Editorial: Blame SIU Enrollment for Carbondale’s Property Tax Increases
For umpteen years, the city of Carbondale could dependably count on generating $1 million per quarter percent of levied home-rule sales tax. In other words, by raising the sales tax in Carbondale from eight percent to its current rate of 8.25 percent, city government could almost guarantee an additional $1 million in revenue.
But not anymore. For the next fiscal year, the city is projecting only about $800,000 per quarter percent of sales tax revenue.
That’s all thanks to tanking SIU enrollment, and it’s probably going to cost you money. Here’s why, and what outgoing SIU system president Glenn Poshard, Carbondale campus chancellor Rita Cheng, and SIU’s trustees need to hear from as many people as possible.
The city actually levies different types of sales taxes, but after commingling some of those revenues for the sake of simplicity, as of this writing the totals are down almost $140,000 from last year, and down $290,000 from budgeted projections.
As this is happening, the state’s woebegone pension system is collapsing, and Illinois municipalities, including Carbondale, face ever-skyrocketing— and legally mandatory— pension payments.
Faced with rapidly rising bills and a once-dependable but now withering source of sales taxes, the Carbondale City Council voted on December 17 to cover the budgetary hole by raising property taxes.
Nobody likes to pay taxes, and property taxes are especially unpopular in Carbondale, a sentiment aggravated by the lower property values and tax rates in nearby communities. (If you rent, by the way, you’re not insulated from these rising taxes— landlords across the city will probably pass along the larger bills to tenants in the form of increased rent.)
But don’t blame the city council for increased property taxes. SIU’s leaders deserve the blame, from the trustees to Poshard and Cheng.
Since its peak in 1991, on-campus SIU enrollment has fallen in a shocking fashion, by 5,722 students. This spring, enrollment is down by 1.6 percent from spring 2013, a crisis that Cheng said was “encouraging news” and “heading in the right direction” in a letter to the university last week.
Meanwhile, enrollment is rising, again, at Southeast Missouri State University in nearby Cape Girardeau. The preliminary headcount for the University of Illinois at Urbana Champaign is sharply up, by 630 students.
Unlike their predecessors, who seemed to live in a fantasy world where the university’s monumental enrollment collapse was no troubling matter, at least Poshard and Cheng once said they understood the devastating economic consequences. Neither, however, has reversed the downward spiral, and they may have made matters much worse. Poshard and Cheng, in fact, might have presided over the steepest enrollment decline in any three-year period in the school’s 144-year history. The fall 2014 headcount may have been the university’s smallest since 1964.
In fall 2013, SIU bled 527 on-campus students compared with the previous fall, maybe second only to the miserable 2012 decline, when the number dropped by 1,011. During this two-year period, that’s 1,538 students who not only are not paying tuition and fees to SIU, they’re not paying for anything in this area, from rent and utilities to books and groceries, from concert and athletic tickets to, yes, beer. That’s 1,538 students who are not paying sales taxes in Carbondale this year.
SIU likes to boast about its economic impact on the area. Last August, a university news release crowed about how the university distributed nearly $19 million in two rounds of fall-semester federal financial-aid refunds to 6,100 students.
Fair enough, but it’s completely insufficient against the tide of falling enrollment.
In the late 1990s, a study completed with help from SIU’s Dunn Richmond Economic Development Center estimated that each student contributes between $10,474 and $11,649 to the local economy. Using the lower estimate, in the last two years SIU’s bald incompetence at attracting students cost our community $26,698,226.
But wait— there’s more. Much more. That figure doesn’t account for inflation. A conservative annual estimated rate of inflation of 2.5 percent would mean that prices have risen at least forty-five percent since the study came out in the late 1990s. That raises to $38,712,427 the amount of money that catastrophic SIU enrollment declines have removed from the local economy during the last two years alone.
That, however, is still not all. The study claimed that every dollar spent by students circulated through the local economy five times before heading to a bank or a merchant outside the area. So the real loss to Carbondale’s economy certainly is much greater than $38 million— it’s more than $193 million, and that’s just during the last two years.
Want to overload a calculator and induce clinical depression at the same time? Go back to the 1991 enrollment peak, compound the number of students lost since then, and then run the numbers.
This directly hurts SIU, by the way. In addition to less in tuition and fees from fewer students, the university receives 0.25 percent of the city’s sales taxes to help pay bonds issued to fund the construction of Saluki Way. When those city sales-tax receipts fall, SIU gets less money to pay off the Saluki Way bonds. Not that anyone at SIU will be held accountable for this, of course. (It’s not clear that anyone ever is.) The university just raises tuition and fees to cover the gap, making an already overpriced university even more expensive and less attractive to prospective students and rooking harder the fewer who actually come here.
And with a shrinking number of students to serve, SIU is cutting back on personnel. In fall 2009, the university employed 5,244 full-time-equivalent persons, but by fall 2012 the number had dropped by 7.6 percent, to 4,844. Unless enrollment immediately turns around, that number almost certainly will continue to drop, and at an accelerated clip.
If you’re a business owner or manager and are sweating because your numbers are down, SIU enrollment is a major factor, even if students aren’t your primary customers. If you aren’t getting the hours at work you’d like and your income is suffering, SIU enrollment is a major factor. If a favorite restaurant or shop has closed, SIU enrollment is a major factor.
And when your property-tax bill comes, and it’s larger than last year, tanking enrollment is a primary reason for that, too.
So the next time you encounter Poshard or Cheng or one of the trustees, politely let them know that their incompetence at bringing students to SIU is taking money out of your wallets. Maybe even send them the bill. But expect the usual level of responsibility from the administration— which is to say, zero.