The rate of inflation has been announced for the year 2008.

The chart to the right tells the tale. (Click to enlarge.)

The Consumer Price Index increased only 0.1%.

That’s not 1%.

That’s 1/10 of of 1%.

Worse even that the 1.1% for the twelve months I reported in December in

With school districts having grown used to 3% or so (4.1% last year) and many school districts having signed teacher packages in that range, even above, you can bet there will be some worried faces today.

Oops.

Lots of schools are closed today, so the consternation probably won’t come until Monday.

Tax districts can, of course, always go to the voters and ask permission to raise taxes.

Below are the CPI’s for used for the Property Tax Cap (PTELL is the acronym) since its institution. Remember that the years given are for the assessment year. Tax collections based on these years are one year later. For example, the 2008 assessment year taxes for which the CPI was .01%, but has not been officially announced by the Illinois Revenue Department, will be collected this spring

1990 – 5.0 (5% Max, even thou CPI was 6.1%)
1991 – 3.1
1992 – 2.9
1993 – 2.7 (5% for Cook)
1994 – 2.7
1995 – 2.5
1996 – 3.3
1997 – 1.7
1998 – 1.6
1999 – 2.7
2000 – 3.4
2001 – 1.6
2002 – 2.4
2003 – 1.9
2004 – 3.3
2005 – 3.4
2006 – 2.5
2007 – 4.08 (rounded up to 4.1)

In addition to this cost of living increase, local tax districts get money from any new construction which has occurred since the year before and assessment increases from any tax increment financing districts which are expiring.

But McHenry County Supervisor of Assessments Donna Mayberry told township assessors last month that she expected negative multipliers this coming year.

Almost nothing for an inflationary increase from the Tax Cap and the assessment base going down.

Now, that’s a double whammy.

Finally, with new construction way down, one might conclude tax districts are facing a triple whammy.

There has been a move in the Illinois General Assembly to switch the measure of inflation from the CPI—to which taxpayers can relate—to a more friendly index. There are two out there that are more friendly to government-oriented folks.

One measures the increase in the cost of government. (I don’t know if the trillions being printed in Washington are included or just state and local government increases.)

The other, the employment cost index, measures the cost of employees—salaries, health benefits, etc.

On year I checked in the early 2000’s would have allowed almost twice as high an increase under the employment cost index as it would have been under the CPI.

Undoubtedly a strong effort will be made to change the inflation definition for the Real Estate Tax Cap.

And, if you don’t think so, read this article from right before Christmas.

Of course, Home Rule units like the City of Crystal Lake have other options. They are not constrained by the Tax Cap.

Such municipalities could get raise their real estate tax rates or follow Crystal Lake’s example. Under the leadership of Mayor Aaron Shepley, its council raised its ales tax rate by 75%.

One wonders how orator C.L. McCormick (R-Vienna), a contemporary and from the same district as Paul Powell, would have waxed about the “tax eaters,” a term he coined about 1972.

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The strikers are from Huntley School District 158. The city hall with the blue skies overhead is Crystal Lake’s.