Residents within the Kaneland community may face additional financial pressures once the struggling economy begins to ease up if our local leaders fail to reach a consensus by Jan. 1, 2011.
That is the date the existing intergovernmental agreement (IGA) between Kaneland and the nine municipalities within it—Elburn, Sugar Grove, Maple Park, Kaneville, Montgomery, Aurora, North Aurora, Virgil and Cortland—is set to expire.
The IGA establishes a fee schedule of impact, transition, and land-cash fees that the municipalities agree to charge developers when new growth comes into the School District.
The idea behind the fees is to develop a way for residential growth to pay for itself.
Because Illinois school districts are funded primarily with local property taxes, and because Illinois property taxes are paid in arrears (at the end of the tax year, as opposed to the beginning), there is a significant delay between when new growth occurs and when the property taxes from that new growth make it to the School District.
The impact, transition and land-cash fees are designed to provide the funding to fill in that gap, without asking the current residents to subsidize the incoming ones.
With Kaneland being among the geographically largest school districts in Illinois, and much of that land being undeveloped farmland, there is potential for high volumes of growth as the economy begins to improve. Our area already experienced this in the 1990s and early 2000s, when our population doubled multiple times and our region was among the fastest-growing in the nation.
If no mechanism is in place for growth to pay for its own way, current Kaneland residents will be hit with higher-tax pressures to pay for new growth at the very moment that the light at the end of the tunnel is upon us.
The IGA was on the verge of being extended for another three years until last week. Prior to that, Kaneland had reached agreement with all municipalities except for Sugar Grove. At the Nov. 16 Sugar Grove Village Board meeting, Sugar Grove released a revised version of the IGA, which essentially cut the impact fees in half and reduced the transition fees to zero. Sugar Grove’s trustees decided to hold off on a decision on the IGA until a consensus could be built.
The difficult thing for those not in Sugar Grove to understand, us being included in that list, is that the only thing that prevented a consensus on the originally proposed IGA was the village of Sugar Grove.
Clearly, Sugar Grove’s leadership seeks residential growth as a way to draw in commercial growth, which would strengthen the community’s tax base and ultimately reduce the property tax pressures on its residents. With the economy struggling, they feel there is a need to provide incentives to prospective developers, and among those incentives would be a reduced school fee table.
While there are elements to Sugar Grove’s philosophy that may appear logically sound, the element its leadership is either not recognizing or disregarding is that if the school fees are significantly reduced or eliminated, current residents will feel more fiscal pressure. In effect, they would be subsidizing new residential growth until enough of it occurs to draw in suitable commercial growth, which is designed to ease the very fiscal pressure made worse by the plan.
In other words, the cure is potentially worse than the disease.
No one expects everyone to blindly sign off on every proposed agreement for the sake of solidarity. However, our community should be able to expect its leaders to work together and find a way to prevent current residents from being forced to subsidize new ones.
The deadline is Jan. 1. We urge our community leaders to make something happen before then.