Daily Herald Mea Cupa?

 

Right after last year’s school referendums, the Daily Herald published a massive analysis of how the tax cap was being evaded by school districts throughout its circulation area.

I sent a couple of editors rather critical emails pointing out that the research had to have been finished before the elections. In their replies, they admitted I was correct, but one said that the paper wanted to give the school districts the benefit of the doubt (or something like that).

Not so this year.

Now, a month and a half before numerous referendums will be voted upon, the Daily Herald’s crack education reporters Emily Krone and Jeffrey Gaunt have come up with a devastating new analysis of school district financial perfidy.

This time the subject is bonds and featured are capital appreciation bonds for which taxpayers pay interest on interest, similar to credit cards that are not paid off each month.

As one article puts it,

because only the loan amount — not the premium, not the interest — is counted under voter authorization, the district can still borrow more — without seeking voter approval.

What’s the short solution?

The Daily Herald prints sample ballots for Colorado and Illinois, which I have reproduced below:

Colorado ballot:

Shall Suburban High School District 1 increase its debt $20 million, with a repayment cost of $26 million? And shall district taxes be increased $1.30 million annually for the purpose of building and equipping three new elementary schools; and renovating, repairing and adding to John Doe Middle School and Jane Doe High School? Such debt bearing a net effective interest rate not to exceed 5.40 percent?

Illinois ballot:

Shall Suburban High School District 1 issue bonds in the amount of $20 million to build and equip school buildings; and renovate, repair and alter existing school buildings?

The research took an enormous amount of time. I know, because I did similar research on all the tax districts in the six county area after House Speaker Lee Daniels and Senate President Pate Philip pushed through legislation in 1995 to allow all tax districts to reissue non-referendum bonds to the extent they were repaying them in 1994. (In other words, whatever interest and principal were being repaid in 1994 would forever be allowed to be repaid, without any approval by the voters. If a district were making a payment of $100,000 in 1994, for example, that would mean it could borrow about $1 million without referendum approval.)

When I stopped keeping track in about 2000, about $1 billion in bonds had been borrowed that could have not been under the original tax cap…without voter approval. Note that amount is larger than what is being exposed in this story.

Oh, yes, this bond bill-- Local Government Debt Reform Act--was also passed in 1995 under Republicans Daniels and Philip. (Historical reference: as I remember it, a Legislative Research Unit study of DuPage County bonds in the 1990’s found over 90% were non-referendum. Think non-referendum water and airport bonds, along with the non-referendum school and park district borrowing. I’m told that county’s taxing practices were the motivation the tax cap.)

The Daily Herald has published summary articles, regional stories on individual atrocities at

· Carpentersville District 300,
· Hawthorn School District 73,
· Valley View Community School District 365U,
· Vernon Hills-based Hawthorn School District 73,
· Grayslake Elementary District 46 and Grayslake High School District 127.

an editorial and charts comparing all the school taxing district studied:

·Cook County Bonds
· DuPage County Bonds
· Fox Valley Bonds
· Lake County Bonds

The last article today harkens back to the Daily Herald’s refusal to publish it tax cap evasion findings prior to last year’s referendums. It allows the tax districts to blame legislators. What a disappointing way to end an explosive expose!

Apparently no taxpayer advocates could be found (or, at least, were allowed to comment in the article) to counterbalance the Pinocchio prevaricating educational bureaucrats and school board members whose line is basically, “the devil made me do it.”

The best way to find all of the stories is to type in the reporters’ names--Jeffrey Gaunt and Emily Krone—in the Daily Herald search engine, but even that brings up duplications. Remember the Daily Herald hides its stories after a week, so if you want to capture the content for future reference, you’ll have a lot of highlighting and pasting. And, you’ll have to print off the charts to capture their data.

There is more at McHenry County Blog, of course.