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Tax Board Zaps Nuclear-Powered Ill. District

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Nuclear power in Byron, Ill., built a public school system so lavish it resembles a well-funded college.

Never mind bake sales, car washes, and auctions. Well-paid teachers and their 1,600 students in this small town for years have seemingly wanted for nothing: The shiny fleet of school buses stops at internally heated sidewalks that lead to a $6 million physical education center, generously stocked classrooms, computer and photography labs, and state-of-the-art school libraries.

All of this thanks to the Commonwealth Edison Co. and its nuclear-power plant, whose cooling towers loom over Byron. Property taxes generated by the giant utility have allowed the three-school district to spend $11,000 a year per student, more than twice what neighboring districts average.

But the district's golden age may have ended with a vote of the state tax board.

In January, Commonwealth Edison won an important round in its lengthy battle with local taxing districts to lower the assessments on the Byron plant by nearly two-thirds. The Illinois Property Tax Appeal Board ruled that from 1989 to 1992, improper assessments of equipment inside the plant had led to the plant being overtaxed, by up to $1 billion a year. And while agencies in Byron are appealing, the utility is pressing a similar fight over taxes assessed in 1993 through 1995.

If the Byron school district, which depends on Commonwealth Edison for 97 percent of its assessed valuation, loses its appeal, it could ultimately be responsible for paying the utility $40 million.

And the schools are not the only prospective losers. The Byron fire district, the Byron museum district, Rock Valley and Kishwaukee colleges, and other taxing districts might owe Commonwealth Edison refunds totaling $70 million.

Lawyers on both sides say the actual amount of any refunds hinges on a state appellate court's decision sometime next year.

Local residents--aware that Byron's fat days apparently are behind it--are left wondering if the district's financial problems could have been avoided.

"How often do you hear about a district with too much money?" said Michael Cichon, a resident of Byron, Commonwealth Edison employee, and father of two.

After the Gold Rush

Twenty years ago, before Commonwealth Edison decided to locate in Ogle County, Byron was a sleepy rural community. The plant began construction in the late 1970s; by the 1980s, it came to dominate the town's economy, paying for new schools, a town museum, a modern library, a forest preserve, a golf course, and a fire company.

The amenities, paired with low property taxes, attracted families from as far away as Chicago, 90 miles east. And for years, the housing market boomed.

Even with what's now at stake in Byron--the loss of millions of dollars in future tax revenue--local authorities are reluctant to criticize Commonwealth Edison, which employs many of the town's residents.

"We're all working together for the best resolution," said George Fisher, a lawyer representing the local taxing bodies appealing the state board's decision. "Panic and devastation is not the temperament here."

Representatives of the utility are similarly conciliatory. Dennis Daymon, a Commonwealth Edison spokesman, said the Chicago-based utility doesn't intend to bring Byron or any of the local taxing districts to its knees.

"We've been a positive influence here, and we're willing to sit down and work out the best means of paying back taxes," he said.

Byron school officials, meanwhile, said the fallout from the decision is all around them. An annual budget that used to hover at $24 million now stands at $15 million, sending many school employees packing.

David Zumdahl, the principal of Byron High School and a former district business manager, lamented the losses. The schools, which had a staff of roughly 350, have laid off 40 teachers, aides, and assistants, he said. Byron's special education program, which serves students from several area districts, has trimmed social workers and psychologists.

"There's the feeling that we've had an excellent program and don't want to give up the strides we've made," Mr. Zumdahl said. "But things won't be the same."

Benefits Questioned

Byron's huge reliance on Commonwealth Edison is not unique in Illinois, where more than two-thirds of school funding comes from local property taxes. Several school districts in the state that are home to prime real estate are able to spend double or triple the money of neighboring districts. Where Byron has its nuclear plant, other small districts have an upscale shopping center or an industrial complex within their boundaries.

But as the prospects of remaining one of the state's wealthiest school districts begin to dim, some Byron residents claim that district officials have mismanaged their golden egg.

"The issue comes down to big business and its employee base," said William Young, the Byron superintendent. "The vast majority of the parents here support us."

One thing is abundantly clear: If Commonwealth Edison pays less, everyone else will pay more.

Taxes in Byron rose 17 percent in 1995, according to the Ogle County collector, and additional increases are expected if the appellate court sides with the utility.

"Someone will have to pay the bills," Mr. Cichon said. "Unfortunately the taxpayers will be there, wallets in hand."

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