illinois county school facility tax public act 97-0542
DESCRIPTION
Illinois County School Facility Tax Public Act 97-0542. Presentation to McLean County School Districts September 25, 2013. Presented by Stifel, Nicolaus & Co., Inc. Jim Burgett First Vice President 618-830-9782 [email protected]. Anne Noble Senior Vice President 800-230-5151 x8488 - PowerPoint PPT PresentationTRANSCRIPT
Illinois County School Facility TaxPublic Act 97-0542
Presentation to McLean County School Districts
September 25, 2013
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Presented by Stifel, Nicolaus & Co., Inc.
70 West Madison Street, Suite 2400, Chicago, Illinois 60602Telephone: 312/269-0329
501 North Broadway, St. Louis, Missouri, 63102Telephone: 314/342-2993
2101 Eastland Drive, Suite B, Bloomington, Illinois 61704Telephone: 309/661-0004
Kevin HeidSenior Vice President
Anne NobleSenior Vice President800-230-5151 [email protected]
Sean McCarthyFirst Vice President800-230-5151 x2737
Tom CrabtreeFirst Vice President800-230-5151 x8457
Jim BurgettFirst Vice President
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Nontraditional Approach for Illinois Public Schools
Sales tax vs. Real Estate tax for school capital– Allows county voters to approve a sales tax to fund school facility
costs– 1% maximum in ¼% increments
Law went into effect October 2007
Law was based on similar law that is currently in place in every county in Iowa
Law was amended in August 2011– County Board no longer has to approve the tax
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Illinois County School Facility Tax Act:Election Results and Future Votes
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Counties where the CSFT has passed (18)
Counties where the CSFT failed in the November 2008 (X), April 2009 (X), February 2010 (X), November 2010 (X), April 2011 (X) Elections, March 2012 (X) Elections, November 2012 (X)Elections and (X)2013 Elections (41)
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Counties considering placing CSFT on the ballot March 2014 X
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Sales Tax Base:– Everything in the municipal and county sales tax base is
included in the tax base except for: Cars, Trucks, ATVs Boats & RVs Mobile homes Unprepared Food Drugs (including over-the-counter and vitamins) Farm Equipment and Parts Farm Inputs
Services are not taxed
– “If it is not currently taxed, it will not be taxed”
Low Impact on Key Business and Fixed Income Persons
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Use of Sales Tax Revenues
Uses of Sales Tax Ineligible Uses
New Facilities Direct Instructional Costs
Additions & Renovations Text Books
Security, Entrances, Safety, Disabled Access Buses
Ongoing Maintenance Detached Furniture & Fixtures
Architectural Planning Computers
Durable Equipment (non-moveable items) Moveable Equipment
Fire Prevention and Life Safety Operating Costs
Land Acquisition Salaries and Overhead
Energy Efficiency
Parking Lots
Demolition
Roof Repairs
Abatement of Property Taxes Levied to Pay Bonds Issued for Capital Purposes
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How to Use Sales Taxes
Pay as you go capital projects– Sales tax can be saved up over time
Issue new bonds for current capital needs– Support bonds with sales tax
Retire existing debt issued for capital purposes– Abate taxes – Refund qualifying debt
………Or any combination of the above
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D R A F T
The Money Follows the
Student
1 2 3 4 5 6 7 8 9 10 11 12
County District
2011-12 Housed Enrollment from Fall
Housing Report
2011-12 Housed Enrollment
adjusted for In-County Resident
Students (1)
Percent of Total
Adjusted Annual CSFT per
District (2)
Estimated Proposed Debt
Issuance with 1% Annual Growth in Sales Tax, 1.25x Coverage @ 5% Rate for 20 Years
(3)2012 District EAV
(4)
Final Maturity of
Existing Debt
Levy Year 2012 Debt Service per
District from ISBE Annual
Financial Report
Potential Abatement
Available Based on LESSER of CSFT Funds or FY 2014 Debt
Service
Effective Abatement $ Amount per
$100,000 House Value Based on
column 11
McLean LeRoy CUSD 2 830 825 3.4% $607,428 $6,561,718 $84,541,324 12/1/2026 $681,428 $0.72 $239.50 McLean Tri Valley CUSD 3 1,029 1,029 4.3% $757,628 $8,184,252 $142,608,465 12/1/2022 $578,106 $0.41 $135.13 McLean Heyworth CUSD 4 963 962 4.0% $708,298 $7,651,361 $80,530,725 12/1/2027 $590,354 $0.73 $244.36 McLean McLean County USD 5 12,894 12,894 53.4% $9,493,546 $102,553,688 $2,042,044,487 12/1/2029 $19,517,045 $0.46 $154.97 McLean Lexington CUSD 7 515 515 2.1% $379,182 $4,096,103 $65,334,811 12/1/2026 $515,191 $0.58 $193.46 McLean Olympia CUSD 16 1,911 835 3.5% $614,791 $6,641,254 $261,837,263 12/1/2025 $1,861,088 $0.23 $78.27 McLean Ridgeview CUSD 19 625 625 2.6% $460,173 $4,970,999 $109,548,247 12/1/2023 $1,060,416 $0.42 $140.02 McLean Bloomington SD 87 5,474 5,474 22.7% $4,030,376 $43,537,993 $839,232,516 12/1/2024 $3,785,526 $0.45 $150.36 DeWitt Blue Ridge CUSD 18 75 0.3% $55,221 $596,520 $116,313,872 $527,237 $0.05 $15.83
Ford Gibson City-Melvin-Sibley CUSD 5 8 0.0% $5,890 $63,629 $108,258,318 $516,479 $0.01 $1.81 Livingston Prairie Central CUSD 8 463 1.9% $341,208 $3,685,890 $192,548,646 $182,015 $0.09 $31.51 Woodford El Paso-Gridley CUSD 11 450 1.9% $331,324 $3,579,119 $145,825,089 $1,126,892 $0.23 $75.74 Woodford Eureka CUD 140 1 0.0% $736 $7,954 $177,465,887 $0 $0.00 $0.00
Total 24,241 24,156 100% $17,785,801 $192,130,478 $4,366,089,650
Per Student Revenue Estimate $736
September 9, 2013
For additional Information please contact:
(1) K-12 Housed Enrollment from the ISBE Fall Housing Report and adjusted to reflect in-county estimates by each district (Eureka, 1 if any, Prairie based on % of EAV)
(2) Based on 1% sales tax, derived from the Illinois Department of Revenue CST data, also excludes registered vehicles, less 2% State fee
(4) As reported by ISBE Annual Financial Reports and County
at 1-800-230-5151 ext. 8457
County School Facility TaxWorksheet for McLean County Schools
Debt Capacity and Abatement Impact Per District
Tom Crabtree
(3) Assumes 1% annual growth in sales tax
Prepared by Stifel Nicolaus & Company, Inc. on:
Calendar Year
Adjusted Net CSFT at 1% (1) % Change
2002 $13,820,811 N/A2003 $14,578,627 5.48%2004 $14,834,548 1.76%2005 $16,372,311 10.37%2006 $16,235,517 -0.84%2007 $16,155,518 -0.49%2008 $15,955,961 -1.24%2009 $15,291,642 -4.16%2010 $15,495,793 1.34%2011 $15,947,489 2.91%2012 $17,785,801 11.53%
Source of Sales Tax Revenues
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• Property taxes are paid just by home and property owners in the County
• Sales tax is paid by all shoppers, including visitors, passers-through on the interstate and college students
• Approximately 22% of McLean County sales tax revenue for the schools is produced by shoppers who do not reside in the County
• An additional 15% of McLean CSFT revenues is estimated to be produced by ISU and Illinois Wesleyan students
Source: PGAV Planners and ESRI
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How to Place Before Voters?
School boards pass a resolution
When School Boards representing more than 50% of the resident student enrollment in the county adopt resolutions, the Regional Superintendent must certify the question to the County clerk
County Clerk will place on the ballot at the next regularly scheduled election
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Required Language on the Ballot
Ballot Language (cannot change):
Shall a retailer’s occupation tax and a service occupation tax (commonly referred to as a “Sales Tax”) be imposed in (name of county) at a rate of (insert rate) to be used exclusively for school facility purposes?
Simple majority of votes cast needed to pass
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Distribution of Sales Tax
2% withheld by IL Dept. of Revenue - Same as all local sales taxes
Distributed by R.O.E. on a per resident-pupil basis
The money follows the student
Election DateNo Election
November 2013 Mar. 18, 2014 Nov. 4, 2014
Pass Resolution (School Districts)
Dec. 30, 2013 Aug. 18, 2014
Certify the Resolution (County Clerk)
No later than Jan. 9, 2014
No later than Aug. 27, 2014
Election Mar. 18, 2014 Nov. 4, 2014
File with IL Dept. of Rev. to Enact Tax
No later than Oct. 1, 2014
No later than April,1, 2015
Sales Tax Goes into Effect Jan. 1, 2015 July 1, 2015
Regional Superintendent Receive Funds from State
Approximately 90 Days after Jan.1,
2015
Approximately 90 Days after July 1, 2015
District Receives New Sales Tax Revenues
April 2015 October 2015
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Timeline is Critical
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It’s Different Because…
Communication challenges Unfamiliar type of school funding – explain
WHAT and WHY Requires explanation of need, by district
Organization is more complicated Coordinating multiple districts a challenge Unity among school districts is key
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It’s Different Because…
Community support can be elusive Abatement is hard to understand Consider projects needs that can be “touched
and seen”
Opposition more likely Sales tax referenda can attract organized
opposition Other municipalities might oppose
referendum
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It’s Like a District Referendum…
Time is your most important asset – don’t waste it
Build foundation from community engagement regarding facility needs
Someone has to take ownership to organize (county-wide)
District leadership commitment to informational communications
Strong campaign leadership for any “Vote Yes” Committee
Roles in a Campaign
District employees “on the clock and on school property” can only share factual information relating to any referendum – no “vote yes” activities
Districts (and district website/email) can only distribute factual information, fliers, newsletters, etc. – no “vote yes”
“Vote Yes” committee can include volunteers who are school employees or board members on their personal time
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Next Steps
Start talking NOW with community regarding possible use of sales tax revenue – seek input
Identify inter-district communication coordinator (“cat herder”)
Community support group organizes Develop purpose statements and pass
resolutions Do not assume work ends after resolutions are
passed Talk about “what and why” CSFT 24/7
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Introductory Video
Below is a link to a 10 minute video that gives a non-technical introduction to the basics of the County School Facilities Sales Tax and how it has been used across the State.
http://www.youtube.com/watch?v=Mv9LmF6baMM
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Key Resources
Lynda K. GivenKyle Harding
Chapman and Cutler111 West Monroe StreetChicago, IL 60603-4080Phone: 312/[email protected]
Jane QuinlanRegional Superintendent – Champaign County
Regional Office of Education #9200 South Fredrick Street
Rantoul, IL 61866Phone: 217/893-3219
Gloria DavisSuperintendent
Decatur School District 61101 W. Cerro Gordo Street
Decatur, IL 62523217/424-3010
Gregg FuerstenauSuperintendent
Taylorville CUSD 3512 West Spresser Street
Taylorville, IL 62568217/824-4951
Jon KilgoreSuperintendent
Pontiac THSD #901100 East Indiana Ave.
Lincoln, IL 61764Phone: 815/844-6113
Gloria CrookRevenue Tax Specialist Department of Revenue
101 West Jefferson StreetSpringfield, IL 62702
217/785-5970
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Important Disclosures and Certifications
Pursuant to revised Municipal Securities Rulemaking Board (“MSRB”) Rule G-23 (the “Rule”), in connection with new issues for which the Time of Formal Award occurs after November 27, 2011, a broker, dealer, or municipal securities dealer (“dealer”) is prohibited from acting as a Financial Advisor or Municipal Advisor, as defined in Section 15B of the Exchange Act of 1934 (as amended), to an issuer for a particular issue sold on a negotiated or competitive bid basis and subsequently switching roles to act as underwriter or placement agent with respect to the same issue. In compliance with the rules set forth by the MSRB, Stifel, Nicolaus & Company, Inc. (“Stifel”) is acting as an underwriter or placement agent and not a Financial Advisor or Municipal Advisor in connection with all services proposed and/or provided. MSRB Notice 2011-29 (the “Notice”) defines as “underwritings” both (i) the acquisition of all or any portion of an issue, directly or indirectly, from the issuer as principal, either alone or as a participant in a syndicate or other similar account formed for that purpose and (ii) acting as an agent for the issuer in arranging the placement of an issue. Additionally, the MSRB defines the role of an underwriter in the Notice, which states, “the primary role of an underwriter is to purchase securities in an arm’s-length commercial transaction between the issuer and the underwriter” and, “the underwriter has financial and other interests that differ from those of the issuer.” Furthermore, the Rule states that an underwriter may provide advice concerning the structure, timing, terms, and other similar matters related to the issuance of municipal securities to the extent the underwriter discloses that such advice is provided with respect to the underwriting and not in relation to a financial advisory relationship, as specifically defined in the Rule. Accordingly, any such services provided by Stifel as they relate to our role as underwriter or placement agent should not be construed as those of a Financial Advisor or Municipal Advisor and such notice, as described above, is hereby provided as set forth in the Rule.
Additional information is available upon request
Stifel, Nicolaus & Company, Inc., 501 N. Broadway, St. Louis, MO 63102
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This presentation contains proprietary information compiled by Stifel Nicolaus.
Reproductions can be made
with permission from Stifel Nicolaus.
Please call Tom Crabtree
for permission at
1(800) 230 5151
Extension 8457
THANKS