School officials are asking for more input on cost benefit analyses before tax abatements are granted.
At their April 11 meeting, members of the board of education reviewed the overall process of granting tax abatements. According to state statute, before taxes can be abated, a cost benefit analysis must be conducted for the project; however, there is no mandate that school districts have input on information.
About $23 million of the district’s $267 million taxable assessed valuation had been abated thru 2015, and an additional $24 million has been abated just since the first of the year, most of it at the intermodal facility near Edgerton.
When abatements are granted, PILOT (payments in lieu of taxes) may be required; however, there is a misconception that all PILOT taxes go to the school district. According to USD 231 staff, only about 13 percent of PILOT taxes are returned to the district as additional revenue.
Because of changes in the way districts receive funding from the state, student growth projections that are either too low or high can have a direct impact on the district’s budget.
Student growth without needed revenue could result in a budgeting shortfall which would have to be made up elsewhere. If taxes were not abated, the district’s mil levy could decrease.
Recent cost benefit analyses done for two Edgerton spec buildings are estimated to provide about 500 jobs but only project an additional 14 students to the schools; the analyses also used the previous school finance formula that funded districts on a per pupil basis. That finance formula has been replaced.
At question is whether the estimate of 14 new students to the district and 500 potential jobs to the area is accurate. According to the cost benefit analyses completed for Edgerton, numbers were provided by the buildings’ applicants and were not verified.
As growth continues, it’s imperative good communication between all local taxing entities – and the state legislature – continue.