levy will need a 4.5% increase from the $331.9 million collected last year to fund all day-to-day costs, said Matt Shipley, chief school business official.
During Monday’s school board meeting, Shipley laid out a proposed $347 million operating levy, which would result in roughly a $215 property tax increase for the owner of a $450,000 home — the average in the district. When combined with the $25.5 million bond and interest levy the district’s total ask is proposed at $372.5 million.
“Our successful referendum was exclusively a capital levy. That is exclusively talking about the bond and interest levy,” Shipley said. “The operating rate was not impacted at all by the referendum.”
Need for operating funds
The operating levy makes up 78% of the district’s revenue, Shipley said. It’s the money that funds pay and benefits, transportation, utilities, and supplies for the daily functioning of the district’s 36 facilities. State funding makes up roughly 13% of yearly income, with the rest coming from federal aid and other local sources.
But the state of Illinois’ evidence-based funding formula rates District 204 at 85% funded. Shipley said this means the state recognizes that District 204 is not getting all of the money it needs.
“At 85% funded, we are tens of millions of dollars short every year compared to what the state says we would need,” Shipley said. “We are, in many cases, doing more with less.”
This adds up to higher class sizes, fewer administrators, lower per-pupil spending and “some programming shortcomings,” Shipley said. Plus, it creates a heavier reliance on property taxes, a situation school board members called imbalanced and tough on taxpayers.
Rising assessments hit homeowners hard
The other factor in the levy request is property tax assessments. In 2023, all properties in the district were reassessed, and Shipley said this led to greater increases in residential property values than in commercial values. This created “significant tax increases in portions of the district” for homeowners, he said.
School board members called this less than ideal.
“We want the tax burden appropriately spread across the district,” school board member Justin Karubas said.
But this isn’t a blanket reassessment year. Property values are projected to increase because of market rates, but the changes are likely to occur more evenly among commercial and residential properties. This causes two effects on the levy, Shipley said.
Falling tax rate, but bills still increase
First, with more total property value, District 204 is able to decrease its tax rate to the lowest it’s been since before the Great Recession. Shipley said the proposed levy calls for a property tax rate of 5%, down from a recent rate of 5.36% in 2019.
But then, because property values are projected to rise more than the planned tax rate will fall, the average homeowner will still see an increase on their bill.
Despite complaints about the state funding system, school board members said they are careful not to ask for more than they need, while still providing a high-caliber education that drives property values and quality of life.
“The board has been extremely diligent with not spending in areas that are unnecessary to spend,” school board member Mark Rising said. “I think we’re doing a wonderful job. I think we’re doing right by our taxpayers.”
The school board is scheduled to vote on the tax levy after a public hearing during its Dec. 16 meeting.
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