Private School Sues Village for Unlawful Taxation

PRIVATE SCHOOL SUES VILLAGE FOR UNLAWFUL TAXATION 

RIVER FOREST, Ill.—Today Keystone Montessori School filed a complaint against the Village of River Forest for requiring it to enter into an unlawful contract which has deprived the school of a property tax exemption for 20 years. The school requests a declaratory judgment from the Circuit Court of Cook County that the agreement, signed in 1998, is void as an infringement of public policy and a violation of the school’s equal protection rights under the Constitution.

In the summer of 1998, at the behest of the Village President, Keystone moved into its building at 7401 W. North Avenue under a lease with an option to purchase but could not operate the school there under the village’s zoning code. The village and Keystone agreed that the school would apply for an occupancy permit and that the village would waive strict compliance with its zoning code to allow the school time to meet zoning requirements. Classes began in September and renovations were two-thirds complete in October when village officials told Keystone administrators that the zoning would be changed to accommodate the school only under the condition that the property continued to generate property tax revenue for the village, requiring the school to forfeit its right to a tax exemption under state law as a nonprofit organization. River Forest refused to approve Keystone’s zoning permit or grant an occupancy permit unless the school agreed to forfeit its right to a property tax exemption. With so much already invested and the students at risk of their education being interrupted, Keystone signed an agreement that it would pay real estate taxes, now an annual burden of $96,000.

Since 2002, Keystone has made multiple attempts to amend the agreement but has been voted down by the village trustees every time. “We have long tried working with village officials to get this injustice fixed. The village is placing a significant burden on our school and families; they pay taxes to support the River Forest public schools, then they pay tuition to Keystone to educate their children at no cost to River Forest, and finally, through their tuition they also pay taxes on the school building to benefit the River Forest public schools even further. Is that fair?” asked the school’s administrative director, Vicki Shea.

The education Keystone currently provides saves village taxpayers, on average, about $329,912 annually in education costs. In the last 20 years Keystone has saved taxpayers over $5,000,000, not including inflation. There are three other private, nonprofit schools in the Village of River Forest, all of which operate with property tax exemption.

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