GENOA CITY — Closing the Tax Increment District (TID) at the end of the year will significantly reduce the village’s property tax rate, but what about Brookwood School District’s rate?
In an Oct. 2 phone interview, Bill Lehner, school district administrator, explained why there’s no easy answer to that question right now.
That’s because the district is still collecting financial data.
“There are a lot of unknowns for us right now,” he said.
Lehner said he expects that the school board will be presented with all the necessary figures by Monday, Oct. 21, at 7 p.m., in time to approve next year’s budget.
The TID has been cited by Genoa City officials past and present as one reason why the village’s tax rate is so high. Last year, it was $10.18 per $1,000 of assessed value.
Established in 1997, the TID was used to fund water, sewer and road projects.
To fund those projects, the village borrowed money.
To repay the borrowed money, the village used tax revenue from properties within the TID.
The TID included about 44 percent of taxable village property.
With TID tax dollars going toward that loan, what about Brookwood and other school districts?
Lehner said Brookwood receives state aid to offset the amount of tax revenue it would have received without a TID in place. When the TID closes, Brookwood will no longer receive that aid.
Last year, the district received more than $4.57 million in state equalization aid.
Is that $4.57 million all because of the TID?
In an email Monday, Brookwood Business Manager Mary DeYoung said equalization aid “is based on several factors including membership counts, shared costs, net cost of the general and debt service funds, property valuation” and other factors.
“In the (state Department of Public Instruction) equalization aid formula, the lower the property valuation, the more you would get in equalization or general state aid,” DeYoung said. “So, Genoa City received more state aid during the years of the TID as they were not able to get tax money from that property. When the TID ends, the value of the property in the TID is now added to property valuation.”
So, in theory, once the TID closes, it should be a push for Brookwood.
Although it wouldn’t receive the state aid it did in the past to make up for lost tax revenue, those property tax funds would go to the district next year.
That’s still unknown, Lehner said.
However, last year, according to numbers submitted by DeYoung, the district’s equalized value dropped from $310.8 million to $261.4 million.
She said the value for next year is expected to increase to more than $320 million.
“My best guess is that (state aid) will be up this year due to the significant reduction in equalized value of the district last year, and will then drop next year due to the TID closing,” he stated in an email Monday.
What about next year?
“The tax rate itself could go down because a lot more properties will become part of the (tax) base,” Lehner said Oct. 2. “It will be interesting to see how it comes out.”
He said he expects state aid numbers to be finalized next week.
There is some good news.
On Sept. 24, Phil Cosson, of Ehlers, presented a report on the closure to Genoa City Village Board and Village Hall Committee members. The village’s TID collected about $2 million more than it owed.
On Oct. 2, Lehner said Brookwood should receive some of that extra money.
“I’ve heard it’s going to be $600,000 plus,” he said. “It was much smaller a few months ago, but now, as they’re closing (the TID), it sounds like it’s going to be in that range.”
This month, Lehner will be compiling a list for the school board, suggesting different ways to designate that money.
“Things like this might provide us with an opportunity to fund certain projects down the road,” he said.
Some projects Lehner may suggest include technology upgrades and funding a roof repair at the middle school.
“The middle school, we’re working into that 14-, 15-year range,” he said. “With a shingled roof, typically, you’re looking at replacement every 20 years.”