The one percent school sales tax: an analysis

On November 4th, 2014, a question appearing on the election ballot will ask whether the school districts in Morgan County can collect a tax to be used only for school facilities. The 1% sales tax proposition is intended to relieve the necessity of property tax increases for facility maintenance and construction.

Following are a few questions in regard to the issue:

Does the physical condition of a school facility have a bearing upon the educational process? 

Does the appearance of a school, inside and out, have a bearing upon opinions about the educational process? 

Is the perception of the educational system a factor in business and family decision-making about moving to a community?

Will the schools ever need funding for facilities? If the school system ever needs funds to repair, replace or construct school buildings, what would source of those funds? The property tax.

If this issue does not pass, at some point in time, the school district will need a referendum to increase property taxes for facilities repair and construction. If the community continually defeats property tax increases, buildings will deteriorate until they cannot provide for the instructional program. When the circumstances become dire, then a property tax will be passed. By that time, the schools may be embarrassing symbols of a community that will not provide for the education of their children. And then … a property tax increase will finally be passed to correct some of the problem. The result would be a negative community reputation and a property tax increase.

The 1% sales tax (1 cent per dollar) will provide school districts with a flow of money to help keep facilities current and safe. The owners of property will no longer be the sole supporters of school funding. All persons who purchase taxed items will share in the support of the schools. The additional funds can only be used for facilities, not for salaries or supplies.

What is taxed? Items not taxed now will not be subject to taxation under this measure. The sales tax only applies to certain items. Those items are the remaining list after the exclusions are removed. That is, rather than trying to list everything that qualifies for the tax, the law stipulates items that cannot be taxed. The sales tax may not be imposed on the sale of food for groceries, cars, trucks, RV’s, prescription and non-prescription medicines, medical appliances, farm feed, seed or machinery, and factory machinery. No services are taxed. See the Illinois Department of Revenue for a complete list of exemptions. 

Why isn’t there a sunset (a set ending date) to the tax? 

This decision is governed by state law. Public Act 095-0675 does not provide that an arbitrary ending date be established.  Part of the rationale for that thinking is that there is no way to project what the needs might be at the end of an arbitrary time period. For example, if there were an arbitrary time period of 15 years, the tax would expire regardless of the needs of the schools at the time. The wording on the ballot is mandated by state law and local entities may not add or subtract any element.

In accordance with the legal provision, the 1% sales tax could be discontinued at such time that the school districts no longer need funds to construct, repair or maintain buildings. If the school boards or county commissioners wish to discontinue the tax, they may place the question on an election ballot, or, a petition of registered voters can place the question on the ballot at any time in the future.

Current property taxes have no sunset provision. 

The intent of the sales tax increase is to provide a stable and continuing source of financial support so that school districts can plan for facilities maintenance with the confidence of being able to pay for needed work. 

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