A small town in rural St. Clair County is trying to draw young families into its school district through the unusual step of giving back a quarter of property taxes collected from new homeowners.
Homes built within a tax increment financing district encompassing planned subdivisions in St. Libory can receive the refund for up to eight years, according to Keith Moran with Moran Economic Development. The Edwardsville-based firm was hired by the village to spur growth in the town of about 615 people.
The homeowners can apply to receive the refund, which splits their property taxes between the school district, city and homeowner. The school would receive half the tax revenue, while the city and homeowner would receive a quarter of the taxes. Typically, TIF districts collect tax revenue to reimburse developers for construction costs.
St. Libory's incentives are not common, according to Thomas Henderson of the Illinois Tax Increment Association in Springfield. Though, Henderson notes similar incentives were used for a residential development in East St. Louis.
Henderson said the village can only refund homeowners for eligible expenses, such as the cost of rehabilitating a building, purchasing land or reimbursing interest on a mortgage or home improvement loan.
The "unique incentive" intends to draw people to the village, located 13 miles southeast of Freeburg, Moran said. The tax refund along with other incentives, such as waiving construction-related fees, is meant to bolster enrollment in the St. Libory School District.
Some interest has been shown in the incentives but no one has committed to building yet, Moran said.
"We need to increase the population of the village and are working with the school district on finding creative ways to bring folks to the village," Moran said. "Basically, we need more kids in the school."
The district has a single elementary school with students in kindergarten through eighth grade. The school has seen enrollment decline from 104 students in 2003 to 86 current students. Enrollment slowly declined for the past 15 years, according to Principal Lacey Levin; the district had 205 students in 1968.
Levin said she supports the incentives in the belief more students will bring with them additional revenue to replace state money lost in the past two years. State lawmakers are considering further cuts in school money in the coming fiscal year as well.
About 51 percent ($391,000) of the school's revenue stems from state money while about 30 percent ($233,000) comes from local property taxes, according to the district's most recent Illinois School Report Card.
"The families that are here have been here a long time," Levin said. "We don't see a lot of influx of new families moving in. The growth isn't there. It's not like we'd like to see it."
Some of the subdivision plats where the incentives are offered sat undeveloped for more than 10 years, Moran said. The tax incentive includes a majority of the northern half of the village's boundaries.
Hopes new families would be drawn to the village with the construction of the nearby Prairie State Energy Campus never came to fruition, Levin said, and the district combined some classrooms this year as a cost-saving measure.
"That's why it was a no-brainer to try and save money by combining grades," Levin said. "Any worries about the quality of education have not come about. Our test scores are one of the highest in St. Clair County."
More than 92 percent of St. Libory students met the state's expectations on the Illinois Standards Achievement Test in 2012. Levin said the district's quality of education stems partially from the one-on-one attention teachers can pay to students in a smaller district.
The district's student to pupil ratio is much less than the state average, about 11 students per teacher in St. Libory compared to 19 students for each teacher statewide. The number of students in each grade varied from 7 to 12 last year, according to the state report card.
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Contact reporter Daniel Kelley at firstname.lastname@example.org or 618-239-2501.