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MADISON - ST. CLAIR RECORD

Thursday, April 18, 2024

Madison County school boards may seek sales tax increase for construction costs

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Madison County school boards could move forward with a sales tax referendum that would go toward construction costs.

A proposed 1 percent sale tax would apply to consumer goods that would be paid for largely by those outside the county, according to Regional Superintendent of Schools Robert Daiber.

“A good percentage of revenue that is generated from this is not paid by Madison County taxpayers," Daiber said. "It is paid for by individuals passing through that may be buying things at interstate marts."

The tax was shot down by voters in a 2011 referendum, but Daiber said voters might act differently this year.

“I think that maybe there is a more sincere need for it, maybe viewed by the public because of the current issues and funding education by the state," he said. "There is no capital construction assistance right now. Most all of our districts can express a more sincere need."

He also said about six new schools had just opened in 2011, so many residents didn’t see a need for the fund.

“Unfortunately to those districts who didn’t have bond issues that were successful for construction they are in greater need right now for facility maintenance,” he said.

However, Madison County Board Chairman Kurt Prenzler has said he is against the tax and points to the overwhelming rejection of the 2011 referendum as an indicator that voters do not have an appetite for increased taxes.

“It was defeated by 81-19 percent,” he said.

He also wrote about taxes in a recent post in which he discussed how the referendum to lower the tax levy for the Madison County government “was approved by the voters by a margin of 4 to 1.”

“The Democrats and AFSCME government employees' union challenged the petitions, but we survived the challenge, because we simply had the necessary signatures,” Prenzler wrote.

He also pointed to the increase in number of Republicans on the county board, saying: “This may be the first time Republicans have a majority of the Madison County Board since the 1920s.”

He indicated that the 2016 election was a voter mandate to lower taxes.

Yet, Daiber said an increase in sales tax revenue for the county is a good reason to consider a sales tax increase for 2017.

“There has been an almost $2 million growth in sales tax revenue from 2011 when the initiative was put forth to today,” he said.

While Daiber said the regional office wouldn’t benefit greatly from the tax, the 13 school districts in the County would.

“The 13 districts would utilize the funds to do one of two things: maintain or complete new construction projects at schools or two, pay down existing bond debt of those construction bonds, which would reduce their debt,” he said. “The 1 percent sales tax can also be used to do a reduction in their levy on their health-life-safety fund, which inadvertently would help to reduce property taxes.”

Prenzler countered that the "real" reason for the proposed sales tax increase is to create a new stream of taxes, between $20-23 million per year. He said that would allow investment bankers to issue more than $300 million of bonds, which would put taxpayers "deep in long term debt."

"That's why the largest contributors to the pro-tax effort in 2011 were investment bankers who will make money issuing these bonds," Prenzler said.

In the meantime, each board of education would need to pass its own resolution to get referendums on ballots.

“We have to have enough petitions pass that we have a representation of 51 percent of the students who live in Madison County," Daiber said.

The resolutions will need to be handed to the regional office by Jan. 17 and will need to be reviewed and ratified by Jan. 26 in order to make it on the ballot in April.  

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