D122 Looks to Refinance Debt to Save Taxpayers Money
The school board was presented with two options to save taxpayers money in the near future by lowering the bond and interest tax rate.
Because every New Lenox School District 122 board member showed concern that taxes were too high on the community, they were given options to refinance debt to lower the burden for the next few years.
Under the board's current bond and interest payment plan, that tax levy will increase from about $8.3 million in December 2010 to about $12.1 million by December 2013. During a strategic planning session Monday night, Bill Hepworth of Robert W. Baird & Co. presented the board with a couple options to restructure this plan.
Originally, the district structured its debt repayment for new buildings with conservative estimates based on assumed growth from new families and taxpayers.
"Then the economy hit the skids," Hepworth said. "Because of what has happened with the lack of growth and the projections, we’re looking at substantial increases at bond and interest tax rates."
But the two options presented Monday would lower taxes in the short term, though increase interest and debt for the district down the road, a balance the board members will need more time to find.
The first option involves raising the tax rate by just 1 cent for the next five years; the 2010 tax rate was $0.62. For a taxpayer with a $300,000 home, that could mean $95 off the tax bill in 2011 and as much as $350 in 2014. However, it would increase the life of the district's debt, adding $22 million through 2027.
Another option would add 2 cents to the current tax rate for the following seven years, saving taxpayers slightly less ($85 in 2011 and $300 in 2014) but without adding as much interest (about $16.5 million).
"This is a balancing act that if we don’t do something, our taxpayers would need to be paying higher taxes than they probably need to," Supt. Mike Sass said.
Some board members seemed to agree with the second option, but others wanted to see other scenarios to refinance. The board could decide to refinance between September and November.