Sales tax surveys planned

September 14, 2008

Holly Wagner

If Adams and Pike counties’ school superintendents have their way, voters will know exactly what districts would do with the proceeds from a 1 percent sales tax if it passes.

Voters in both counties are being asked at the polls Nov. 4 if they support raising the local sales tax by 1 percent. The proceeds would be shared proportionately by all the districts in each county — five in Adams and four in Pike — to pay for school building improvements.

If the advisory measure passes at the polls, county boards will decide whether to impose it and, if so, how much. Once it is imposed, county boards have the right to rescind it, unless any school district has a project tied to the tax.

If adopted, the tax will become effective July 1, 2009. Counties will begin receiving the new revenue in October 2009.

The superintendents will ask their boards this week for permission to proceed with a public survey that will provide information about what the tax is intended for and will ask voters how the funds should be spent.

The results will be presented at board meetings in October.

“This is an opportunity for us rather than dictating to them ... to ask voters what would you like those moneys spent for,” Quincy Superintendent Lonny Lemon said. “It seems like there’s not a lot going on, but the wheels are spinning as we prepare for the boards to say, ‘Go ahead.’”

School boards are bound by ethics laws to inform the public about ballot issues, but they can’t show support or objection to them. The surveys will be designed to provide information and then list each district’s most pressing needs and ask voters to help prioritize them.

The surveys would be sent home with students, included on district Web sites, and disseminated through the media.

“We want to try to get the input from our public as to, ‘If you would pass this, you tell us how you would like for us to use this money,’ ” Mendon Superintendent Diane Robertson said.

“This would be a really unique opportunity (to ask) the public for guidance rather than kind of dictate to them, as we so often end up having to do.”

Voters would learn of the results of the surveys at board meetings set for the third week of October.

Each school district has a list of projects that are on the 10-year life safety surveys that each district must submit to the state. Once a project is approved by local architects and the state, the districts are committed to complete the projects listed.

Districts usually pay for building projects with general obligation bonds and raise money through property taxes to pay off the bonds. The property tax bill includes the cost of acquiring the bond as well as principal and interest.

“It gets expensive,” Quincy Public Schools Business Manager Rich Royalty said. But under this proposed tax, he said, people who live outside the school districts and come into the county to shop will be helping pay the bill.

Some of the school districts are considering using the tax to help pay off debt. For example, Quincy has a little more than $4.5 million in debt, and Pikeland has approximately $10.7 million in debt while the Central and Liberty districts have no outstanding debt. This tax could allow districts to do building upgrades without issuing future bonds.

The sales tax would rise from 6.25 percent to 7.25 percent in Adams County, and from 6.75 to 7.75 percent in Pike County. Quincy already has raised its sales tax 1.5 percent to 7.75 percent, so the school facilities tax would raise it to 8.75 percent.

John Heidbreder, chairman of the Adams County Board Finance Committee, believes an increase in the sales tax might send shoppers elsewhere. He believes the county, Quincy and other towns that rely on sales tax revenue might have to increase their property tax levy to make up for reduced sales tax revenue.

“The net effect might not be much different than the current individual property tax total invoices,” he wrote in an email disseminated to the media.

That shoppers will go elsewhere “is always a concern,” said Amy Looten, director of the Quincy Area Chamber of Commerce.

“In general, our taxes are higher” than in the neighboring states of Iowa and Missouri.

“I’m not getting much from the business community, and I don’t know if it’s because it’s going to be asked for a vote as opposed to being imposed,” she said. “The chamber has not taken an official stand for or against it. We’re still researching the impact. ...

“The business community is no stranger to unfunded mandates,” she said. “I don’t know any answers, but I can sympathize.”

The Adams County Board, at its meeting Tuesday, passed a resolution that Ray Scheiter, regional superintendent of schools for Adams and Pike counties, present a report to the board in October detailing how the districts intend to use the money, should the sales tax be adopted.

Since the Adams County Board meets a week before the school boards, “I’m not sure what kind of a report I’ll be able to provide,” Scheiter said. “... I can’t dictate to the schools. It doesn’t work that way.”

The school facilities tax has been adopted by every county in Iowa. Illinois passed the school facilities tax last October over Gov. Rod Blagojevich’s veto. Legislators have been unable to pass a capital projects bill for schools since 2001.

The tax has since been adopted by Williamson County in southern Illinois. It will appear on ballots this November in Champaign, Iroquois, Bond, Calhoun, Marion and Kankakee counties, as well as Adams and Pike.

“The state is struggling,” Lemon said. “At least they’ve given our local citizens the opportunity to help themselves... not necessarily to build, or gain, but to maintain our buildings and keep them safe for our kids.”