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Whiteside officials begin studies of sales tax

If passed, Sterling could see $1.5 million-plus a year

Published: Thursday, Nov. 8, 2012 1:15 a.m. CDT

MORRISON – Sterling Public Schools would get the lion’s share of revenue – more than $1.5 million – from a 1 percent sales tax increase in Whiteside County, data presented at an informational meeting Wednesday shows.

The district could use its share of money to build a new school building, make energy efficiency upgrades or repair parking lots. It also could use the money to abate property taxes levied to pay off existing capital improvement bonds.

Whiteside County school officials considering a 1 percent sales tax increase met Wednesday night at Morrison High School for an informational presentation from Stifel, Nicolaus and Co., a brokerage and investment banking firm with expertise in Illinois K-12 finance.

School districts have “a lot of freedom within a very narrow path” in their use of the revenue from a sales tax for schools, said Tom Crabtree, the firm’s first vice president.

“As long as the word ‘facilities’ is involved, school boards may use the funds however they feel is most beneficial to their districts, ...” he said.

Districts may use the money to construct new buildings or add on to or renovate existing buildings, make facilities handicapped accessible or repair aging roofs or boilers, Crabtree said.

Districts often use Health/Life Safety funds to pay for building projects, but must receive approval from the state and often must use them only for repairs.

Districts also may use the sales tax revenue to reduce property taxes by paying off construction bonds, Crabtree said.

One school board member asked if property tax abatement is the big selling point of a sales tax increase.

Anne Noble, senior vice president at Stifel, Nicolaus & Co., said, in short, no.

“A sales tax increase has never passed solely on abatement,” she said. “Many school districts have some very compelling facilities needs.”

Whiteside County school officials are keen on considering a 1 percent sales tax hike because revenue is the lowest it’s been in the past 5 years and state aid is likely to take a big hit next year.

Voters throughout the state have weighed in on sales tax increases 35 times since the law took effect in 2007. Districts in 12 counties now are reaping the benefits of the additional revenue from the sales tax.

Lee County residents on Tuesday voted against a 1 percent sales tax increase, 59 percent to 41 percent. The Dixon School District planned to use its share of the money to build a sports and activities complex, while other districts would have used their portions to improve buildings or pay off construction bonds.

Whiteside County school officials have tried twice in the past 4 years to pass a tax increase. The last time, in April 2010, voters denied the referendum, 56 percent to 44 percent.

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