Post by EagleDad on Apr 17, 2010 7:17:43 GMT -6
www.dailyherald.com/story/?id=373496
Dist. 204 looks to challenge payroll tax rules in tiff with state
By Justin Kmitch | Daily Herald Staff
Desperate times call for creative, if not necessarily desperate, measures.
And Indian Prairie Unit District 204 school officials say waiting for $13 million in late payments from the state has made them desperate enough to even challenge Illinois tax laws.
Assistant Superintendent for Finance Dave Holm said the state currently is close to $13 million behind in payments to the district, which received its last significant check from the state around January.
That delay has contributed to District 204's severe financial pinch, which includes a projected $21.4 million budget deficit and plans to release 145 teachers along with fee increases and proposed cuts in some programs.
"Of course they're still saying we will receive those monies, just late, versus the significant budget cuts that we're looking at as we go into next year," Holm said.
Board President Curt Bradshaw this week suggested a possible way to prod the state into paying some of the money it owes the school system - he wants the district to withhold the monthly payroll taxes it sends to Springfield.
"I propose we stop sending $500,000 a month to a deadbeat entity that owes us $13 million," Bradshaw said. "A law requiring school districts to pay a state that isn't living up to its own obligations would be the peak of hypocrisy and double standards. However, I suspect we will find such a law in place."
Susan Hofer, state department of revenue spokeswoman, said District 204 attorneys will indeed find such a law, and it's called the state constitution.
"The school district collects that (payroll) money on behalf of an employee and forwards it on the employee's behalf to pay that employee's portion of the personal income tax," Hofer said. "So those taxes are not (the district's) money.
"If any employer withholds income taxes from salaries, the employer is constitutionally obligated to pay that money to the state."
If school board members aren't happy with the tax-collection system, Hofer welcomed them to "go ahead and change the way it's done."
Bradshaw already has accepted the challenge.
He suggested the district, which covers portions of Naperville, Aurora, Plainfield and Bolingbrook, work with its state legislators "to pass a deadbeat amendment to the law."
He envisions such an amendment would allow school districts to deduct payroll taxes owed to the state from the state's unpaid obligations.
Naperville State Rep. Darlene Senger, a Republican, said Thursday she has already begun making calls to see what can be done.
"I'm ready to do what I can to help them because I think it's a neat concept," Senger said. "I certainly understand where they're coming from because it doesn't make sense for them to keep paying us when we owe them."
Bradshaw's fellow board members also said they like his initiative.
"This is some very outside of the box thinking and it bears consideration by our attorneys," Mark Metzger said. "I don't know if it's allowable but it's very interesting and could leave the state with a very interesting problem on its hands. Maybe that would get their attention."
Dist. 204 looks to challenge payroll tax rules in tiff with state
By Justin Kmitch | Daily Herald Staff
Desperate times call for creative, if not necessarily desperate, measures.
And Indian Prairie Unit District 204 school officials say waiting for $13 million in late payments from the state has made them desperate enough to even challenge Illinois tax laws.
Assistant Superintendent for Finance Dave Holm said the state currently is close to $13 million behind in payments to the district, which received its last significant check from the state around January.
That delay has contributed to District 204's severe financial pinch, which includes a projected $21.4 million budget deficit and plans to release 145 teachers along with fee increases and proposed cuts in some programs.
"Of course they're still saying we will receive those monies, just late, versus the significant budget cuts that we're looking at as we go into next year," Holm said.
Board President Curt Bradshaw this week suggested a possible way to prod the state into paying some of the money it owes the school system - he wants the district to withhold the monthly payroll taxes it sends to Springfield.
"I propose we stop sending $500,000 a month to a deadbeat entity that owes us $13 million," Bradshaw said. "A law requiring school districts to pay a state that isn't living up to its own obligations would be the peak of hypocrisy and double standards. However, I suspect we will find such a law in place."
Susan Hofer, state department of revenue spokeswoman, said District 204 attorneys will indeed find such a law, and it's called the state constitution.
"The school district collects that (payroll) money on behalf of an employee and forwards it on the employee's behalf to pay that employee's portion of the personal income tax," Hofer said. "So those taxes are not (the district's) money.
"If any employer withholds income taxes from salaries, the employer is constitutionally obligated to pay that money to the state."
If school board members aren't happy with the tax-collection system, Hofer welcomed them to "go ahead and change the way it's done."
Bradshaw already has accepted the challenge.
He suggested the district, which covers portions of Naperville, Aurora, Plainfield and Bolingbrook, work with its state legislators "to pass a deadbeat amendment to the law."
He envisions such an amendment would allow school districts to deduct payroll taxes owed to the state from the state's unpaid obligations.
Naperville State Rep. Darlene Senger, a Republican, said Thursday she has already begun making calls to see what can be done.
"I'm ready to do what I can to help them because I think it's a neat concept," Senger said. "I certainly understand where they're coming from because it doesn't make sense for them to keep paying us when we owe them."
Bradshaw's fellow board members also said they like his initiative.
"This is some very outside of the box thinking and it bears consideration by our attorneys," Mark Metzger said. "I don't know if it's allowable but it's very interesting and could leave the state with a very interesting problem on its hands. Maybe that would get their attention."
) It sure could get a hell of a lot of free, and good publicity. Also it would give the local taxpayers an option to show their support of, a way of saying that de-funding education to force a tax increase is unacceptable.
