Residents outraged over possible tax hike for city schools
BY ROSALIND ROSSI Education Reporter August 11, 2011 1:08AM
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Some city residents were outraged Tuesday night that Mayor Rahm Emanuel’s new schools team was seeking to raise property taxes by $150 million while $868 million in tax increment financing funds that could help schools is sitting unallocated.
During the first of three hearings over a proposed nearly $6 million Chicago Public School budget, Sonia Kwon of the parent group Raise Your Hands said she was “flabbergasted” that CPS was not seeking to have unallocated tax increment financing funds declared a “surplus” so they could help plug the CPS deficit instead of raising taxes.
“TIF is our tax money,” Kwon told CPS officials seated in a dark, sunken orchestra pit in the auditorium of Lane Technical High School.
“In this time of job loss and foreclosures, how can you justify raising taxes while holding onto $868 million in taxpayer money?” Kwon asked.
CPS officials say they made nearly $400 million in cuts, including cancelling $98 million in promised 4 percent raises to unionized workers, before opting to hike property taxes for schools to the maximum allowed by law for the first time in four years. Even with the massive tax jump, CPS will be spending more than it is taking in for the second year in a row, forcing it to tap $240 million in reserve funds to stay in the black.
Kwon estimated that $464 million of the $868 million in unallocated TIF funds would accrue to CPS if Emanuel declared the unused money a “surplus,” as former Mayor Daley did with a portion of unused TIF money last year. In fact, CPS officials said, $17 million of the $140 million in surplus TIF funds CPS received last year is being used this coming school year to help plug what was a $712 million CPS deficit.
Tax breaks given to “big companies” as a result of TIFS are unfair, given the reductions in staff some schools are facing, said Malagos Roman, a school custodian who complained that 200 custodians were being laid off as part of $400 million in CPS cuts.
“The schools need the money, not the big companies,” Roman said. “It’s our money. It’s our taxes. It’s for us.”
The outrage over higher taxes in tough economic times even drew periodic applause for speakers like Tina Padilla.
“You mentioned a shortfall,” Padilla told CPS officials. “Don’t you think that the citizens of this city have shortfalls? And you’re asking them to pay more taxes.”
Speaker Angelina Navarro agreed, saying, “We are going to end up losing our houses because we won’t be able to pay the taxes.”
The $150 million property tax increase is unusually high in part because CPS is seeking to pull in an extra $53 million by raising a Public Building Commission levy for the first time in four years. That money, they say, will be used to pay off debt service on bonds for the schools that the Commission builds.
In total, officials said, owners of an average Chicago home worth $250,000 should see their taxes rise by $84 — to $1,860.
CPS does not have direct control of whether a TIF surplus is declared, but after complaints last year about the city’s use of TIF funds, Daley declared a TIF surplus and released some of the money to bail out the CPS budget. CPS officials said Tuesday night that they actually received $140 million in TIF funds from that surplus, when only $90 million was originally anticipated and budgeted.
Chicago Teachers Union officials charged the CPS budget is riddled with similar miscalculations. CTU President Karen Lewis said Tuesday that CPS made a “frightening” error in school enrollment projections on its online budget documents that it has since corrected while insisting the mistake does not affect its budget calculations. However, Lewis said, such mistakes could be “solved easily” if CPS would hold public hearings on its budget far earlier than only a few weeks before school board members vote on the matter.
“This process has to be changed because this looks like a done deal,” Lewis said. “I guarantee you we could find positions [to cut] and help you if you would allow us to be real partners” in the budget process.
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$868 million in tax increment financing funds that could help schools is sitting unallocated
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