There are plenty of articles in the Northwest Herald about tax levies this time of year.
Let me give a short course in how to report what’s going on.
Headlines have read, “[X tax district] holds levy constant.”
What does that mean?
Does it mean tax bills won’t go up?
Does it mean that the tax district won’t get more money than it did last year?
Legally, Home Rule municipalities can get as much new money as they ask for, so let’s look at all the other tax districts–schools, park districts, townships, non-Home Rule municipalities, etc.
Reporters and taxpayers should start with the amount of money that was authorized to be collected in this year’s property taxes. (That’s the figure in the lower right hand corner of the table below.)
That information can be found on the McHenry County Clerk’s web site here.
If the levy is higher than that extension, the tax district will be collecting more money next year than this year.
There is an upper limit for the current tax base, which is the assessed valuation number in the upper left hand quadrant on the table. (It is subject to some changes because of assessment appeals, but not too much.)
The Property Tax Cap or PTELL, as it is identified on the chart, this year allows for an inflationary increase of 1.7%.
So, if a tax district wants to maximize its tax take, its levy next year must be–for this part of the levy–at least that much more than last year’s extension (the bottom right hand number).
But finance guys stress that if their tax districts do not take this extra 1.7%, they will “LOSE IT FOREVER.”
That’s the taxeaters’ view point.
It is equally honest to say
if the tax district takes it,
the taxpayers will lose that money forever.
There is a second consideration in each year’s levy.
There is some new growth, new construction, in other words.
The Supervisor of Assessments Office can provide a good estimate of that figure.
For the McHenry Grade School District, new growth was $1,334,953 in assessed valuaton. (There’s probably a bit more in the Lake County portion of D15, but hardly worth worrying about for this article.)
So, let’s call it $1.3 million to make calculation easier.
The total assessed valuation last year for the McHenry Elementary School District last year was $1,005,550,320. That’s a bit over a billion dollars.
If my math is correct, the new construction amounted to a bit more than one-tenth of one percent of last year’s real estate assessment base.
To capture it, then, the levy would have to be a tiny bit over one-tenth of one percent more than last year’s extension.
So, if the McHenry Grade School Board wanted to maximize its tax take it would multiply 101.8+ times last year’s extension of $46,121,592.20.
Keeping the tax levy constant–in D15’s case at 49,282,563 (the number at the bottom of the lower left hand column entitled levy request would result in the district taxing to the max.
The headline could still read, “McHenry Grade School Keeps Levy Constant,” from which most readers would probably conclude taxes were being held constant.
But, I hope you can see that would not be the case.
Perhaps reporters covering levy meetings should be told to do some research about the real meaning of what a board does. It’s not likely a topic taught in journalism school, but its mastery is necessary if one is to convey what happens in levy meetings.
The McHenry Grade School District meeting to pass its levy is tonight at 6:30.
Since the McHenry Grade School District is meeting tonight at 6:30 to pass its levy, let’s look at the information on it.