Property Tax Cutting & Raising Referendums in Tax Cap Counties

State Rep. Allen Skillicorn asked the Legislative Research Unit to take a look at two questions:

  1. Could property taxes have been lowered by referendum before PTELL [FN 1] [called the Property Tax Cap by most folks]?  If so, did that ever occur?
  2. Is it still possible in the non-PTELL counties to do so?  If so, can a PTELL county revert to non-PTELL status?

McHenry County Blog will share the reply over the next few days.

PTELL-Authorized Referenda

PTELL has provisions authorizing eight types of referenda.

Six of them authorize taxing districts (or their voters) to initiate referenda to:

• become subject to PTELL [FN 33]
• set the rate for a new tax [FN 34]
• increase the “limiting rate” used to calculate the limit on tax extensions [FN 35]
• increase the tax extension limit (used to limit the growth of a tax rate from year to year) [FN 36]
• establish a levy for a new taxing district (or for a district with no previous levy) [FN 37]
• establish or increase a base tax extension for debt service [FN 38]

Those kinds of referenda, except the first, apply only to districts that are subject to PTELL.

No such referenda would directly change a tax rate, other than a referendum seeking to authorize an entirely new tax extension. We describe below the last two types of referenda, to authorize a reduction of a rate for educational purposes and authorize some PTELL counties to revert to non-PTELL status.

Referenda to Reduce Extensions for Educational Purposes

Voters in a school district subject to PTELL can initiate a referendum by petition to reduce the district’s tax rate for educational purposes, if the district’s “adequacy target” (as calculated under the school funding formula) [FN 39] exceeds 110% in the calendar year immediately before the year when the reduction would take effect.

The petition must be signed by 10% of voters in the district, and cannot propose a reduction by more than 10% or a reduction that would cause the district’s adequacy target to fall below 110%. [FN 40]

If a majority of votes are for the proposed reduction, the tax rate will be reduced by the proposed amount. Once such a referendum has been held, a similar one cannot be held in that district for the next consolidated elections. [FN 41]

More tomorrow.


Property Tax Cutting & Raising Referendums in Tax Cap Counties — 2 Comments

  1. Here is the flaw in the Adequacy Target/110% escape hatch:

    There is no recourse for a District which taxes at the Max Rates allowed by law (4% in Ed Fund, .8% in Spec. ed Fund. etcetera and so forth)
    *instead of spending that tax money on the adequacy target measured factors, the money is spent on higher than average Benefits, Salaries, Perq’s, and OPEBs for Admin and other personnel which are considered superfluous or unnecessary by the EVIDENCE-BASED Funding Law formula*


    What if the adequacy target is $80 million, and the school spends $120 million, but the calculated percentage of ‘adequacy’ is 70% because the money is not spent on what the State claims is ‘evidence based’?

  2. …to answer Coffey/SW in advance:
    1. Debt service is ~$10 mil
    2. State TRS contribution <$20 mil
    3. State&Fed Aid ~$20 mil

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