McHenry County Blog

The 2010 assessed valuation has been totaled for McHenry County and it’s down almost 10%.

That’s what a comparison of raw figures from the McHenry County Supervisor of Assessments Office indicate.

McHenry County real estate taxes this year will be based on assessed value of $10,132,926,407 unless the State Department of Revenue decides that figure does not reflect one-third of a three-year average  of assessed value to market value.

$10.1 billion reflects a significant drop from last year’s total of $11,210,739,442.

Grafton, Chemung (Harvard) and Marengo Townships led the devaluation race. Grafton property decreased in value over 17%, Chemung over 13% and Marengo over 3%.

Because tax districts overlap the Grafton-Algonquin Township lines, it is conceivable there ill be significant shifts of tax burden in such tax districts as Lake in the Hills, the Huntley School District and the Village of Lakewood.  Those on the Grafton Township side of the line may end up paying much less taxes to the overlapping districts than those on the Algonquin Township side of the line.
With assessed values down throughout McHenry County, one might think that tax bills will decrease.

My prediction is the same as the first year home prices started sinking.

Your tax bill will most likely increase.

McHenry County Townships.

That’s because virtually every tax district (include schools here) asked for the maximum amount they could get under the Tax Cap law.

That maximum is the amount the Consumer Price Index increased.  This year that means +2.7%, as I read this Illinois Revenue Department chart.

As long as assessed valuation was growing rapidly, tax district officials bragged about how their tax rates were less than the year before.

What complete dribble!

The way the Tax Cap (PRELL are the initials of the law’s title) works, if a district’s tax assessment base increases more than the increase in the cost of living, the tax rate must be cut so the district’s tax take will not exceed the increase in the cost of living.

Conversely, if last year’s tax rate multiplied times the new assessed value does not bring in last year’s property tax revenue, plus the increase in the CPI almost universally requested by tax district board members, the tax rate goes up.

That’s what happened last year.

It’s what I predicted over three years ago.

So, don’t think that a lower assessment figure will necessarily mean you will get a lower tax bill.

It could have meant that if tax district officials had not been greedy enough to request the maximum they could receive this year.

I have written about two districts where one board member tried to ratchet back the tax request for this year.

Grafton Township Supervisor Linda Moore made the suggestion, but lost the vote. A second vote was taken. This article has Rob LaPorta’s explanation. LaPorta notes that it will cost “11 cents per $100,000 home value.”

LaPorta is correct that township government takes relatively little of the total real estate taxes people pay.

But when every (or virtually every) tax district takes the 2.7% maximum amount allowed by state law, don’t be surprised if your tax bill is 2.7% higher than last year.

A similar request was made by John O’Neill at the levy meeting of the McHenry Grade School Board. I wrote about the unsuccessful effort in this article:

The Primal Urge of Government: Take As Much As It Can Get

A comment under that article leads me to believe that Aileen Seedorf made a similar unsuccessful suggestion to the Huntley School District 158 Board with similar results.

The board packet of McHenry County College is posted on its web site, just as I wish every government’s were. (Special hint to the Crystal Lake City Council.)

In it is a recommendation that tuition be hiked $2 a credit hour.

Kathleen Plinski

“At present, other major revenue sources are constrained due to the continued effect of the tax cap, the uncertainty of the level of state funding, and current economic conditions,” writes Interim President Kathleen Plinske.

She notes the Consumer Price Index increased 2.5% last year and that

“A $2.00 increase from $80 to $82 is a 2.5% increase.”

An extra $264,000 would be generated from the fee increase.

The technology fee would remain at $9 per hour.

“Statewide,” she notes, “the range of tuition and fee rates for FY 2009 is a low of $67.00 to a high of $131.00 per credit hour, with the average rate being $88.95.”

So, what’s that mean?

I wrote a rather expansive article about what it means to schools and local governments on Friday.

You might be interested to read some of the implications in

So, what’s that mean?

I wrote a rather expansive article about what it means to schools and local governments on Friday.

You might be interested to read some of the implications in

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.

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

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.

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

In an Illinois Community College Trustees Association report supplied to McHenry County College trustees is a little item that would go a long way to removing restrictions imposed by the Property Tax Cap.

See if you can figure out what this proposal would do:

“Improve the Property Tax Limitation Law

“Amend the current law to allow extensions to increase by the Employment Cost Index (currently the Consumer Price index) or 5%, whichever is least.”

The community college trustees join the Illinois Association of School Boards in asking for this large hole in the tax cap. The proposal would tie the tax cap to the “employment cost index,” which tracks changes in workers’ salaries. Now, the tax cap is tied to what it costs taxpayers to live, the consumer price index.

If passed, the result would be dramatic. If the legislation had been passed in 2003, when I first saw it, for instance, instead of being able to increase the amount taken from property owners (and, indirectly, renters) by 1.7%, schools and community colleges—or maybe even all tax districts—would have been allowed to increase their “tax take” by over twice as much—3.7%.

School officials are disturbed that when voters pass a tax rate hike referendum, the tax cap often permits schools from collecting the voter-approved tax rate from their tax bases.

The reason is that the tax base or the assessed valuation often increases more than the rate of inflation.

If home values in a tax district go up 5% in one year, for instance, as they have in many suburbs until quite recently, the school district is not allowed to take the entire 5% inflationary increase.

That means the tax rate goes down.

The school still receives whatever the percentage increase the tax cap allows.

The fact that tax districts regularly did capture this complete real estate inflationary increase during the 1980’s is one of the reasons tax caps were enacted.

What the schools want is a partial return to the days when their tax collections can exceed the rate of general inflation.

Other school districts have been unsuccessful in convincing their voters that tax hikes are necessary. Modifying the tax cap the way the Community College Trustees and School Board Association advocates would obviously make it easier to get more money, even in the face of voter rejection.

Of more merit is the Community College Trustees Association desire to be able to assess developer impact fees to support construction needed to house additional students…assuming additional classrooms are needed in an increasingly computerized learning environment.

And do you know what the increase in the CPI was for the last twelve months?

You can find that out and what the implications are to tax districts and taxpayers here.

In an Illinois Community College Trustees Association report supplied to McHenry County College trustees is a little item that would go a long way to removing restrictions imposed by the Property Tax Cap.

See if you can figure out what this proposal would do:

“Improve the Property Tax Limitation Law

“Amend the current law to allow extensions to increase by the Employment Cost Index (currently the Consumer Price index) or 5%, whichever is least.”

The community college trustees join the Illinois Association of School Boards in asking for this large hole in the tax cap. The proposal would tie the tax cap to the “employment cost index,” which tracks changes in workers’ salaries. Now, the tax cap is tied to what it costs taxpayers to live, the consumer price index.

If passed, the result would be dramatic. If the legislation had been passed in 2003, when I first saw it, for instance, instead of being able to increase the amount taken from property owners (and, indirectly, renters) by 1.7%, schools and community colleges—or maybe even all tax districts—would have been allowed to increase their “tax take” by over twice as much—3.7%.

School officials are disturbed that when voters pass a tax rate hike referendum, the tax cap often permits schools from collecting the voter-approved tax rate from their tax bases.

The reason is that the tax base or the assessed valuation often increases more than the rate of inflation.

If home values in a tax district go up 5% in one year, for instance, as they have in many suburbs until quite recently, the school district is not allowed to take the entire 5% inflationary increase.

That means the tax rate goes down.

The school still receives whatever the percentage increase the tax cap allows.

The fact that tax districts regularly did capture this complete real estate inflationary increase during the 1980’s is one of the reasons tax caps were enacted.

What the schools want is a partial return to the days when their tax collections can exceed the rate of general inflation.

Other school districts have been unsuccessful in convincing their voters that tax hikes are necessary. Modifying the tax cap the way the Community College Trustees and School Board Association advocates would obviously make it easier to get more money, even in the face of voter rejection.

Of more merit is the Community College Trustees Association desire to be able to assess developer impact fees to support construction needed to house additional students…assuming additional classrooms are needed in an increasingly computerized learning environment.

And do you know what the increase in the CPI was for the last twelve months?

You can find that out and what the implications are to tax districts and taxpayers here.