Taking a hit

BY BRIAN L. HUCHEL
Commercial-News

November 22, 2008 10:48 pm

— The numbers always have been in favor of Oakwood School District, according to Superintendent Keven Forney.
Consistent increases in the district’s equalized assessed valuation were marred only by random “blips,” such as a few years ago when the district lost about $4.5 million in EAV after the state increased the scope of the homestead exemptions.
But last year, the EAV went up remarkably, Forney said.
Not anymore.
In the wake of looming questions about the economy and dropping home and property values locally and around the nation, county schools and the government are seeing a potential drop in the funding available through property taxes.
Forney said superintendents in a number of neighboring school districts all saw a slight decrease in property values used for a tax base. Oakwood was no different.
“This year was almost flat line on EAV projections,” he said.
South of Oakwood, Jamaica Superintendent Mark Janesky has a different story. Devaluations in farmland, which makes up most of his district, led to annual decreases for almost a decade. At one point, the district went from $38 million down to $30 million in EAV during the course of just three years.
Recent times have been better, with increases each of the last two years. Slowly climbing out of the hole leaves Janesky less worried about the dropping property values — at least for now.
“Now a year down the road, I can’t tell you,” he said. “I think we all know it’s going to change. To what extent, I don’t know.”
Schools aren’t the only entities facing the potential for revenue problems as a result of the property values. At the courthouse annex, Vermilion County Board members budgeted around a sizeable chunk of missing money with this year’s budget.
Chairman Jim McMahon said the budget for the upcoming fiscal year, which begins Dec. 1, was put together with the anticipation of a loss of up to $20 million in the EAV. That’s a change from the previous year when EAV rose from $811 million to $854 million.
With the reduced EAV, the county is making sure not to stretch its capabilities.
“We’re not banking on money we may not get,” McMahon said.
In the city, Danville District 118 is on the opposite side and is not anticipating a reduction in the EAV, according to Shanae Hinkle, director of business and finance.
Hinkle, in an e-mailed response, indicated the 2008 levy is based on a 5 percent increase in the EAV for the district. She contends the economy at large would not drive such a drop, putting that kind of reduction on items such as the senior and homestead exemptions or reassessments of property valuations.
The school district took a hit of more than $200,000 to its revenue as a result of the exemptions in the 2006 fiscal year.
Property tax revenues aren’t the only area potentially hurt by the sagging economy. The Illinois Department of Revenue reported an expected major revenue shortfall as a result of the economy, with the potential of dropping $800 million for the 2009 fiscal year.
Estimates in the state’s three major areas — individual income tax, corporate income tax and sales tax — have come in below estimates for the first four months. Rising unemployment, slow consumer spending and reduced business activity are all blamed for the problem, which has hit 32 other states, including California, New York, Florida and Ohio.
Recent numbers in the housing market show little sign of an upswing in any area in this state. The Illinois Association of Realtors reported house sales dropped 21 percent in the third quarter while prices fell 8.2 percent.
With little change in the economy on the horizon, ideas are at least in the minds of those facing revenue drops. McMahon noted the county recently eliminated more than 20 jobs through attrition in an attempt to save money.
Other options would range from using technology advances as much as possible, eliminate any duplication of work or programs and merging different facets of the county offices, such as road commissioners taking more responsibility from the county in road maintenance and plowing snow in the winter, he said.
After a number of years of consistent increases, the potential for more flat lines in the future automatically brings ideas of cost-cutting to mind. He added the district has always tried to use good fiscal management.
“We have a reserve, but you can’t live off a reserve and you don’t want to get into reserve,” he said. “Those are your insurance policy.”
This is the first of a multi-part series looking at how the sour economy is affecting the Danville area.

Copyright © 1999-2008 cnhi, inc.