The inadequate language of the Property Tax Cap encourages tax districts to “balloon” levy.
The Tax Cap, know as PTELL to the technocrats, has two parts.
In the first, which is most widely known, tax districts like schools and county governments can automatically get an inflationary increase in their real estate taxes equal to the increase in the Consumer Price Index or CPI.
But, there is more money that can be gotten.
That is what results from new construction.
There was some last year, that is, during 2012. Considered Route 14’s new stores.
To get this new revenue, a tax district must guess how much is out there.
McHenry County officials are guessing that it is $24,024,717.
That sounds like a lot, but the total assessed valuation of McHenry County was $7.9 billion last year.
So, if my math skills are working, it looks as if the new assessed valuation growth was 3/10 of one percent.
Not much in percentage terms, but it should bring in about $240,000 in new revenue.
How much easier it would be if the Tax Cap law were amended to allow any tax district just to check a box if it wanted to capture taxes on all new growth.
They it could hold taxes on current property owners constant by just levying the extension, that is, the amount of taxes authorized for collection the year before.