.

D86's Flat Levy Shows 'Fiscal Responsibility': Letter

A letter to the editor from Clarendon Hills resident Stephen Paul Weiland supports District 86's to-be-finalized flat levy.

Patch file graphic
Patch file graphic

The following letter was submitted to Patch by Stephen Paul Weiland of Clarendon Hills:

Over the past few weeks, I have read and listened to the arguments and unjustified personal attacks from those against the District 86 flat tax levy.  In this letter, I have taken the liberty to summarize (imperfectly, I’m sure) their arguments into six main points, which I then address in turn. In my opinion, their arguments use the worn tactics of fear and misinformation—typical among the “tax-and-spend” crowd—and purposely avoid engaging in civil debate. It is quick and easy to appeal to the masses with fear and emotion, seeking to tarnish the good name of this district’s citizens with conservative views on spending and education. To engage in fact-based, analytical argument is more time consuming and lengthy, so I apologize in advance for this lengthy note.

Before diving in, I think it worthwhile to establish a high-level, baseline understanding of D86’s financial condition, as I have come to understand it over the last few days while forming my opinions regarding this issue.  I implore you to please consider/explore the following, before forming yours as well:

  • D86’s most recent treasurer’s report, which I found here. The balance sheet (p. 3) and time analysis of reserve balance (p. 17) are particularly illuminating.  We have $64.6 million in reserves as at Oct. 31, and at no point over the last four years have we dipped below approximately $25 million in reserves (reflecting the tax June/September collection vs. more steady expense cycle). The reserve balance is earning something like a paltry 0.25 percent. Page 17 also illustrates that for each respective month of this fiscal year, D86 has set a monthly all-time high in its reserve versus each corresponding month over the last five fiscal years.
  • In addition, there is currently about $22 million of bonds at 3.5 percent interest rate (not reported in the interim, but can be found in the annual report). Important observation: we are paying banks 3.5 percent interest on $22 million while we are only earning 0.25 percent on a substantial cash position. Unfortunately, the bonds aren’t callable.
  • According to district consultant PMA Financial Network, D86 ran an approximate $1.9 million surplus in FY13 (June 30), a net increase to reserves. A $1.4 million surplus is projected in the current FY14, and in FY15, with the flat tax levy, D86 still estimates generating over a $1.3 million surplus.
  • D86 has an additional approximate borrowing capacity of at least $30 million without a referendum in addition to using short-term tax anticipation warrants.  With referendum, I understand that the district can borrow at multiples of tax revenue.

The above takeaway is that D86 is in excellent financial position today to pay for anything it needs, has ample current liquidity, ready access to additional capital if needed, and at no point is expected to have less than TWENTY TWO MILLION dollars, according to PMA projections, through the cycle—all without additional tax levy.

OK, thanks for bearing with me. Now that we have that out of the way, let’s dive into fevered argument (the fun part). As mentioned previously, I will summarize and then respond to the opposition’s six main points regarding a flat levy:

1. A flat levy weakens the balance, leaving D86 financially vulnerable and unprepared for unforeseen events such as potential aid decline, pension reform, or the sky falling.

D86, as evidenced above, is in an enviable position of extreme financial strength.  At its lowest point in the year, D86 will still have at least $22 million in readily available, cash-on-hand reserves to fund any unforeseen needs or improvement opportunities. In addition, it can borrow an additional $30 million before access to many more millions through referendum. Why should taxpayers use a municipal school district as a savings vehicle (earning only 0.25 percent) when it is already on sound footing with ready access to capital? If we don’t need the money now and can get more in the unlikely event that it is needed, then why take it now? Government entities, condo boards, and even corporate bank accounts are not savings vehicles for citizens or investors. Excess cash is best held by the individual, whether the individual is the tax payer or the stock holder. This is sound finance theory, and tax-and-spenders like to make folks think that there should be a different set of rules—it’s a smoke screen.

For example, lets imagine (and it does take some imagination) that in a few years’ time D86 requires extraordinary funding from the tax base. Would you have rather had D86 sit on your money for few years earing only 0.25 percent or would you rather have directed its use—invested, spent, whatever? We aren’t going anywhere, so why accelerate payment for future unknowns?

2. A sub CPI tax levy increase necessitates sacrifice (i.e. cuts).

Can I ask why? If I had savings of $1,000 at the beginning of the year and earned $50 over its course, can I not still spend $60 without sacrifice? But wait, we aren’t even in that scenario. Remember, the budget forecasts over a $1 million surplus with a flat levy. To make it more interesting, let’s assume (though unlikely) that the forecast is materially incorrect and instead of a $1 million surplus, we run a $1 million deficit. Guess what? We still have a $22 million cash cushion at the lowest point in the cycle. In addition, specifically what sacrifices or cuts is the opposition concerned about? My understanding is that proponents of the flat levy believe none to be required. Are our elected volunteers and neighbors so evil, that they can’t be trusted?

In addition, why do people think that CPI is some sort of magical number that actually represents every reality? Doesn’t basing an argument around CPI presuppose that the CPI is an actual reflection of the increased cost of D86 conducting its business? (Let’s also not forget the surpluses and enormous reserve.) This isn’t a fact, and to the contrary, many people think CPI is not the best measure, and it certainly is not a one-size-fits-all measure. CPI is supposed to represent the average change over time in the prices paid by consumers for a market basket of goods and services. Is D86 an individual consumer of retail goods and services, or is it a sophisticated, large organization with purchasing and negotiating power? In other words, it is not a price-taking human consumer.

3. No one else is doing it, so why should we?

The frequency and strength with which this argument is used is matched only by its emptiness. I prefer to call this the lemming argument. If my son told me that “John’s parents let him watch R-rated movies, so you should let me too,” wouldn’t the appropriate (and very apt) response be, “If John jumped off a cliff, should you as well?” We are jumping off a cliff, a fiscal cliff. And yes, everyone is doing it, but that doesn’t mean it’s the correct answer. It takes bravery and conviction to stand apart from the crowd. Who knew, the world was round after all, I guess that guy wasn’t so crazy!

4. A flat levy is an irresponsible decision that threatens the value of our homes.

I agree that the value of our homes is extremely important. For many people, the home represents the family’s most significant investment. However, if there is one thing that impacts the value of our homes (whether residents have children in D86 or not, our officials represent them too), it’s increased taxes. Increased taxes have a multiplicative negative impact on home values. All else being equal, higher-taxed districts have lower property values. The present value of increased taxes is negatively priced into the home value. This is fact. Trust me, people will still want to move to Hinsdale with a flat levy, and I would argue, even more so.

It still remains to be shown how not taking unneeded money when D86 is already adequately financed and with ample reserves will cause the quality of D86 instruction and student outcomes to suffer. There is no iron-clad correlation between increasing spending and increasing student outcomes. In fact, the exact opposite trend is well documented over the last two decades.

I know what we can do to increase our property value—we can build 10 new fire and police stations in D86. Maybe even one on every block? Sure, it will cost a little money, but we will be safer and many lives will be saved. Our property values will skyrocket! If we don’t do it, think of all the scary bad things that might happen.  Sound familiar? The unfortunate reality in a world and economy of limited resources is that every public and private good or service—whether your currency is a U.S. dollar or a bag of rice—has a value, cost, tradeoff, etc. Yes, extra fire stations save lives, but there is a very real financial and opportunity cost. We are talking about education here, but every day governments, insurance companies, car manufacturers, etc., put actual dollar values on actual human life. We have to put prices and measurements around education, like everything else. We don’t have a money tree or bottomless well. More, more, more has to stop. This is responsible decision making. 

5. A flat levy is unfair to the middle class, because it depends upon public schools, while the wealthy have options.

First, let’s return to planet earth—D86 is not middle class. (I strongly dislike that terminology, by the way, as I have a goodly number of the classiest friends and family of humble financial means). I note 2009 data indicating that D86 median household income is ranked 54th out of 871 Illinois school districts. Numbers 55 through 871 think us to be wealthy, and we are wealthy (we being the statistical median that is). We're wealthy in many ways other than income, as well. Rich people who want to be richer, or who are trying to keep up with the Joneses, think of themselves as middle class here. We have options and we choose D86 because of its excellence. One who always wants more never feels full.

This argument also makes a subtle presumption that the wealthy have options because they can send their children to private school, which presumably costs more (because it spends more) and therefore must be higher quality. The argument again sneaks in the idea that spending more always results in better education. Well, perhaps it results in a fancier, navy blazer education, but better? The jury is definitely still out on this. A Range Rover certainly costs more than a Toyota Land Cruiser, but most explorers trust the Toyota to drive them into the jungle.

In addition, many studies also show that public schools spend more per pupil, not less, than private schools. For example, a CATO study analyzed public versus private school spending for the five largest U.S. metro areas and D.C.  It found that in the areas studied, public schools are spending 93 percent more than the estimated median private school. I also noted a Wall Street Journal analysis that analyzed public school spending and outcomes for 2008 versus 1975. While funding more than doubled, the WSJ found that just about every measure of education outcomes remained stagnant since 1975, NAEP scores remained flat since the mid 1970s, and high school graduation rates barely moved. While I’m confident that anyone can find a statistic or report to support an opinion (and I’m sure tax-and-spenders start rolling their eyes when they hear CATO and WSJ), the point that I’m trying to make is that at a minimum, the jury is still out. The idea that more spending equals better outcomes is not a fact. Why can’t we have real debate here versus rhetoric and scare tactics?

6. Implies a lack of community support and hurts our standing versus other districts (i.e. New Trier).

If my daughters asks for a raise in their allowance, which I don’t provide, do I not still love and support them just as much as I did before (especially if they have a generous savings account)? If employees are denied raises that are not supported by the overall economic environment, the company’s earnings, or improved performance outcomes, does it mean that the employer doesn’t support and value them? Quite to the contrary, this level of debate and personal investment indicates a strong level of community support for D86 and its excellent educators. Apathy is indicative of a lack of support. My wife tells me I’m fat because she loves me (please don’t tell her I recognize that).

And again, our courageous board members are not trying to cut back on D86.  What I hear is that we have enough money already and we just don’t need any more to achieve the mission. See again the $1.9 million surplus last year, $1.4 million surplus this year, and exceptionally strong reserves, liquidity, and access to additional capital.

Also, who cares about New Trier? If you want your children to go to New Trier, then move to the North Shore—there are plenty of neighborhoods and towns to choose from that feed into it. I grew up on the North Shore, but I chose to move here with my family because it wasn’t for us. I don’t want D86 to be like New Trier. I want it to be different and better on our terms, the way that we define it. We should care about being the best we can be in our individual ways, and not worry about what the Joneses are doing. Sure, comparisons are useful management tools, but why the fixation? Again, no one is talking about cuts here, simply not taking money that isn’t needed. It’s a HUGE difference.

I ask, what is the end game for those in opposition to fiscal responsibility and in favor of “never leaving anything on the table?” Is it to always take as much as one can, to increase taxes anytime one has the opportunity to exclusion of all else? Is it a wise practice to always take as much as one can here or in any other aspect of life? When is enough, enough? Fiscal responsibility to the taxpayer can co-exist with educational excellence.

Check out other letters to the editor on the District 86 flat levy:

J. Geoff Rove December 10, 2013 at 08:14 PM
An excellent analysis which should be made of all forms of suburban local goverments. And the Tollway too ! Well Done !
Linda Burke December 11, 2013 at 10:24 AM
We can assume that this piece was authored by the same Mr. Weiland who believes our schools would be just fine if students read Socrates [sic] by candlelight, did math with a stick in the sand, and studied science in labs not updated for the past twenty years. If your approach to education is "Who cares about Trier" or who wants to be ranked with the best of the best, then the flat levy is for you. If you value our long-standing membership in the Chicago-area top tier (soon to be terminated if the flat levy takes effect), then the flat levy is a tragic mistake that under the rules of the tax cap can never be repaired. Mr. Weiland's letter has some dubious claims, to put it mildly. He is factually wrong, of course, about comparable private schools costing less than our actually very modest per pupil expenditures of under $17,000 a year (substantially lower than New Trier and other schools we compete with--or used to compete with--academically.) What top-tier private high school charges that little per student? Find me an example. You might want to check out the University of Chicago Lab School, where Mayor-for-the-one-percent Rahm Emanuel sends his own kids, while echoing the anti-public school agenda of Mr. Weiland's posting. Of course the war on public education is a war on the middle class, who depend on the public schools. And yes, District 86 is predominantly a middle class community, although the district is doing a stellar job of educating a growing cohort of lower income students. Another dubious claim in the letter is that programs will sustain no damage when revenue fails to keep up with inflation. Maybe nothing important to Mr. Weiland will suffer, as his concern for academics is limited (see above), but Mr. Corcoran and his group don't even pretend that nothing will be cut under their scenario. You can check out the boastful propaganda distributed by their single-issue advocacy group, Citizens for Clarendon Hills. They are promising "cuts in excess personnel," read fewer teachers. It is true that the board majority's concern for protecting the taxpayer dollar is selective at best. They will surely hit us up for Dianne Barrett's legal bills, for unspecified "capital improvements" (read new sports-related facilities for Hinsdale Central--dear to the hearts of their backroom cronies), and FIVE, yes, FIVE highly compensated new administrators, plus a headhunter engaged to find them. They have absolutely no plan to prioritize academic quality amid the general carnage or for equitable distribution of the inevitable sacrifices. Mr. Corcoran has given plenty of hints that he expects the budgetary ax to fall on our teachers--the heart and soul of a school. In Corcoran's philosophy of "market," we can attract the best qualified faculty by paying them less than surrounding districts and treating them with scorn. I may be only a dumb English teacher, but I always thought market forces would have exactly the opposite effect. To stand with Mr. Corcoran and his group is a public expression of hostility and contempt for our teachers. At least Mr. Weiland's letter deserves credit for its lack of hypocrisy--if you care about top-quality schools, he's telling you not to live here or move here if his group has its way. This is the true agenda of the "Friends" slate now on the board--if only they had campaigned last spring under their true colors! We would not be in this predicament now.
Linda Burke December 12, 2013 at 06:01 AM
It is important to note that the flat levy would also put us behind every other high school or unit (K-12) district right here in the western suburbs--"no one else is doing it" means literally no one. The example of Downers Grove High School District 99 is indicative--they have chose a 2.1% levy to be prepared for pension reform and other foreseeable eventualities. Extreme ideology (such as Mr. Corcoran's) is a presence in Downers Grove, but no one is seriously attempting to inflict it on their high schools. They are willing to see the experiment happen--somewhere else. Even to people interested in the flat levy, it should be sobering that truly no one else is going down this radical path. We would be starting a race to the bottom with no evidence whatsoever that anyone else will follow. Middle class homeowners can't afford to pretend that school rankings don't exist or don't matter.
Stephen Weiland December 12, 2013 at 11:04 AM
The one and same, yes. While I was unaware that Ms. Burke was an English teacher, I think that we can now be fairly certain that the works of Ayn Rand, George Orwell, and Aldous Huxley do not grace her recommended reading lists. If Ms. Burke thinks Mr. Emanuel (the former Obama Chief of Staff) a “Mayor-for-the-one-percent,” then Ms. Burke places her politics somewhere among Marx, Mussolini, and Chavez. But remember, I’m the radical. While it is convenient and typical for tax-and-spenders to think of conservatives such as myself as some sort of knuckle-dragging, red-necked-Neanderthal, anti-intellectual, sub-human life form that wishes longingly to live frozen in time on the set of “Leave it to Beaver,” our only real offense is to disagree with the “one true path.” In fact, I am a well-educated modern man who places enormous value upon education and intellectual pursuit…and I’m even an environmentalist (but I’m still hated by the left, they are so open-minded you know). Ms. Burke is far from “dumb,” as she mentions in obvious jest. I actually find her comments rather witty and well written, and she may very well be an excellent English teacher. However, the arguments are the same old tired, unsubstantiated, fear-based hysterics we have all seen many times before. And she is not “dumb,” because she tactically argues in this repetitive way in order to avoid the facts – a play right out of the Alinsky manual. Luckily, D86 citizens, by-and-large, are not attendees at an Obama press event. We question and seek evidentiary support for our analysis, and repeating something over and over again doesn’t make it true. I ask of Ms. Burke, please take specific issue with what I have written, based on new thought and research. I spent many hours researching and preparing my thoughts, you simply copy old posts and repeat stale ideas. Here are some questions that will make it easy for linear response. How do you specifically disagree, by referencing its financial statements, that D86 is in a position of financial strength and can afford anything it needs given its huge surplus and borrowing ability? What specific amount of surplus is sufficient for D86 to support a flat levy? Is there any set of circumstances in which you would ever support a flat levy for any local government body, please elaborate? If D86 is projected to have a $1.4mm surplus with the flat levy (to be very clear, that means that with the flat levy, its revenue will still exceed its expenses by $1.4mm), than what specifically is getting cut or not funded by referencing the budget or other D86 documents versus spiteful board member attack? Given that D86 has access to significant liquid reserves and borrowing capacity, how does not taking unneeded money weaken its financial standing? Please draw the direct, logic-, and fact-based path between how a budget with a $1.4mm surplus leads to immediate academic Armageddon versus your New Trier love child.
Stephen Weiland December 12, 2013 at 11:05 AM
And by the way, if our expenditures are consistently less than New Trier and our “competitors,” yet we are ranked above them (e.g., US News & World Report 2013 ranking, and many others), didn’t you just prove my entire argument? And another by the way, in five minutes on the Internet, I found a plethora of top-ranked, private, Illinois High Schools with tuitions below $17k (e.g., Benet - $9,950; Fenwick - $12,950; Carmel - $9,950; Lycée Français de Chicago - $16,700; Wheaton Academy - $13,960; Marist - $8,600; and I could list over a dozen more), before even starting the argument that public education spending is grossly under-reported (the real cost is much greater than $17k/student). Please take five minutes to research a claim before presenting as fact, I beg you. What is your specific definition of middle class? Is being in the top 6% of income for all districts in Illinois “middle class” (54th out of 871)? Please let me know the specific median income distribution percentage range for your definition of “middle class.” Some other observations as well… In the same breath that Ms. Burke condemns the flat levy she rallies against potential capital improvement spending. So she wants more money, but not for improvements to facilities or for new science labs. The utterly transparent reason for this, and the basis for her entire argument, is that Ms. Burke wants as much money as she can to go to the teachers, such as herself, not to the students. I understand that D86 spends ~75% of its budget on teacher salaries. At $108k average per teacher (way above market – now that’s “highly compensated”), she wants more, more, more, more, more, more against a background of anemic economic conditions for the tax base. Another related question – please specifically direct me to statistical proof of the correlation between public schools spending more and improved student outcomes over the last 20 years. If the thrust of your arguments, as you would like us to believe, is that we need to pay more in order for improved student education, than just show us the statistical evidence linking spending to improved student outcomes? Ms. Burke, you can’t, it’s a unicorn.
Linda Burke December 12, 2013 at 01:53 PM
Please, Mr. Weiland, it is your ally Richard Skoda who voted "no" to science labs. I have always strongly supported them. My objection is to sports-related "capital improvements" for Hinsdale Central, derived from backroom promises made by Mr. Corcoran--all in the context of a war on teachers and academic course offerings. Amid the sacrifices he wants for our program, Mr. Corcoran is also calling for five highly paid new administrators, two expensive unnecessary audits, unspecified "capital improvements" as mentioned earlier, and always the bill for Dianne Barrett's frivolous revenge lawsuit. I do not say these "capital improvements" and administrators have no possible value, only that in a context of austerity affecting our teachers and course offerings, they must not be funded. As a person with loved ones who have attended private high school here and elsewhere, i can attest that the majority have tuition substantially greater than the per pupil expenditure in District 86--while also having the privilege of selecting their students, an obvious saving on cost relative to a public high school that owes a responsibility to all. District 86 is not actually superior to New Trier on most measures, but we are giving them a good run for their money, and at substantially lower cost. Our teacher salaries are competitive as they need to be, but by no means top of the line for the Chicago area. We are getting an excellent value in District 86, and we need to protect what we have--there is no financial excess to prune.
Stephen Weiland December 14, 2013 at 12:32 AM
Again, no new information, no cited analysis, no answers to my specific questions, and a personal attestation resting on vapor in light of incontrovertible proof. I'll make it even simpler: let's assume that all you say is correct, why cannot we afford it with our surplus and over-funded reserve; and if not, what levels of reserve and surplus would be required to support it? Is there any set of circumstances in which you would ever support a flat levy for any local government body?
Linda Burke December 14, 2013 at 08:09 AM
First, in answer to Mr. Weiland's question, he doesn't need to listen to me--he can refer to Dan Cronin, recently invited to speak to the single-issue anti-tax group calling itself Citizens for Clarendon Hills. District 86 board member Ed Corcoran is a prominent member of this group--an embarrassment to many real-life citizens of Clarendon Hills. Corcoran and his group have sent out boastful reports of the meeting, while neglecting to mention that Cronin specifically recommended AGAINST the zero levy for school districts. Their funding sources are too limited in his view for this to be appropriate. I don't know whether he added that school quality is the mainstay of middle class property values, although he might have, or the reality that every great academic institution has wise financial planning, a culture of respect for teachers, and a prudent financial reserve. Now let us review Mr. Weiland's vision for our high schools, from his own words. We would still be great, he argues, if students read philosophy by candlelight and did math with a stick in the sand. And why the fuss about new science labs? What has changed for science in the past 20 years? We should no longer value our long-standing parity with the best of the best high schools, or as he expresses it, "who cares about New Trier"? If that is the quality of public education you desire, he advises people not to move here or live here. Is Mr. Weiland an isolated eccentric speaking only for himself? I don't think so. Board member Richard Skoda voted "no" to new science labs, and Corcoran proposes to pay for his flat levy with a war on teachers. He does not pretend--at least not consistently--that nothing will need to be sacrificed if revenues fall behind the level of inflation.
Stephen Weiland December 15, 2013 at 06:19 PM
An isolated eccentric? While your use was clearly pejorative, I’ll take the eccentric part as a compliment, for I can think of few things more boring than being “normal.” Given that you have now descended into personal attack and insult, I will no longer engage. You are free to have the last word on my letter, and I’m fairly confident you will find the need to do so. There is a fine line between spirited debate and insult, one which you clearly do not respect given your freewheeling insults to those who do nothing other than dare to have a different opinion. We’ve never met, but if we ever do, I’d still give you a hug and wish you merry Christmas.
Linda Burke December 15, 2013 at 07:23 PM
I am sorry to give the false impression that I meant to insult Mr. Weiland--I dislike personal insult and had no such intention. My point was that he is NOT an isolated eccentric, but speaking from the mainstream of the group that promotes the flat levy.
Devon Chenelle December 19, 2013 at 05:51 AM
"I think that we can now be fairly certain that the works of Ayn Rand, George Orwell, and Aldous Huxley do not grace her recommended reading lists...then Ms. Burke places her politics somewhere among Marx, Mussolini, and Chavez...a play right out of the Alinsky manual" Weiland are you insane? This is local low-stakes school-board politics, and you're trying to politicize it by comparing an opponent of yours to fascists and communists. Additionally I suspect you yourself may not have read Orwell and Huxley, in spite of your haughty recommendation. Both men were avowed socialists. By the way, are you literally insinuating we will find ourselves in a downward spiraling dystopia if we provide more funds to our public schools? I can only hope that was a joke. Sadly the local school-board, a governing body that ought to be devoted to local pragmatism, has been hijacked by delusional wannabe political theorists. Hopefully those who have divided the community and paralyzed the board in their delusions of political grandiosity will be duly voted out in the next election.

Boards

More »
Got a question? Something on your mind? Talk to your community, directly.
Note Article
Just a short thought to get the word out quickly about anything in your neighborhood.
Share something with your neighbors.What's on your mind?What's on your mind?Make an announcement, speak your mind, or sell somethingPost something
See more »