A proposed 1 percent county sales tax for schools failed by a relative handful of votes last November – just 262 out of almost 77,000 cast.
Proponents were hopeful the tax would prevail the second time around this spring with a little more voter education. Since then, however, the economy has fallen deeper into recession and the impeachment (and indictment on Thursday) of former Gov. Rod Blagojevich has eroded voter trust.
"This is a rough environment to be thinking about raising taxes, particularly when the state is proposing to have a large increase in the state income tax," said Professor Daniel McMillen, an economist at the University of Illinois Institute of Government and Public Affairs.
Acknowledging those hurdles, proponents argue the sales tax would be an economic stimulus for the county. It would generate $18 million for capital improvements, by the latest estimates from the Regional Office of Education.
School districts could use the sales tax money for construction, renovation, maintenance and repairs, energy-efficiency work or for paying off building bond debt. And that means jobs for labor unions, said Del Ryan, campaign manager of the CLASS (Citizens Looking At Supporting Schools) committee campaigning for passage of the tax.
"If they have more money, they will spend more money in the community," said Ryan, former principal of Mahomet-Seymour High School and now interim principal of Washington Elementary in Monticello.
Ryan described the tax as a structural change away from property taxes that will broaden the tax base for schools.
If the majority of voters approve the 1 percent sales tax, Champaign County residents will pay a penny more for every dollar spent on clothes, household goods, appliances, gas, eating out and most other retail expenses.
To counter that, property owners in most of the county's school districts could see their property taxes drop. School officials promise to pay off building bond debt – now paid with property taxes – with some of the sales tax money.
Of the 14 districts in the county, 11 have building bond debt and have pledged to pay it down and abate property taxes. The owner of a $150,000 home in the Urbana district would save an estimated $66; a similar homeowner would save $100 in the Prairieview-Ogden district and $375 in the Tolono Unit 7 district.
The business community and others are a bit leery of those promises, since the tax abatements aren't required by law, said Alan Nudo, president of the realty firm Robeson's Inc. and a Republican county board member. He supports the sales tax, but he also thinks more protections should be built into the law.
"I think people are generally in favor of having school districts with well-constructed facilities. It attracts businesses, it attracts jobs if you have a good school system," Nudo said. "The fear in all people is that governments say they're going to do something and they don't do it."
He's working with the Champaign County Chamber of Commerce and state legislators to add a sunset provision to the 2007 law allowing counties to impose the sales tax so that it would expire after a period of time or would have to be re-enacted by voters.
They also want to require that a portion of the sales tax money be used to pay down any existing bond debt and abate taxes; ensure the state doesn't shut out school districts receiving sales tax money when it doles out school construction funds; and require districts to present a revenue purpose statement, outlining how they'll spend the tax money, to voters.
Laura Weis, president and CEO of the local chamber, said her agency supports alternative school funding methods but "the law, as it currently stands, is very problematic."
State Rep. Chapin Rose, R-Mahomet, said he likes the chamber's proposals because they would "empower taxpayers." But it's probably too late to get something passed this spring, he said, as the deadlines for introducing new bills has passed and state leaders are preoccupied with budget issues. Even if he could, legislative action would come after county voters decide the issue Tuesday.
"As a matter of political reality, it's going to be a bit of an uphill battle to change things because some counties have already passed it," he said.
The amount to be generated by the tax, and how much property tax relief residents might see, has been adjusted since the fall to reflect more current data on retail sales and property values, Regional Superintendent Jane Quinlan said.
"The idea we're trying to get across to people is, this is a good investment, not just a tax," said Chris Kaler, executive director of the Rantoul Area Chamber of Commerce and co-chairman of the CLASS committee. "It's an investment in your school system."
Kaler said some of the planned uses for the sales tax money will reduce energy costs. Without an alternative revenue source to pay for improvements, he said, property tax money will have to be used for general maintenance and taxpayers face "a very good chance of seeing their property taxes going up."
The Rantoul City Schools district would use its share of the sales tax money to replace inefficient windows and boiler systems and upgrade electrical systems that date back to the 1950s and '60s.
Replacing single-pane windows with double- or triple-pane windows and replacing boiler systems with geothermal heating and cooling would make schools more comfortable and reduce energy costs, said Superintendent Bill Trankina. And the electrical upgrades would allow classrooms to use technology better. Without the sales tax money – or a property tax referendum – those projects would be cost-prohibitive, he said.
"Everyone's concerned about taxes in this particular economy," Trankina said. But "I believe, for our community, (the sales tax) permits us to access revenue that's just not available to us otherwise."
The Urbana school district would like to repair or renovate Washington Early Childhood School, among other projects, with its projected income. The school lacks Internet access in half the building. Washington has flooding problems, and its second floor is not wheelchair-accessible.
If the sales tax fails, the only way to pay for those projects is to ask voters for a property tax increase, spokesman Mark Schultz said.
Champaign officials hope for stimulus money, and they are applying for other grants for projects such as making buildings energy-efficient, Superintendent Arthur Culver said. But that money couldn't be used to build a new school.
"It still wouldn't be enough to pay for all our needs" if the sales tax fails, Culver said. "It would take a property tax referendum."
The CLASS committee tried to campaign on a grass-roots level this spring, talking with voters one-on-one and developing brochures detailing how much each district would receive and how it would spend the money. Each district has different debt and building needs, Ryan said. "I think we've done a better job this time getting voters in each of the 14 districts to understand what's going to happen in theirs," he said.
Each district also identified someone to get information out to community leaders, so they are able to answer questions, Kaler said.
"If we win them over, we ask them to do the same with their friends," he said. "We've been able to change a few minds."
One point they've had to clear up: confusion about how the sales tax money would be distributed. Many voters mistakenly thought the tax on any items purchased in Champaign would automatically go to that district, Ryan said.
Kaler said he heard comments such as, "This money is going to come from Champaign, isn't it? There's no way they're going to share that money with us."
That's not how it would work, Ryan said. The money "goes into one big pot and is divvied out per capita to each school district."
Nudo is confident the tax can be "revenue neutral" if safeguards are added. A homeowner slated to get $300 lopped off his property tax bill would have to spend $30,000 to pay the same amount of sales tax at the 1 percent rate, he said. And the tax doesn't apply to groceries, prescriptions or vehicles.
An estimated 30 percent of the sales tax will be paid by people from outside the county who spend money at regional shopping centers or come here for UI events, Nudo said.
Breakdown of what each school district would get from 1 percent sales tax, and what property tax abatement would be for an owner of a $150,000 home:
District Estimated revenue Abatement
Champaign $7,223,164 $32
Fisher $485,649 $45
Gifford $160,087 $275
Heritage $427,156 $125
Ludlow $66,190 no bond debt
Mahomet-Seymour $2,091,139 $140
Prairieview-Ogden $199,399 $100
Rantoul City Schools $1,219,125 no bond debt
Rantoul High Schools $574,159 $80
St. Joseph $691,146 $100
St. Joseph-Ogden $346,352 $60
Thomasboro $164,705 unavailable
Tolono Unit 7 $1,262,996 $375
Urbana $3,142,481 $66
Sources: Citizens Looking At Supporting Schools (CLASS), Regional Office of Education
Proposition to Impose County School Facility Occupation Taxes
Shall The County of Champaign, Illinois, be authorized to impose a retailers' occupation tax and a service occupation tax (commonly referred to as a "sales tax") at a rate of 1% to be used exclusively for school facility purposes?
What can and can't be taxed
The proposed 1-cent sales tax would apply to most consumer items, including clothes, appliances, electronics, gas and restaurant meals. Items that are not subject to the tax are groceries; prescription drugs and medical supplies; titled vehicles, including automobiles, RVs, boats and mobile homes; and farm equipment.