|A Question of Competitiveness: The Cases for and Against the Rock Island County Sales-Tax Referendum|
|News/Features - Local News|
|Written by Jeff Ignatius|
|Thursday, 26 March 2009 08:21|
If you paid attention to the Davenport Promise proposal, the arguments in favor of a 1-percent sales tax for school construction in Rock Island County will sound familiar: This is the way we can be competitive with surrounding areas; this is the way to attract and retain residents; this is what we need for the future workforce.
There are three key differences, however: The Rock Island County proposal - which is on the April 7 ballot - is easy to explain and grasp; the vote will be held in a Democratic and union stronghold; and it involves a new tax, rather than shifting an existing one.
The first two factors should work in favor of the referendum, and it will almost certainly get more support than the Promise, which only garnered 39 percent of the vote on March 3.
But the sour economy hasn't put voters in a giving mood. The Illinois General Assembly in 2007 allowed counties to seek a sales-tax increase for school construction; eight of 10 referenda have failed.
The leaders of the Rock Island County Kids First organization - the primary force pushing for the sales-tax increase - said they are concerned about the Promise results, but they also highlighted the differences.
"There was enough confusion over there about how it [the Promise] would operate and what the future would bring," said Tom Getz, co-chair of Rock Island County Kids First.
This tax is simpler: An additional 1-percent sales tax would be levied in Rock Island County except on groceries, prescriptions, medical supplies, and titled property such as cars and boats. Based on last year's sales-tax revenue, that would generate an estimated $14.4 million a year, which would then be distributed (based on enrollment) among school districts in the county for capital projects.
According to Rock Island County Kids First estimates, more than 80 percent of that money would go to four urban districts: The Moline school district would get $4.9 million over the course of a year, Rock Island $4.1 million, East Moline $1.6 million, and United Township High School $1.1 million.
In Rock Island, the sales tax would be 8 percent generally, but 9 percent for food and beverages served in restaurants and bars. In Moline, the sales tax would be 8.25 percent generally, but 9.25 percent for food and beverages. The sales tax in Scott County is 7 percent. (See sidebar for a breakdown of local sales taxes.)
Proponents of the Rock Island County sales tax argue that the lack of a funding mechanism for capital improvements puts Illinois schools at a competitive disadvantage with their counterparts in Iowa, where there's already a 1-percent sales tax for schools built into the core state sales-tax rate.
Opponents say that a new sales tax would put businesses at a disadvantage, and that residents should wait to approve a new tax until it becomes clear what federal and state money might be available for school construction projects.
Proponents: Competing with Iowa
The primary argument in favor of the tax is that schools in the Iowa Quad Cities have been reaping the benefits of a similar tax for more than a decade. Getz said that over 10 years, Scott County schools have gotten $153 million for capital projects.
Last fiscal year, the sales tax for schools generated $15 million for the Davenport district, and almost $4 million for the Bettendorf district, according to the Iowa Department of Revenue.
"This is the result of seeing what's happened in Iowa the last 11 or 12 years," Getz said. "We need to compete with Iowa, we feel ... . We find more people coming to the community make that choice [Iowa] instead of this choice [Illinois]. ... We need to put our kids in the right kind of learning environment."
Mary Lagerblade, who has worked for two decades in real estate and is the other Kids First co-chair, said that many people relocating to the Quad Cities literally look at schools - the buildings themselves.
"They wanted to look at schools first, and then they would decide where to live," she said. With 20 schools rehabbed in Scott County, she said, visitors' "perception would be that Iowa took education very seriously. When you bring them to Rock Island County, they don't see and they don't get that feeling that the community has education as its number-one priority."
"You see the difference" between schools in Iowa and Illinois, said Randy Jacobs, another supporter of the tax. "It becomes almost a no-brainer. So it [the lack of a funding mechanism for construction] puts us as a county ... at a real disadvantage."
There are a number of other benefits to a sales tax for schools, supporters say, including construction jobs, which get unions and contractors excited.
Rock Island County Kids First also claims that better learning environments lead to improvements in achievement.
A survey (by the Australian government) of research into the correlation between school infrastructure and student achievement backed that up. It concluded that "student academic achievement improves with improved building condition; individual factors, such as lighting levels, air quality and temperature, and acoustics, have an effect on student behavior and outcomes, although there is limited quantitative evidence available on some of these factors; and new and emerging trends in school building planning and design and their impact on student outcomes and behavior have yet to be evaluated using a rigorous research methodology."
Education is not only bricks and mortar, Jacobs said, "but the bricks and mortar do make a difference."
"Our schools average over 54 years" old, Getz said, "and in fact in Moline over 60 years old."
Furthermore, Rock Island County Kids First notes, a sales tax is paid not only by residents but by visitors.
Getz argued that the sales tax could result in lower property taxes - although that's certainly not guaranteed.
"A lot of current repair and maintenance and construction comes from the property tax, and this should ease pressure on property taxes," he said. "We believe school districts will either hold the tax where it is or, in the case of United Township, they've already announced that they would use part of this revenue ... to reduce their property tax [rate] by eight to 10 cents."
Jacobs added: "The 1-percent sales tax really represents a fundamental shift in how public education is funded."
All of those things might be true, but it doesn't speak to a need for new money for school construction.
Referendum supporters who met with the Reader earlier this week were initially hesitant to produce a list of projects that the sales tax might fund.
"That's what they [voters] need to ask their school boards," Getz explained. "We don't want to come out with a laundry list for all the school districts. ... People say, 'Well I don't think that's the right priority in my school district.'"
He added that he thinks school boards won't spend wastefully: "They know they're all out the next election" if they waste money, he said. "They know they've got to spend it efficiently and effectively."
Those boosters eventually agreed to compile a list of school districts' construction wish lists. (See sidebar.)
Rock Island County Kids First plans to spend $40,000 to push the referendum. Getz said they'd already raised more than $20,000.
The Davenport Promise vote and the failed sales-tax referenda in other counties have shown that voters need to be convinced; they won't rubber-stamp any proposal that's meant to boost education.
"Yeah, we're concerned, and we've got a small but vocal minority that's against it," Getz said. "Mainly they just don't want to see any new taxes at all."
Opponents: Wait and See
That would be Rock Island County Citizens Against Taxation, which representative Lawrence Bay said includes about a dozen people. He said they plan to spend $1,000 on their campaign against the tax, but it doesn't sound very coordinated, and he stressed that it's not an organization. "Mostly it's people doing whatever they feel like doing," he said.
Despite the group's name, Bay's argument against the referendum isn't anti-tax. While proponents of the tax talk about the competitiveness of schools, Bay discusses the competitiveness of businesses.
"We feel it's the wrong time for such a measure," he said. Because the sales tax would be significantly higher on the Illinois side of the river, he said, in this dreadful economy people will vote with their feet. "Consumers would quickly realize that they could easily save $500 per year by doing their shopping and dining in Davenport," he said. The result would be businesses closing their doors in Illinois.
But many businesses support the tax. Rick Baker, president and CEO of the Illinois Quad City Chamber, said his organization included a question on a 1-percent sales tax for schools in an October survey of its members. More than 63 percent of respondents to that question said that they favor the tax, Baker wrote. (Sixteen percent of the chamber's members responded to the survey, he noted, and 85 percent of those people answered that particular question.)
Terry Tilka, the owner of RIBCO in downtown Rock Island, said he will "absolutely" raise his prices if the tax passes. He also said that business is bad enough in this recession -- the club on March 9 closed for lunch -- without higher taxes on merchants. "To keep raising taxes in this economy is ridiculous," he said. "They just need to manage their money better."
Bay also said that the referendum comes at a time when the federal and state governments are considering funding school construction. If money comes through, it could make a tax unnecessary. "We ... don't know what money will be coming from Washington and Springfield," he said.
Illinois Governor Pat Quinn has proposed using for school construction 10 percent of the revenue from a 50-percent income-tax hike that he presented to lawmakers last week in his budget address.
Bay stressed that there would be nothing preventing backers from coming back to voters at a later date - when it becomes clear what, if any, federal and state money is available, and when we have a better sense of how bad the economy is going to get.
"We could defeat this ballot at this time, and it could be almost certainly brought back on the 2010 ballot," he said. "We would have an opportunity to see how much money is actually coming in."
Supporters of the tax have a response to this. "We don't see any help coming from Springfield or Washington," Getz said. "We need to take it into our hands here."
But Bay's point remains a good one. Citizens would be right to be skeptical that federal or state school-construction money will be available, but there still remains that possibility.
The risk, Bay said, is a tax that hurts businesses. "It is the wrong time to put in place a permanent tax increase that could cause serious damage," he said.
Technically, the tax doesn't sunset, but Getz said that "there is a provision that the county board can be petitioned, and it can come back on the ballot again."
But Jacobs quickly added that "they can't take it [the tax] off as long as there's a bond in force in that county," which makes removing the tax a remote possibility.
Bay stressed that he could be convinced to support the sales-tax increase, despite the name of the group with which he's associated. But that would require first settling the question of whether federal and/or state money is available. "A person would be foolish if they said they would never reconsider a position," he said.
Bay conceded that "there are some situations in Rock Island County where there is a crying need for improvements in school facilities," but he also said there hasn't yet been a clear demonstration of need. "Everybody could find a way to spend more money."
For more information on those supporting the referendum, visit http://www.kidsfirstil.org.
For more information on those opposing the referendum, visit No2Tax.net.
Iowa: The core sales-tax rate in Iowa is 6 percent, which includes 1 percent for school capital projects.
Scott County also has a 1-percent local option sales tax, bringing the rate to 7 percent.
Illinois: The core sales-tax rate in Illinois is 6.25 percent.
In addition, municipalities can levy additional sales taxes. For example, Moline has a home-rule sales tax of 1 percent, and Rock Island 0.75 percent. East Moline and Silvis have non-home-rule sales taxes of 0.5 percent. The general-merchandise sales tax in Illinois therefore varies. In Moline, it's 7.25 percent, Rock Island 7 percent, and East Moline 6.75 percent.
Moline and Rock Island also have a 1-percent food and beverage tax for prepared food, such as meals served in bars and restaurants. Those items have a sales-tax rate of 8.25 and 8 percent, respectively.
Supporters of the 1-percent sales tax for school construction supplied the following "wish list" of projects based on the input of individual school districts.
"This funding would enable the districts to provide appropriate 21st Century learning environments for students," tax supporter Randy Jacobs wrote.
Rockridge School District
Facility enhancement/additions to relieve overcrowding at the following schools:
Andalusia Elementary 94 percent of capacity.
Illinois City Elementary 110 percent of capacity.
Reynolds Elementary 99 percent of capacity.
Taylor Ridge elementary 116 percent of capacity.
Students are currently receiving individual instruction in hallways, custodial closets, and on the stage. Basically, anywhere we can find an open space, we utilize it.
Specifically, classrooms, library/computer labs at each building. Presently none of the elementary buildings have a "library," and none of the elementary buildings have a computer lab to take an entire class to conduct work/research on a computer.
According to our architect, most districts begin to look to address their building/facility needs when a building is anywhere from 80 to 85 percent of capacity.
Classroom remodeling, including equipment and technology upgrades.
Upgrading labs for science, computer, and vocational educational classes.
Much needed electrical upgrades to help implement improvements.
Possible classroom additions.
Allow Moline School District Number 40 to recoup some of the revenues lost as a result of its continued support of TIFS ($1.9 million last year).
New classroom space to reduce class size, improve efficiencies, and offer greater flexibility.
Facilitate the addition of sixth graders at the middle school level.
Provide state of the art technology labs, equipment, and capabilities.
Update and expand media centers.
Provide climate control.
Expand and upgrade physical education and health facilities.
Continue recent trend of freezing or lowering our property tax rate.
Last year's rate was the lowest in over 20 years.
All monies will go toward financing a new school
Jefferson addition was diminished from plan due to the economy. The media center and new secured entrance were removed from the project.
Ridgewood addition was diminished from plan due to the economy. The media center and new secured entrance were removed from the project.
Increase the technology capacity in classrooms.
Update science laboratories in the High School and Middle Schools.
Replace worn out roofs, doors, windows, flooring, parking lots, and exterior masonry restoration.
Reduce the maintenance budget by replacing worn out heating/ventilating systems with new energy efficient systems, including geothermal.
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