Post by proschool on Feb 2, 2008 14:31:41 GMT -6
Interest rate cuts could aid some referendums
Officials say loans could be paid off sooner, saving taxpayers money
By Jake Griffin and Kathryn Grondin | Daily Herald StaffContact writerPublished: 2/2/2008 12:28 AMSend To:
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(0) | read | post Paying off debt related to the myriad tax hike questions on Tuesday's ballot will take less money and time than originally expected.
Thanks to the Federal Reserve's interest rate cuts, it doesn't cost as much to borrow money nowadays, according to a bevy of school, park and other officials who are trying to get voters to approve construction projects or land purchases.
For instance, instead of the 20 years and $9.4 million in principal and interest it was going to take to cover the debt for a new Lombard Park District aquatic center, officials there said it will now only take 16 years to pay off a debt of $7.9 million.
The principal on the request is $5.9 million, so officials said they believe they can trim $1.5 million off the interest payments with the new rates.
"It's a savings," said park district Commissioner Jan Mills. "Every little bit helps."
The same goes for nearly 15 other tax hike requests before voters throughout the suburban Chicago area Tuesday.
"It has a huge impact," said Steve Messerli, executive director of the Fox Valley Park District in Aurora. "When we did our initial calculations, it was based on an interest rate of 4.65 percent, and now we believe we could achieve an interest rate of 4.2 percent."
Fox Valley is asking voters to approve a tax hike that would allow the district to borrow $44.8 million for land acquisition and other projects. The new interest rates would shave a year off the district's debt service and $8 million in interest, he said.
But the savings aren't enough to sway critics of the tax hike requests; they say it's a bad time to be asking for more tax dollars from cash-strapped voters.
"The rates are low, which is very true, but the point still remains that, economically, times are bad, and I don't care how they cut it, it's still increasing taxes," said Carol Schubert, president of the Barrington Enlightened Taxpayers Association.
Still, backers of the tax increases are jumping all over the news that costs will be less and payback will come sooner. That might sway the undecided voters.
"We are definitely trying to spread the word that this is going to be better for them," said Christy Sefcik, assistant superintendent at Grant High School District 124 in Fox Lake. "We were already in an accelerated debt schedule, but we're definitely going to pay less now."
Grant officials are asking voters for approval to spend $38.5 million to renovate the high school.
However, there are a few taxing bodies that might choose to pass the savings directly onto taxpayers immediately by reducing the requested tax rate slightly.
Naperville Unit District 203 is asking voters for permission to borrow $43 million, mainly to renovate Naperville Central High School.
Dave Zager, the district's assistant superintendent for finance, said it's likely district officials would trim the tax rate.
"The lower interest rates are not as impactful on long-term borrowing," he said. "We'd probably choose to have the taxpayer pay less."
But apparently not every taxing body is benefiting from the Federal Reserve's recent intervention.
"It will have minimal effect," said Tom Runty, assistant superintendent for business at Kaneland Unit District 302. "We'll actually be able to shave off a little bit, but not much."
Runty chalked that up to the district's lower bond rating, which probably won't allow it to access lower rates unless it purchases extra insurance, which would then likely negate most of the savings, he said.
Sweetening the pot
A look at some of Tuesday's ballot questions that may be affected by interest rate cuts.
Itasca: $1.75 million for library repairs
Addison Park District: $14 million for aquatics center
Barrington Park District: $12 million for recreational facility
Fox Valley Park District: $44.8 million for land and other initiatives
Lombard Park District: $5.9 million for aquatic center
St. Charles Park District: $25 million for land and maintenance projects
Wauconda Park District: $12 million for aquatic park
Big Hollow Elementary District 38: $10 million for district operations
Glen Ellyn Elementary District 89: $24.8 million for technology and building improvements
Grant High School District 124: $38.5 million to renovate high school
Wheaton Warrenville Unit District 200: $58 million toward new middle school
Naperville Unit District 203: $43 million for school renovations
Kaneland Unit District 302: $65 million for new school
Officials say loans could be paid off sooner, saving taxpayers money
By Jake Griffin and Kathryn Grondin | Daily Herald StaffContact writerPublished: 2/2/2008 12:28 AMSend To:
E-mail:
To:
From:
Name:
E-mail:
Comments:
(0) | read | post Paying off debt related to the myriad tax hike questions on Tuesday's ballot will take less money and time than originally expected.
Thanks to the Federal Reserve's interest rate cuts, it doesn't cost as much to borrow money nowadays, according to a bevy of school, park and other officials who are trying to get voters to approve construction projects or land purchases.
For instance, instead of the 20 years and $9.4 million in principal and interest it was going to take to cover the debt for a new Lombard Park District aquatic center, officials there said it will now only take 16 years to pay off a debt of $7.9 million.
The principal on the request is $5.9 million, so officials said they believe they can trim $1.5 million off the interest payments with the new rates.
"It's a savings," said park district Commissioner Jan Mills. "Every little bit helps."
The same goes for nearly 15 other tax hike requests before voters throughout the suburban Chicago area Tuesday.
"It has a huge impact," said Steve Messerli, executive director of the Fox Valley Park District in Aurora. "When we did our initial calculations, it was based on an interest rate of 4.65 percent, and now we believe we could achieve an interest rate of 4.2 percent."
Fox Valley is asking voters to approve a tax hike that would allow the district to borrow $44.8 million for land acquisition and other projects. The new interest rates would shave a year off the district's debt service and $8 million in interest, he said.
But the savings aren't enough to sway critics of the tax hike requests; they say it's a bad time to be asking for more tax dollars from cash-strapped voters.
"The rates are low, which is very true, but the point still remains that, economically, times are bad, and I don't care how they cut it, it's still increasing taxes," said Carol Schubert, president of the Barrington Enlightened Taxpayers Association.
Still, backers of the tax increases are jumping all over the news that costs will be less and payback will come sooner. That might sway the undecided voters.
"We are definitely trying to spread the word that this is going to be better for them," said Christy Sefcik, assistant superintendent at Grant High School District 124 in Fox Lake. "We were already in an accelerated debt schedule, but we're definitely going to pay less now."
Grant officials are asking voters for approval to spend $38.5 million to renovate the high school.
However, there are a few taxing bodies that might choose to pass the savings directly onto taxpayers immediately by reducing the requested tax rate slightly.
Naperville Unit District 203 is asking voters for permission to borrow $43 million, mainly to renovate Naperville Central High School.
Dave Zager, the district's assistant superintendent for finance, said it's likely district officials would trim the tax rate.
"The lower interest rates are not as impactful on long-term borrowing," he said. "We'd probably choose to have the taxpayer pay less."
But apparently not every taxing body is benefiting from the Federal Reserve's recent intervention.
"It will have minimal effect," said Tom Runty, assistant superintendent for business at Kaneland Unit District 302. "We'll actually be able to shave off a little bit, but not much."
Runty chalked that up to the district's lower bond rating, which probably won't allow it to access lower rates unless it purchases extra insurance, which would then likely negate most of the savings, he said.
Sweetening the pot
A look at some of Tuesday's ballot questions that may be affected by interest rate cuts.
Itasca: $1.75 million for library repairs
Addison Park District: $14 million for aquatics center
Barrington Park District: $12 million for recreational facility
Fox Valley Park District: $44.8 million for land and other initiatives
Lombard Park District: $5.9 million for aquatic center
St. Charles Park District: $25 million for land and maintenance projects
Wauconda Park District: $12 million for aquatic park
Big Hollow Elementary District 38: $10 million for district operations
Glen Ellyn Elementary District 89: $24.8 million for technology and building improvements
Grant High School District 124: $38.5 million to renovate high school
Wheaton Warrenville Unit District 200: $58 million toward new middle school
Naperville Unit District 203: $43 million for school renovations
Kaneland Unit District 302: $65 million for new school