County School Facilities Sales Tax

On Nov. 5, residents of Effingham County, Illinois will vote on a proposed one-cent county school facilities sales tax. The sales tax is for one cent on every dollar spent on qualifying retail purchases. If approved by voters, the proposed sales tax would provide additional revenue to all schools in Effingham County. This proposal will give voters a unique chance to improve our schools. 
 
 

Because we live at the intersection of two major interstate highways, much of the revenue collected from this sales tax comes from people who shop, but don’t live, in our community. Over half of the revenue provided by the CSFT comes from these nonresidents. 

For example, if an over-the-road truck stops to fill up with 280 gallons of diesel, at today’s prices that’s more than $10.00 for schools in our county. It’s fair that the trucks, cars and individuals who are not residents and use our streets and facilities should help pay for essential services. And for our own residents, this sales tax is not collected on essential items such as groceries, prescription and over-the-counter medications, vehicles and farm equipment.

It provides a source of money for keeping our school facilities up-to-date and in good working condition. And we can do so without relying on property taxes. That’s why more than half the counties in Illinois have passed the County Facilities Sales Tax.
 

We know that when we provide good schools for our community, we strengthen property values and our overall standard of living. Every resident benefits from good schools.  Property values — the single most important investment for many of us — will be protected and remain stable. It is well-documented that schools are the most important factor impacting property values.

To compete in higher education or the workplace, our kids must have a good education. And that means we must have up-to-date schools. That’s what this proposal provides. And it does so without relying on property taxes. 
We’ve always ended up doing the right thing for our kids in providing quality public education. This proposal is a long term solution to provide the type of schools our kids need and deserve in order to compete in today's economy.

Over half the counties in Illinois (57/102) have passed this County School Facilities Sales Tax including neighboring counties like Cumberland, Coles, Fayette, Jasper, Shelby, Richland and Marion. (See map  CSFT Map 9.13.24.png) Examples of close-by schools built or renovated with the CSFT can be found in Richland County, Mt. Zion, Mahomet-Seymour, Champaign and many other school districts. That means tens of thousands are benefiting from property tax relief. And that means tens of thousands of kids are going to school in improved facilities. It is good for kids. It is good for taxpayers. It is good for communities. It is a great investment in our future.

 

 

The County School Facilities Sales Tax, modeled after a very successful program in the state of Iowa, was created in 2007 as a way to provide revenue to support improvements in school facilities and shift away from relying on property taxes for local school district funding in Illinois. It is a sales tax of up to one percent on qualifying retail purchases. Importantly among the items not taxed are groceries, prescriptions and over-the-counter medications.

 

All across Illinois, there has been a call for property tax relief. The CSFT was passed in response to that call. Traditionally school building improvements have been funded through property taxes. By passing the CSFT, much of the burden for funding public school district facility improvements can be shifted to the sales tax — and a sales tax that is very equitable and fair in its design.

 

To be implemented, CSFT must be passed by a countywide vote. School boards, representing a majority of all resident student enrollment, pass resolutions to place the proposal on the ballot. All Effingham County School District Board of Educations have passed a resolution to place the proposal on the November 2024 ballot.

 

If that ballot proposal is approved by a majority of voters, the one-cent sales tax goes into existence. The revenue from the tax is apportioned by student count within the county. For example, if a district has 10% of the students in the county, it gets 10% of the revenue.  Every school district in the county gets to decide for themselves how their CSFT funds will be spent based on their specific needs.

 

Illinois law is very clear about how the CSFT revenue can be used. Revenue from this one percent sales tax can only be used for improving school facilities, retiring new or current building bonds, or for school resource officers and mental health professionals. It cannot be used for general school salaries, instructional materials, or other operating costs.

 

1. A new K-2 Building (~$36.6 M)

2. Move Little Hearts Early Childhood Center and East Side Preschool into South Side School (~$3.4 M)

3. Central Grade School Library (~$0.4 M)

4. Central Grade School Gymnasium wood floor and bleachers (~$3.4 M)

5. Central Grade School North Parking Lot redesign (~$0.48 M)

6. Effingham High School Parking Lot replacement (~$4 M)

 

 

Alternate Revenue Bonds - 2025 - $48 M

20 year pay back term - Uses 93% of sales tax (~$3.75 M annually)

28 year pay back term - Uses 80% of sales tax (~$3.20 M annually)

All information is tentative as the numbers are estimates in the projecting process
 

What is taxed and not taxed?  Isn’t this a regressive tax?             

Items normally subject to sales tax are included in the CSFT with some major exceptions. Very importantly, groceries and both prescription and over-the-counter drugs are not taxed. That is a large part of why so many regard this tax as fair and not regressive. Other items NOT TAXED include:

 

  Cars, trucks, ATV’s, boats and RV’s
  Mobile homes
  Unprepared foods (at the grocery store, a loaf of bread and deli meat is not taxed, a prepared sandwich at the         grocery deli is taxed)
  Drugs (including over-the-counter and vitamins)
  Farm equipment and parts
  Farm inputs
  Services (accounting, legal, etc.)
  Anything purchased at the wholesale level
 

If it is currently not taxed by sales tax, it is generally not taxed by CSFT. Online sales are taxed (that was effective beginning on January 1, 2021 excepting those items mentioned above).

 

Items below are examples of what CSFT would cost on some purchases:

 

  McDonald’s meal $6 = 6¢
  TV at Walmart $200 = $2
  Ground beef at Walmart = not taxed
  Gasoline $18 = 18¢
  Haircut = not taxed
  Amazon $100 = $1
  $10,000 of annual purchases (excluding food and medicine) at Walmart = $100

 

The CSFT has been on the ballot three times in Effingham County. The most recent election was April 2019 when the proposal received 45.4% support in a very low turnout election. In the meantime, lots of counties across Illinois have passed the proposal.

 

Because Effingham is at the crossroads of two major interstate highways, it receives higher per capita sales tax revenue than does the vast majority of counties in Illinois. Much of our sales tax revenue is imported from those who travel through, but don’t live in, our county. These “visitors” can help pay for our schools should the CSFT pass. Current projections are that school districts will annually receive about $1,700 dollars for every enrolled student. For many counties across Illinois, the comparable amount is less than $1000 and in some cases under $500. Based on current enrollment, Effingham CUSD 40 would receive approximately $4 million annually from CSFT.

 

The ballot wording is confusing, so it is important that residents have a high level of familiarity with it and understand what it means. The wording is:

 

“Shall a retailer’s occupation tax and a service occupation tax (commonly referred to as a ‘sale tax’) be imposed in Effingham County at a rate of 1% to be used exclusively for school facility purposes, school resource officers, and mental health professionals.”

 

This is a lot of words to describe what most people call a one percent (or one-cent) sales tax.

  

The CSFT is on the Nov. 5, 2024 ballot. That is the same date as the presidential election. Turnout should be high. We think all voters should weigh-in on this important decision.