D181 board OK's $2 million abatement in taxes

Community Consolidated Elementary District 181 has too much money in reserves, so it’s giving some back to taxpayers.

That’s the simplified explanation of a decision the board made Monday night to abate $2 million in taxes in connection with its 2023 property tax levy.

The abatement, which will save the owner of a $500,000 home $109 a year on taxes, will reduce the bond and interest levy from almost $5.4 million to $3.4 million.

“Really the amount of the abatement was determined based on want we wanted the adjusted bond and interest levy to be, which is just a little under $3.4 million,” said Mindy Bradford, assistant superintendent of business and operations.

Abating from the bond and interest fund gives the board the most options with future levies.

“Essentially the bond and interest fund allows you to abate one year at a time, whereas if you abate out of the operating fund, that’s a permanent abatement,” Bradford said. “The bond and interest fund abatement gives you the flexibility to make a decision every year as to the right amount to rebate.”

Because the bond and interest fund is not subject to the tax cap, the abatement will not affect the base amount to which the tax cap is applied. The cap limits to the levy (5 percent or the previous year’s consumer price index, whichever is lower) is based on the amount in taxes collected last year.

The district will use money from its operating fund, rather than property taxes, to cover the $2 million in debt repayments.

In calculating the amount to abate, district officials kept in mind the upcoming costs for full-day kindergarten construction projects and retrofitting the new district office on Ogden Avenue, Bradford said.

Board policy calls for the district to maintain fund balances of 30 to 50 percent of total expenditures — or about 90 to 100 days’ worth — and to abate taxes if the percentage rises above 50. Unaudited fund balances were at 58 percent at the end of fiscal year 2023.

“This has been a longterm strategy for the board,” Bradford said. “The fund balance strategy was approved at the Nov. 9, 2020, board meeting, so this has been part of the plan since then.”

The district had larger bond and interest levies in 2023 and 2022, and so abated larger amounts to achieve the $3.4 million target — $5.9 million in 2023 and $6.1 million in 2022.

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Pamela Lannom is editor of The Hinsdalean