The Tax Cap Did Not Make Your Tax Bill Go Up, Tax District Officials Asking for More Money Did That


Under the heading of

“Why your tax bills went up,”

in Kevin Craver’s article on the issuance of Property Tax bills is a misstatement from the McHenry County Supervisor of Assessments.

The Northwest Herald story says Robert Ross indicated,

“The answer is a simple one – mainly because of the tax cap, and to a lesser extent the record number of people who challenged their assessments.”

That indirect quote, if accurate, is completely wrong as far as implicating the Tax Cap for tax increases.  It is true if you are one who did not appeal your real estate assessment last year.  The latter shifts the tax burden from those who receive assessment cuts to those who don’t.

Tax increases are caused by elected (and appointed) tax district officials (mainly school board members) asking for more money.

Over the first approximately fifteen years of the life of the Real Estate Tax cap law, assessments were shooting up much more than the increase in the rate of inflation.

I remember the year before the Tax Cap went into effect in the early 1990’s real estate inflation was huge.

Crystal Lake High School District 155’s Board took the entire 17% increase. In other words, the last year before the law, the largest high school district in McHenry County raised taxes 17%.

Talk about taxing to the max.

In subsequent years tax districts were not allowed to increase their tax requests by more than in the increase in the Cost of Living, even if their assessments increased by a tremendous percentage.

"Balloon levying" wrings every tax dollar possible out of property taxpayers.

There was an exception and that was for new construction.

In order to make certain they got every last dime, tax district “ballooned levied,” that is, asked for far, far more than knew they could get so they would not leave the new construction tax crumbs (really more than crumbs until real estate values collapsed) on the table.

When property inflation was higher than the cost of living’s increase, the tax rate was forced down.  That was done as the County Clerk’s Office applied the Tax Cap law.

Remember all those press releases from local school boards and municipalities about how good they had been to taxpayers because they lowered their tax rates?

Well, it was claiming credit for something the County Clerk did automatically in order to limit the total taxes that could be pulled out of taxpayers’ pockets.

If assessments went up more than inflation, the tax rate had to be adjusted downward to comply with the collection limit imposed by the Tax Cap, that is, last year’s collection, plus whatever the increase was in the Consumer Price Index, plus new growth.

The result is that most, if not all, local tax districts are beneath the tax rate they are allowed to charge under state law.

So, if assessed valued decreases, the County Clerk must raise the districts’ tax rates if they as for more money.

If they do what the majority on the McHenry County Board did

(See “Remembering the County Board Members Who Voted to Maximize Our Tax Increases,”)

the district still balloon levies in order to grab all the new construction assessed valuation.

And, if it takes a higher tax rate, that’s what taxpayers see.

The electronic sign outside of the McHenry County Treasurer's Office says, "First Installment Due."

Ross tells it as it is in this sentence in the same article:

“When you have tax levies going up and assessments down, there’s only one way the rates can go.”

And that’s what will continue to happen until tax districts start bumping up against their statutory limits.

While I have not done an analysis of which tax districts increased or decreased (some did, e.g., my Village of Lakewood, where the pre-Tax Cap, non-referendum Golf Course Bonds were paid off last year, cutting real estate taxes a big chunk) you can read what happened to various categories of tax districts in the article linked below:

Municipalities Cut Tax Take! Fire Protection Districts Cut Even More! Libraries, Sanitary Districts Flat

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If you would like a chuckle, please read Kevin Craver’s rant about how his wife, cats and he could cover all the tax districts to which they pay taxes.


Comments

The Tax Cap Did Not Make Your Tax Bill Go Up, Tax District Officials Asking for More Money Did That — 2 Comments

  1. There are few things in life more confusing than Illinois property taxes.

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