Tax Ruling May Convert Feast Into Famine for Town’s Schools


The golden age of this small town’s schools began in the shadow of a nuclear power plant.

Thanks to the $1-billion property tax base the plant provided, Byron’s school district boasts a sparkling $6-million physical education center, a photography lab and modern buildings that resemble a small college campus--all in a picturesque community of about 5,000 people.

Purchasing a new fleet of school buses every year hasn’t been uncommon; for a school system rolling in cash, it was easier than maintaining old buses. And the district spends about $11,000 per student, about twice as much as many neighboring communities.

But a state tax board’s recent ruling that the plant--owned by Commonwealth Edison--was over-assessed for years threatens to bring an end to the district’s prosperity. Already, teachers’ aides have been laid off, salaries frozen and some full-time teachers handed part-time assignments.


In a town where heated discussions still pop up over how the tax money was distributed in the first place--with residents of neighboring towns grumbling that they deserved a piece of the pie too--some argue that the school came to rely too much on the plant’s riches.

“It was a have-not school before the nuclear plant, then it became a have-more,” said Grant Landis, a longtime resident and former school board member. “They have a tendency to flaunt it a bit, and that doesn’t sit well with the rest of communities around here.”

About 30 years ago, Landis recalls the school district was so poor that the only way it could build a new elementary school was with a state grant. Other residents remember when buckets were used to catch drips from leaky roofs the district couldn’t afford to repair.

That all changed in the 1970s, when Commonwealth Edison decided to build its plant in this heavily agrarian community about 90 miles west of Chicago on the banks of the Rock River.

Ten taxing bodies--including the Byron fire district, Ogle County and Oregon School District--benefited from the plant, but none as much as the Byron School District, which depends on the plant for 95% of the district’s revenue, or $22.5 million a year.

Along with a jump in the amount of money spent per pupil, teacher salaries rose too, attracting qualified instructors from other districts--another complaint of nearby communities.

But in January, the Illinois Property Tax Appeal Board ruled that the plant was overassessed from 1989 to 1992. It said local officials tried to circumvent the state’s 1979 ban on personal property taxes by reclassifying the equipment in the plant as real estate.

The board slashed the assessment placed on the plant during those four years--$1 billion during the last two years--to between $318 million and $370 million.


Commonwealth Edison spokesman Art Massa said the utility has no desire to bring any of the taxing bodies to “a precarious position.”

But the districts could be forced to pay Commonwealth Edison a multimillion-dollar refund. Some estimates say the school district alone could owe the utility $30 million. And property taxes--once the envy of neighboring towns and a big draw for real estate--are sure to skyrocket.

The final outcome of the tax battle is uncertain, as various appeals wind their way through boards and courts.

That hasn’t stopped residents of this town--all of whom, it seems, work at the school or plant or have a wife, husband, brother or daughter who does--from debating the issue.


Mike Cichon, who has a son at the grade school and is employed at the plant, has formed a group to monitor how the school spends its money.

He said he fears that the Byron school officials “mortgaged the future” by spending money they knew was the subject of a fight.

“Yes, we should have better schools, but do we need the best of everything?” Cichon said. “And I don’t even know if what we’re getting is the best.

“When and if Commonwealth Edison says it wants the money, then all this now will look like nothing. What’s happened up to now is like the first pitch in a ballgame,” Cichon said.


Other Byron residents, however, defend the school district. They say it had to spend the money it took in from the plant.

George Fisher, an attorney for the taxing bodies appealing the state ruling, said the amount that the district spends per pupil is inflated because it subsidizes special education students from other districts.

What no one disputes is that Byron’s economy was altered dramatically, mostly for the better, when the nuclear plant’s construction began. The downtown is healthy and surprisingly diverse.

And it has become increasingly popular with both retirees and baby boomers willing to put in long commutes in exchange for the low tax rates, good school system and Norman Rockwell-like atmosphere.


That is changing, said Landis, who went into real estate after Commonwealth Edison bought much of his family farm for the plant.

“People used to walk in to my office and say, ‘I want to locate in the area and it has to be in the Byron School District,’ ” Landis said. “Now they say it has to be anyplace but Byron.”