Mary N. Parker is superintendent of Delavan CUSD 703 in Tazewell County, which has been under the Property Tax Extension Limitation Law since March 1998.
Since its beginnings in 1991, the Property Tax Extension Limitation Law (PTELL) in Illinois has been described as an evil law that will financially bankrupt some school districts and local agencies. But my doctoral investigation, The Present and Future Impact of Tax Caps on Small, Rural Illinois School Districts, shows a contradictory picture.
Analysis of the quantitative data … real numbers that can be measured … determined no statistically significant difference in any of the financial conditions or quality of the delivery of instruction between districts subject to PTELL and similar districts not subject to the law.
However, the investigation using qualitative methods … asking people what they think and believe … revealed a large negative impact from PTELL on school districts under its limitations.
Fusing these seemingly contradictory results provides a clearer picture of the true impact of PTELL than either separate investigation can provide.
Who is affected?
School districts in Illinois are subject to the law's limitations if the majority of its equalized assessed valuation (EAV) is located in a PTELL county or counties. In order to be subject to PTELL, voters would have had to pass a referendum put on the ballot by their county board, except in Cook County and its surrounding "collar counties" where PTELL was established by the legislature.
Currently 33 of the 102 counties in Illinois, plus Cook, DuPage, Kane, Lake, McHenry and Will counties, are subject to PTELL. The law prevents districts from raising local tax rates more than 5 percent or the level of the Consumer Price Index (whichever is less) without referendum.
Consequently, throughout the state, nearby pairs of similar districts have opposite PTELL status and different abilities to raise revenue through local property taxes.
The findings
The quantitative study investigated the impact of PTELL by comparing two sets of small, rural unit school districts. The first set was the total population of 39 unit school districts in Illinois with student populations of less than 1,000 that were subject to PTELL limitations (outside Cook County and the surrounding five collar counties). The second set was a group of purposively matched districts that were similar in student populations and close in geographic location.
By statistically comparing data obtained from the Illinois State Board of Education, the two sets were investigated for differences in financial condition and the quality of the delivery of instruction.
The categories used to compare differences were:
The analysis compared differences between the two sets of districts. In all of the above categories, no statistically significant differences were found.
Qualitative data were obtained by sending open-ended questionnaires to superintendents in PTELL districts. For this investigation, one district per PTELL county was chosen randomly to receive the mailing.
The questionnaire asked superintendents what the impact of PTELL was on:
Analysis of the questionnaire data found that a vast majority of the superintendents felt PTELL had a very negative effect on their districts. Losses of revenue, depletion of fund balances, instructional cutbacks, reduced offerings, reduced salary increases, and lost opportunities to improve education were all cited as impacts of the future and present loss of revenue due to PTELL.
Two similar doctoral studies at Northern Illinois University that concentrated on PTELL school districts in the Chicago area, one in 2001 by Danny Hylbert and the other by J.A. Rudow in 2003, showed similar qualitative results as well as some negative impact from PTELL on district finances in quantitative research.
Three possible explanations exist for this difference in results between the qualitative and quantitative results.
First, the impact in the qualitative data may not yet have fully appeared because districts were allowed to raise taxes the year before PTELL went into effect. The state also has offset some losses with state aid. In addition, districts have postponed elective expenditures such as building maintenance, made cuts in areas not included in the study and become more conservative with decision-making.
Second, superintendents in non-PTELL counties, who were not sent questionnaires, might have similar financial complaints for reasons other than PTELL regarding district finances.
Third, cutbacks made in PTELL districts might have been numerous, small cuts that would not be evident in quantitative data. The impact also would not reflect in quantitative data any lost opportunities for improvement that were not taken because the district was under PTELL limitations.
So, the answer to the question of whether PTELL will eventually bankrupt some school districts is still unclear.
If inflation, as measured by the Consumer Price Index, ever greatly exceeds the 5 percent maximum in PTELL, it is hard to imagine school districts surviving without a referendum or state intervention. The same dire prediction could be true if rumors that the CPI could be "1" or even less for this year, severely limiting the districts' ability to levy additional funds.
In the meantime, the strange juxtaposition of school districts subject to PTELL and not subject to PTELL will certainly give researchers more time to continue to study the impact.
Editor's note
Superintendent Parker said she or any of her board members would be available to answer questions about how PTELL affects their district. Contact them at 309/244-8283 or through her e-mail at parkerm@delavanschools.com.
References
Danny Hylbert, The effects of the property tax extension limitation law upon revenue growth, bonded debt, and school business leader perceptions within selected Illinois school districts, unpublished doctoral dissertation, Northern Illinois University, DeKalb, Illinois, 2001
Mary N. Parker, The present and future impact of tax caps on small, rural Illinois school districts, unpublished doctoral dissertation, Western Illinois University, Macomb, Illinois, 2009
J.A. Rudow, Financial impact of property tax caps on school districts and the effect on the tax rates in suburban Cook and collar counties' public school districts in Illinois, unpublished doctoral dissertation, Northern Illinois University, DeKalb, Illinois, 2003