The District has maintained a reasonable and responsible approach to the tax levy process and has levied at or slightly above the CPI over the tax years of 2000-2011 as indicated in the chart. The only exception was in the 2005 tax year when the Lake Cook Road Redevelopment Project Tax Increment Financing Project (TIF) was terminated and the District increased its levy to account for the growth in new property. The tax levy process enables a taxing body to secure funds to operate. It is critical for a district in that it fuels the programs and services that are offered. The Property Tax Extension Limitation Law (PTELL) regulates the annual levy process for school districts. Each December school districts are allowed to levy 5% or the Consumer Price Index (CPI), whichever is less, over the previous year’s tax extension. In addition, school districts can adjust the levy to account for new and/or redeveloped property. So in short, the District can only increase its operating budget essentially by this total amount.
LONG RANGE FINANCIAL PROJECTION – Fiscal Year 2012 to Fiscal Year 2017
The District is committed to long-term strategic planning for all operations, long term financial planning, and long term cost containment efforts in order to maintain financial solvency. We have taken this approach in managing the District’s financial operations in order to be both fiscally responsible and reasonable. Twice a year the Board of Education reviews the District’s long-range financial projections in order to ensure the fiscal solvency of the District. This review is conducted to maintain a stable financial position so that we can continue providing the excellence in programming for our students.
The District has targeted a 65% level of fund balance reserve, along with balancing the budget on an annual basis. The reason for a targeted 65% reserve level is to make sure the District has the appropriate level of funding available to pay for regular operations in between property tax distribution cycles. In Cook County, property tax bills are typically due on August 1st for the second installment tax bill and March 1st for the first installment tax bill. This means that the District needs at least 5 to 6 months in fund balance reserve, in between when the property tax bills are due, to pay for regular operations and not incur debt. The Board’s commitment is to have sufficient funds in reserve to make all of our payments without borrowing money. Currently, the District has a 60% fund balance reserve and will need to continue to build this reserve in order to meet current and future financial obligations.