McHenry County Blog

David McSweeney

State Rep. David McSweeney is proposing at amendment to Senate Bill 1937 that would prohibit township governments throughout Illinois from increasing the amount of money they extract from taxpayers’ pockets for the next two years.

Unlike some legislators and local officials who try to tinker with property taxes, McSweeney knows the key word is “extension.”

The “extension” is the amount of money that a tax district is allowed to collect in a given year. It is usually well below the levy, which can be seen as a “wish-fulfillment.”

For example, McHenry County College increased its levy by nine percent, giving it bad publicity in the Northwest Herald, but having no impact on the Property Tax Cap-imposed limit of three percent (plus new growth).

Just as an aside, any tax district official that wants to cut taxes should vote to make his or her tax levy the same as the extension for the year before.

In any event, McSweeney is probably on a mission impossible, because there are thousands of townships in Illinois.

Plus, the record of what is happening to the bill show that his amendment has been assigned to the House Rules Committee, the place legislation where House Speaker Mike Madigan kills amendments he doesn’t like.

David From, State Director of the Illinois chapter of Americans for Prosperity, informed me of this amendment via the following email:

“I’m writing to ask you to take just a moment of your time to support legislation to place a two-year moratorium on the property taxes levied by townships. The legislation sponsored by State Representative David McSweeney (R-Cary) will be the subject of a committee hearing tomorrow morning in House Revenue Committee. We need to let committee members know that we support this common-sense moratorium on higher local taxes.

“Please take a moment to submit an electronic witness slip in favor of SB 1937 today!

“Illinois faces a dual problem when it comes to property taxes; they’re rising fast while Illinois’ median household income is dropping. In the four most recent years for which census data is available, Illinois median household income dropped by more than $3,000. At the same time, the suburban Daily Herald reported in November that “property tax levies were up nearly $4.8 billion” between 2005 – 2010.

“Click here to file an electric witness slip with the committee on behalf of Rep. McSweeney’s efforts to curb the increase of property taxes! Be sure to check “Proponent” in Section III (Position) & “Record of Appearance Only” in Section IV (Testimony).”

McHenry County has seventeen townships. Each township has two separate governments.  One is run by the Supervisor; the other by the Highway Commissioner.

The following made a good faith effort not to take every dime that they could. I put them on my “Honor Roll.”

ALDEN TOWNSHIP
2011 – $138,551.71
2012 – $125,589.92 (-9.4%)

ALGONQUIN TOWNSHIP
2011 – $1,812,281.41
2012 – $1,818,540.52 (+0.3%)

ALGONQUIN TOWNSHIP ROAD & BRIDGE DISTRICT
2011 – $3,989,082.24
2012 – $3,989,081.94

Both Supervisor and Road Commissioner in Hartland Township cut their budgets.

HARTLAND TOWNSHIP
2011 – $177,096.32
2012 – $168,120.44 (-5.1%)

HARTLAND TOWWSHIP ROAD & BRIDGE DISTRICT
2011 – $257,147.74
2012 – $249,843.80 (-2.8%)

HEBRON TOWNSHIP ROAD & BRIDGE DISTRICT
2011 – $223,260.02
2012 – $218,264.61 (-2.2%)

MARENGO TOWNSHIP
2011 – $303,002.43
2012 – $299,000.30 (-1.3%)

McHenry Township Hall

MARENGO TONSHIWP ROAD & BRIDGE DISTRICT
2011 – $496,211.57
2012 – $496,964.36 (-0.2%)

McHENRY TOWNSHIP
2011 – $1,876,425.79
2012 – $1,876,437.35

McHENRY TOWNSHIP ROAD & BRIDGE DISTRICT
2011 – $3,406,895.19
2012 – $3,406,912.40

NUNDA TOWNSHIP
2011 – $1,125,172.20
2012 – $1,125,172.20 (+0.3%)

Part of the Nunda Township Road District complex.

NUNDA TOWNSHIP ROAD & BRIDGE DISTRICT
2011 – $3,332,592.47
2012 – $3,332,591.92

RICHMOND TOWNSHIP
2011 – $258,886.96
2012 – $262,771.67 (+1.2%)

SENECA TOWNSHIP
2011 – $172,300.92
2012 – $168,000.60 (-2.5%)

SENECA TOWNSHIP ROAD & BRIDGE DISTRICT
2011 – $266,055.92
2012 – $266,053.68

But let’s put the role of township government in perspective.  Below is what each type of government has billed (extended) this year:

• Schools – $499 million (Only four districts are taking less money this year than they did last year.)

All the rest take $93 million will be funneled to special districts, as follows:

• 

  Huntley Village Hall

  Municipalities – Almost $67 million (municipal Tax Increment Financing Districts will receive $2.3 million more)

• Fire Protection Districts – $41.1 million
• Community Colleges – $32 million
• Townships – $26 million
• Conservation District – $19.6 million
• Library Districts – $16.1 million
• Park Districts – $15.6 million
• Miscellaneous Districts – $698,000
• Sanitary Districts – $672.000
• Cemetery Districts – $44,000

= = = = =
Other articles about the real estate tax bills that will be paid in 2013:

• Most Tax Rates for McHenry County’s Upcoming Tax Bills – Up 15% in Algonquin Township Part of Lakewood
• McHenry County Multiplier Increases Assessments 1.0243 for This Year’s Tax Bills, $1 Billion Assessment Loss Sends Tax Rates Soaring
• Property Tax Rates – Comparing This Coming Year’s to Last Year’s
• McHenry County Tax District Honor Role
• The McHenry County Taxman Cometh – Tax Bills on the Internet

Let’s put the Villages of Greenwood and Trout Valley on top, because they levy no property taxes.

While most local governments in McHenry County increased the amount they are taking from the public, a limited number asked for less money in the coming tax bills than they requested last year.

In some cases, it was just pennies.

In other words, the governments tried to get the same amount as last year, but probably through rounding managed to get a bit less.

Others made an effort to make more significant cuts.

Still others tried to get the same amount, but, again, probably because of rounding, got a tiny bit more.  They are not listed below.

The problem is that not many of those on the Honor Role get much tax money.

Property owners will be taxed $797 million this year.

Residential property owners will pay most of it–$640 million.

The bulk of local taxes go to school districts.

$499 million will go for kindergarten through 12th grade education.

There only four of them who are taking less money this year than they did last year.

Another $32 million will go to community colleges.

$93 million will be funneled to special districts, as follows:

• Fire Protection Districts – $41.1 million
• Townships – $26 million
• Conservation District – $19.6 million
• Library Districts – $16.1 million
• Park Districts – $15.6 million
• Miscellaneous Districts – $698,000
• Sanitary Districts – $672.000
• Cemetery Districts – $44,000

Almost $67 million will flow to municipalities.  Of that total, municipal Tax Increment Financing Districts will receive $2.3 million.  In reality, all of the TIF money is paid by property owners outside of the TIF districts when their local tax districts raise their levies in order to make up for the money that is diverted for cities and villages to spend as they will within those districts.

State law allowed all but non-Home Rule municipalities to increase their “tax take” by 3% this year. That was the increase in the cost of living as measured by the Consumer Price Index.

There is not limit on tax increases for Home Rule municipalities.  In McHenry County, they are Algonquin, Barrington Hills, Crystal Lake and McHenry.

Cartoonist Frank Higgins of the Chicago Sun-Times used this imagery yesterday in a cartoon.

Only the tax districts that actually cut taxes–even if by the smallest amount–are on the list.

The following districts will get less money in 2012 than they got in 2011:

Junior Colleges

• Rock Valley College

School Districts

• Nippersink (Richmond & Spring Grove) Grade School District
• Prairie Grove Grade School District
• Richmond-Burton High School District
• Harvard Unit School District

Cities and Villages

• Village of Algonquin
• Village of Barrington Hills
• City of Crystal Lake (excluding fire protection, net is up)
• City of Harvard
• Village of Huntley
• Village of Lake in the Hills
• Village of McCullom Lake
• City of McHenry
• Village of Prairie Grove
• City of Woodstock

Fire Protection & Rescue Squad Districts

• Crystal Lake Rural Fire Protection District
• Fox River Grove Fire Protection District
• Marengo Rescue Squad
• McHenry Fire Protection District
• Richmond Fire Protection District

Library Districts

• McHenry Library District
• Marengo Park District

Township Governments

• Algonquin Township Road & Bridge District
• Chemung Township Road & Bridge District
• Coral Township
• Dunham Township
• Hartland Township
• Hartland Township Road & Bridge District
• Hebron Township Road & Bridge District
• Marengo Township
• Nunda Township Road & Bridge District
• Seneca Township
• Seneca Township Road & Bridge District

Sanitary Districts

• Northern Moraine Water Reclamation District

= = = = =

Other articles about the real estate tax bills that will be paid in 2013:

• Most Tax Rates for McHenry County’s Upcoming Tax Bills – Up 15% in Algonquin Township Part of Lakewood
• McHenry County Multiplier Increases Assessments 1.0243 for This Year’s Tax Bills, $1 Billion Assessment Loss Sends Tax Rates Soaring
• Property Tax Rates – Comparing This Coming Year’s to Last Year’s
• McHenry County Tax District Honor Role
• The McHenry County Taxman Cometh – Tax Bills on the Internet

A taxpayer as seen by the Tax Foundation.

Taxpayers may be making more of a fuss this year than previously.

Maybe not.

Tax districts are getting less than 2% more this year, when the Property Tax Cap allowed them to get 3%.

So, some tax districts showed restraint in reaching into taxpayers’ pockets.

Those who took the time to compare the tax rates on last year’s tax bill (which can be found here on the County Treasurer’s web site until this year’s are posted) with those in my Sunday article will most likely find that their tax rates have increased for just about every tax district.

Yesterday I reported that the tax rates levied on our Lakewood home went up over 15%.

But that’s not all the bad news.

The Illinois Department of Revenue is going to increase assessments by 2.43% on all residential and business property in McHenry County.

Will that lead to wailing and gnashing of teeth?

Total assessed value against which the tax rates are multiplier is

• $7,886,571,742.  That’s $7.9 billion.
• $8,817,375,055 last year.  That’s a loss of $940 million.

Almost a billion dollars.

And, as I explained yesterday, because virtually every tax district in McHenry County is below its statutory maximum, school districts, municipalities, park districts, townships, you name it, have the legal right to increase their tax rates to the point where they get 3% more than was taken out of our pockets last year.

Surely, some will conclude that those on tax district boards believe filling the pockets of governmental entities is more important than maintaining the standards of living of their taxpayers.

There will be fireworks when the real estate tax bills come out, but it probably won’t be for celebration purposes.

There was more new growth in assessed valuation this year than last.

• $31.7 million in 2011
• $34.5 billion in 2012

But the new growth could not possibly pay for all the additional taxes demanded by our local governments.

• $797,394,337.99 will be billed this year.
• $783,689,437.41 was billed last year.

The extra taxers represent under a two percent increase.

That means a number of tax districts did not take the three percent allowed by law.

Maybe we should hold a celebration.

Maybe not.

= = = = =

Articles about other aspects of the 2013 property taxes in McHenry County:

• Most Tax Rates for McHenry County’s Upcoming Tax Bills – Up 15% in Algonquin Township Part of Lakewood
• McHenry County Multiplier Increases Assessments 1.0243 for This Year’s Tax Bills, $1 Billion Assessment Loss Sends Tax Rates Soaring
• Property Tax Rates – Comparing This Coming Year’s to Last Year’s
• McHenry County Tax District Honor Role
• The McHenry County Taxman Cometh – Tax Bills on the Internet

Lakewood’s new signs are not over a year old.

Here’s what it looks like for my Algonquin Township part of Lakewood:

• MCHENRY COUNTY – $1.00 per $100 of assessed valuation (up from 79 cents per $100 – this must include the 708 Board Mental Health tax)
• MCHENRY CO CONSV – 25 cents (up from 20 cents per hundred)
• [McHenry County] COLLEGE DISTRICT 528 MCC – 39 cents (up from 30 cents per hundred)
• [Crystal Lake Grade] SCHOOL DIST 47 – $3.95 (up from $3.20 per hundred)
• [Crystal Lake High] SCHOOL DIST 155 – $2.64 (up from $2.03 per hundred)
• CRYSTAL LAKE PARK – 46 cents (up from 38 cents per hundred)
• ALGONQUIN TOWNSHIP – 7.4 cents (up from 5.8 cents per hundred)
• ALGONQUIN TWP RD & BR – 16 cents ((up from 12.7 cents per hundred)
• LAKEWOOD VILLAGE – $1.04 (down from $1.15 cents per hundred)

The tax rate totals $9.966939 per $100 of assessed valuation (up from $8.696871 per hundred or over 15%)

I was able to make tax rate comparisons by looking at our last year’s tax bill.

My guess is that tax rates soared because assessments tanked.

Most probably cling to the hope that a lower assessment means lower taxes, but under the effects of the Property Tax Cap, it doesn’t work that way.

That because almost all tax districts in McHenry County are well below the maximum rate set by state law or referendum.

As property values climbed well above those of previous years, tax districts were limited to increasing their tax take by the rate of inflation as defined by the Consumer Price Index or CPI.

That forced the County Clerk’s Office to cut tax rates.

So, now if a district asks for as much as is allowed by the Real Estate Tax Cap (PRELL to the professionals) and getting it requires raising the tax rate in order to make up for lower assessments, that’s what happens.

The CPI increased by 3% for the tax bills that will be sent out in May. (For the next year, the figure is 1/7%.)

While a comparison with last year’s rates is too laborious a task for tonight, let me list some of the tax rates that will appear on this coming year’s tax bills. Pull yours out, make your own comparison and tell others what it is in the comment section. the rates are rounded to the nearest cent per $100 of assessed valuation, except for the lowest taxing district rates.

Community College Tax Rates

COLLEGE DISTRICT 509 ELGIN – 53 cents per $100 of assessed value
COLLEGE DISTRICT 511 – ROCK VALLEY – 45 cents per $100
COLLEGE DISTRICT 512 HARPER – 41 cents per $100
COLLEGE DISTRICT 528 MCC – 39 cents per $100

School District Tax Rates

[Alden-Hebron Unit] SCHOOL DIST 19 – $5.37 per $100
[Barrington Unit] SCHOOL DIST 220 – $3.99 per $100
[Cary]Grade] SCHOOL DIST 26 – $3.93 per $100
[Crystal Lake Grade] SCHOOL DIST 47 – $3.95 per $100
[Crystal Lake High] SCHOOL DIST 155 – $2.64 per $100
[Carpentersville Unit] SCHOOL DIST 300 – $5.61 per $100
[Fox River Grove Grade] SCHOOL DIST 3 – $5.34 per $100
[Harvard Unit] SCHOOL DIST 50 – $6.21 per $100
[Huntley Unit] SCHOOL DIST 158 – $5.48 per $100
[Johnsburg Unit] SCHOOL DIST 12 – $5.57 per $100
[Marengo Grade] SCHOOL DIST 165 – $2.96 per $100
[Marengo High] SCHOOL DIST 154 – $2.87 per $100
[McHenry Grade] SCHOOL DIST 15 – $4.67 per $100
[McHenry High] SCHOOL DIST 156 – $2.41 per $100
[Prairie Grove Grade] SCHOOL DIST 46 – $4.09 per $100
[Riley] SCHOOL DIST 18 – $3.36 per $100
[Richmond-Burton Grade] SCHOOL DIST 2 – $3.24 per $100
[Richmond-Burton High] SCHOOL DIST 157 – $3.12 per $100
[Wauconda Unit] SCHOOL DIST 118 – $6.28 per $100
[Wonder Lake Grade] SCHOOL DIST 36 – $5.92 per $100
[Woodstock Unit] SCHOOL DIST 200 – $6.90 per $100

Municipal Tax Rates

ALGONQUIN VILLAGE – 62 cents per $100
BARRINGTON HILLS VILLAGE – $1.35 per $100
BULL VALLEY VILLAGE – 59 cents per $100
CARY VILLAGE – 54 cents per $100
CRYSTAL LAKE CITY – 30 cents per $100
FOX LAKE VILLAGE – 78 cents per $100
FOX RIVER GROVE VILLAGE – 74 cents per $100
GREENWOOD VILLAGE – 0
HARVARD CITY – %2.21 per $100
HEBRON VILLAGE – 69 cents per $100
HOLIDAY HILLS VILLAGE – 24 cents per $100
HUNTLEY VILLAGE – 54 cents per $100
ISLAND LAKE VILLAGE – 72 cents per $100
LAKE IN THE HILLS VILLAGE – 88 cents per $100
LAKEMOOR VILLAGE – 42 cents per $100
LAKEWOOD VILLAGE – $1.04 per $100
MARENGO CITY – $1.14 per $100
MCCULLOM LAKE VILLAGE – $1.26 per $100
MCHENRY CITY – 74 cents per $100
OAKWOOD HILLS VILLAGE – 49 cents per $100
PORT BARRINGTON VILLAGE – 32 cents per $100
PRAIRIE GROVE VILLAGE – 41 cents per $100
RICHMOND VILLAGE – 96 cents per $100
RINGWOOD VILLAGE – 23 cents per $100
SPRING GROVE VILLAGE – 37 cents per $100
TROUT VALLEY VILLAGE – 0
UNION VILLAGE – 45 cents per $100
WONDER LAKE VILLAGE – 46 cents per $100
WOODSTOCK CITY – $1.87 per $100

Fire Protection District Tax Rates

ALG LITH FIRE DIST – 83 cents per $100
BARRINGTON CTRY FIRE – 37 cents per $100
CARY FIRE DIST – 54 cents per $100
CRYSTAL LAKE FIRE CITY – 68 cents per $100
CRYSTAL LAKE RURAL FIRE – 40 cents per $100
FOX LAKE FIRE VILLAGE – 43 cents per $100
FOX RIVER GRV FIRE – 72 cents per $100
HARVARD FIRE DIST – 36 cents per $100
HEB ALD GRW FIRE – 47 cents per $100
HUNTLEY FIRE DIST – 84 cents per $100
MARENGO FIRE DIST – 28 cents per $100
MARENGO RESC SQUAD – 20 cents per $100
MCHENRY FIRE DIST – 50 cents per $100
NUNDA RURAL FIRE – 66 cents per $100
RICHMOND FIRE DIST – 70 cents per $100
SPRING GROVE FIRE – 61 cents per $100
UNION FIRE DIST – 37 cents per $100
WAUCONDA FIRE DIST – 61 cents per $100
WONDER LAKE FIRE – 46 cents per $100
WOODSTOCK FIRE RESCUE – 76 cents per $100

Library District Tax Rates

ALGONQUIN LIBRARY – 52 cents per $100
BARRINGTON LIBRARY – 20 cents per $100
CARY AREA PUBLIC LIBRARY – 24 cents per $100
CITY CRYSTAL LAKE LIBRARY – 39 cents per $100
FOX LAKE LIBRARY – 38 cents per $100
FOX RIVER GR LIBRARY – 53 cents per $100
HUNTLEY AREA LIBRARY – 24 cents per $100
OHNSBURG LIBRARY – 16 cents per $100
MARENGO-UNION LIBRARY – 18 cents per $100
MCHENRY LIBRARY – 32 cents per $100
[Lakemoor] RIVER EAST PUBLIC LIBRARY – 19 cents per $100
[Richmond] NIPPERSINK LIBRARY – 19 cents per $100
RURAL WOODSTOCK LIBRARY – 10 cents per $100
WAUCONDA AREA LIBRARY – 47 cents per $100

Park District Tax Rates

BARRINGTON HILLS PARK – 3.8 cents per $100
CARY PARK DISTRICT – 76 cents per $100
CRYSTAL LAKE PARK – 46 cents per $100
HUNTLEY PARK DIST – 43 cents per $100
MARENGO PARK DIST – 40 cents per $100

Township Tax Rates

ALDEN TOWNSHIP – 27 cents per $100
ALGONQUIN TOWNSHIP – 7.4 cents per $100
BURTON TOWNSHIP – 9.8 cents per $100
CHEMUNG TOWNSHIP – 17 cents per $100
CORAL TOWNSHIP – 8.7 cents per $100
DORR TOWNSHIP – 13.2 cents per $100
DUNHAM TOWNSHIP – 26 cents per $100
GRAFTON TOWNSHIP – 8.3 cents per $100
GREENWOOD TOWNSHIP – 17 cents per $100
HARTLAND TOWNSHIP – 24 cents per $100
HEBRON TOWNSHIP – 25 cents per $100
MCHENRY TOWNSHIP – 17 cents per $100
NUNDA TOWNSHIP – 100 cents per $100
RICHMOND TOWNSHIP – 13 cents per $100
RILEY TOWNSHIP – 26 cents per $100
SENECA TOWNSHIP – 18 cents per $100

Township Road District Tax Rates

ALDEN TWP RD & BR – 34 cents per $100
ALGONQUIN TWP RD & BR – 16 cents per $100
BURTON TWP RD & BR – 12 cents per $100
CHEMUNG TWP RD & BR – 37 cents per $100
CORAL TWP RD & BR – 22 cents per $100
DORR TWP RD & BR – 24 cents per $100
DUNHAM TWP RD & BR – 56 cents per $100
GRAFTON TWP RD & BR – 5.9 cents per $100
GREENWOOD TWP RD & BR – 41 cents per $100
HARTLAND TWP RD & BR – 35 cents per $100
HEBRON TWP RD & BR – 38 cents per $100
MARENGO TWP RD & BR – 38 cents per $100
MCHENRY TWP RD & BR – 31 cents per $100
NUNDA TWP RD & BR – 30 cents per $100
RICHMOND TWP RD &BR – 24
RILEY TWP RD & BR – 30 per $100
SENECA TWP RD & BR – 28 cents per $100

Sanitary District Tax Rates

LITH SANITARY DIST – 8.3 cents per $100
NORTHERN MORAINE [Sanitary District] – 7.1 cents per $100

Cemetery District Tax Rates

NUNDA TWP CEMETERY – 0.2 cents per $100
RICHMOND CEMETERY – 1 cent per $100

Tax rates for Special Service Areas and Tax Increment Financing Districts are in addition to those shown above.

= = = = =

Other articles about property tax bills being paid in McHenry County in 2013:

• Most Tax Rates for McHenry County’s Upcoming Tax Bills – Up 15% in Algonquin Township Part of Lakewood
• McHenry County Multiplier Increases Assessments 1.0243 for This Year’s Tax Bills, $1 Billion Assessment Loss Sends Tax Rates Soaring
• Property Tax Rates – Comparing This Coming Year’s to Last Year’s
• McHenry County Tax District Honor Role
• The McHenry County Taxman Cometh – Tax Bills on the Internet

This was in the Daily Herald Tuesday:

“DuPage County homeowners can expect to pay more property taxes to school districts and other local governments, even though land values continue to plummet.

“The overall value of land in DuPage decreased last year by 8 percent, to roughly $34.6 billion. At the same time, the average tax rate for the county’s 384 taxing bodies — the other half of the tax equation — increased 11.73 percent.

“As a result, property owners countywide are going to pay an average of 3.73 percent more on their tax bills this year…”

So, why does this happen?

The reason, which I have repeated pointed out, is that during the time since the Property Tax Cap took effect in the early 1990′s, real estate inflation vastly outstripped the Consumer Price Index.

Under the Tax Cap, all tax districts but Home Rule municipalities had their tax rates forced down in order to limit their tax extraction from exceeding the increase in the CPI.

That meant their tax rates were well below the maximums set by state law.

When property values started falling, the tax districts kept asking for more money.

Because they were under their maximum rates, those rates were increased enough to give them the amount they got the year before, plus whatever the Consumer Price Index (the measure of inflation used in the law) had increased.

In DuPage County’s case this past year, tax districts did what most do every year, try to squeeze every dime they can out of property owners’ pockets.

Part 2 of the Chicago Tribune said about Lakewood’s alternative revenue bond purchase of what is not called RedTail Golf Club:

Lakewood is featured as one of the villages

“where bets backfired on taxpayers…where taxpayers should have been protected form tax increases” but weren’t…where “taxpayers instead awoke to hikes they never approved, ones that even exceeded what the law normally allows.”

Lakewood did not make the front page of the story, but the financing of the golf course it bought is referenced on page 10.

The Red Tail Golf Course, financed by alternative revenue bonds not approved by the taxpayers, did not come with a permanent clubhouse. .

“That’s how taxpayers is upscale Lakewood in McHenry County ended up paying for a golf course they were told wouldn’t cost a them a dime.”

Although I was not quoted in the story, I have replayed the interchange between the three residents and the then-village board several times to the current village board members.

There were three of us there.

Former Village Trustee Roger Reid said that he didn’t think it was the role of government to be in the golf club business.

Attorney Jim Bishop asked if board members knew that golf courses all over McHenry County were having financial problems.

I asked, “Is this ever going to cost me a dime?”

I was assured that it would not.

The breaching of that assurance undoubtedly explains my defense of the Property Tax Cap, which prohibited the issuance of bonds without a referendum.  (I lost the fight to keep that prohibition for park districts and you can see the most recent “need” determined by the Crystal Lake Park District at West Beach.)

A sports management company made the projections that the golf course in Lakewood would pay for itself.   The Tribune article explains,

“Some residents remained skeptical, including [former Village Trustee] Roger Reid, who recalls going with a small group to the Village Board meeting to ask for assurance that taxes would not go up because of the deal.

“‘We were assured–up and down and sideways–that, “This is not going to go on you tax bill,”‘ Reid recalled.

“Then residents were hit with the catch in the law:  If projections are off, taxes can go up.

“Turns out, the town’s projections were so far off that the golf course couldn’t even pay a penny toward its loan payment for six years.  And, by the time the bond was paid off two years ago, records show, 53 percent of it was paid off through higher taxes, not the projected golf course profit.”

The Tribune article points out that no state agency verifies financial projections that will be made by firms like Power Wellness, the health club firm McHenry County College hired to justify putting taxpayers on the hook for paying back tens of millions of dollars in projected borrowed money.

Although the Illinois Attorney General has authority to “advocate for taxpayers misled by the deals…the issue has never been raised there.”

No mention is made in this Northwest Herald article of the financial fiasco that occurred in Lakewood because of the use of alternative revenue bonds.  And there is no way to finance the MCC health club without going to referendum without using alternative revenue bonds.

= = = = =

If you into irony, the day after the Tribune article about the abuses of alternative revenue bonds ran, the Northwest Herald ran diminishing the dangers involved in using alternative revenue bonds.

On January 6, 2013, right on the top of the Sunday Chicago Tribune, there was an expose that should send warning flares up about the alternative revenue bonds that the majority of the McHenry County College Board seem set to issue.

The January 6, 2013, article by Joe Mahr and Joseph Ryan about small suburbs like Lakewood having made a decision that backfired on property taxpayers.

Alternative revenue bonds are ones ostensibly to be repaid by identified sources of revenue, for example in MCC’s case, an increase in student fees of $8 per hour, increased tuition from more enrollment and health club fees among other sources…

But, just in case, don’t you know, to be paid by property taxes if the projected revenues from the other non-real estate sources don’t bring in enough money.

The Tribune doesn’t look at junior colleges in its article. As the headline implies, it looks at “Small suburbs [that have] exploit[ed} tax loophole."

The sub-headline on the front page reads,

"Even in places where residents might expect tighter oversight, Illinois borrowing rules let towns sidestep voters, make decisions that can backfire on taxpayers"

McHenry County College taxpayers managed

• not to step in the Briar Patch when the Board wanted to borrow, without asking voters at the ballot box, $25 million to finance a minor league baseball stadium,
• but are facing a similar entangling long-term obligation in current Board members' desired to borrow, without voter approval, $45 million to build a health club and new classrooms (even while only using the classrooms 45% of the time).

Lakewood’s Red Tail Golf Course, purchased with revenue bonds which could not be repaid without forcing real estate taxes up.

The story describes alternative revenue bonds as a

“device that lets towns borrow in a way that sidesteps voters and property tax caps.

• The catch for towns:  They must be able to foresee paying off the loans without raising property taxes.
• The catch for residents:  If towns’ projections are wrong, taxes are automatically hiked to make the loan payments.

= = = = =

More tomorrow.

The man-eating plant in the movie “The Little Shop of Horrors” is only slightly less dangerous than Illinois tax districts at tax levy time.

This is the season that taxpayers should be attending municipal meetings.

It’s when village trustees, city councilmen and aldermen decide how much to raise your taxes next year.

I almost added “if any” to the above sentence, but raising taxes is the nature of the beast called tax district.

“Feed me! Feed me!” one can almost hear the various types of school districts howling.

Just like in the “Little Shop of Horrors.”

Last Tuesday night I attended the Lakewood Village Board meeting.

After the group seeking a public-private partnership to build a new Village Hall left disappointed after Village Board members wanted more assurance that the estimated $3 million to be borrowed (out of about a $4 million total cost), the Board moved onto the tax levy.

Village President Erin Smith laid out three options:

1. “Captur[ing] the tax we are able to tax (that is, taking as much as possible)
2. “a ‘we never get that money back option’
3. “the Woodstock option–defer [the final decision] until we have more information option”

The third option would allow for an abatement of some or all of the tax increase on current taxpayers.

The Property Tax Cap, which Board members referred to by the initials of the statute’s name, PTELL, allows every tax district to pry 3% more out of taxpayers’ collective pockets next spring than this year.

In addition, tax districts are allowed to “capture” new growth.

That is estimated to be 26/100 of 1%.

One can certainly make an argument that tax revenue from newly-built or re-modeled properties, such as those along Route 14 in Crystal Lake, should contribute tax revenues.

If the amount requested next year were the same as this year, the new assessed valuation would actually bring about a tax cut for existing taxpayers.

But the nature of government is to grow, so that rarely happens.

In any event, to get maximum taxes from the new growth, a tax district must basically guess what it will be.  The actual number is not known until after all the assessment appeals have been complete.

Recommended to the Lakewood Board was the third option.

Pass what is called a “balloon” levy now which asks for the 3% increase in the Consumer Price Index, plus the County’s estimate of “new growth” and, then, when the final assessment appeal numbers are in, take another look to see if the Board wants to cut back the amount it is requesting.

Trustee Carl Davis argued, “Go for the maximum PTELL will allow.”

He pointed out that property taxes are not the only source of revenue the Village has, but it is “the only source deductible from Federal income taxes.”

Davis pointed out that vehicle stickers are not deductible and suggested eliminating that $65,000 revenue source instead of cutting property taxes.

Needless to say, I made a pitch from the taxpayers’ point of view.

The Board voted 6-0 to levy the maximum amount of taxes allowed by law with the understanding its members would re-visit the issue once the final assessment numbers are known.

Today’s message is dedicated to those McHenry County Board members and other tax district officials who have or will cast “Yes” votes for any budget which exceeds last year’s extension.

Voting for property tax levies that are greater than last year’s collection run the very real risk of increasing taxes of existing taxpayers. That’s because most tax districts are below their statutory maximum tax rate. Those tax rates were forced down in the over a decade when real estate inflation exceeded the increase in the CPI. The result now is that virtually any tax district can ask for the 3% inflationary increase allowed this coming year and get it. The County Clerk merely increases the tax districts tax rate to make it happen…even with lower assessment levels on people’s homes.

The tee shirt says, “Whatever it is, I didn’t do it!”

That pretty much sums up what tax hiking local officials say when asked if they raised our property tax bills.

Some will remember that the “extension” is the amount of taxes that are collected. (In reality, it is about 99.9% of the taxes collected, but my definition is more than adequate for “government work.”)

All tax districts are allowed by the Property Tax Cap to collect what they had last year, plus the increase in the Cost of Living, defined as the increase in the Consumer Price Index.

That number is 3% for next year’s taxes.

Schools and other tax districts are also allowed to collect money on new construction which was not previously in the tax base.

I have written how I believe that capturing that new growth is perfectly appropriate and that our legislators should change the Real Estate Tax Cap (“PTELL” to the technocrats) so that it could be taxed without running the risk of increasing the tax burden on existing property owners.

To the best of my knowledge no state rep. or senator has taken up that cause.

Because they haven’t, tax district boards err on the side of asking for (levying) too much money.

There’s enough to get all the new growth, but such “balloon” levies are usually high enough to slap existing homeowners and businesses with increased taxes as high as the increase in the CPI as well.

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Filing for non-partisan office, where most of the taxes are levied, is from December 17th to 24th. The County Board members will be elected on November 6th.

And, speaking of the County Board.  I want to believe that the Board will not tax to the max this year, as I read in Kevin Craver’s Northwest Herald article, but unless the Board votes before the election, I remain a skeptic.

You may remember my critique of the County Board’s budget limiting efforts.

My May 30th article was entitled, “County Board Just Can’t Say, ‘No New Taxes.‘”

The guts of the article was this table:

Approximate 20 Year Effects of Not Taking CPI Increase on Future Levies

The right hand column shows what taxpayers would save each year through 2023 if the McHenry County Board doesn’t squeeze taxpayers for all they can get.

The implication I see is that county government would lose almost $60 million over twenty years if it does not take every dime that the Property Tax Cap law allows.

Another way of looking at the data is that taxpayers would save about $60 million if allowed inflationary tax hikes were not taken.

And what are the reasons to want the money?

“…the County Board will allow usage of the CPI to cover only the additional increased costs of

• union/non-union wage adjustments,
• health insurance increases,
• pension increases,
• fuel,
• utilities (electricity, natural gas, water & sewer) and
• all other new costs that have been presented and approved by the County Board (without source of funding stated) since the passage of the fiscal year 2012 budget up to the passage of this budget policy.

I assume most followers of government know that salaries are about 80% of the total cost.

The above list doesn’t leave a lot out, does it?

But, if you want to shrink government, you must limit its growth.

When we were in our first four years (1973-77) in the House of Representatives, Don Totten (R-Schaumburg) revised my view of budgeting.  He convinced me that the only way to keep government from spending money was to limit taxes.

Increasing government by the increase in the CPI doesn’t do that of course.

I have related elsewhere the lesson that by United States Bureau of the Budget Section Chief Sam Lawrence taught me.

I could characterize it as “bottom line budgeting.”

While my responsibility was for the largest independent agency in the Federal government, the Small Business Administration, the lesson I learned was that someone higher that I had decided how much the SBA would get in the next budget year.

“Need” was irrelevant.

It took me three trips to his office down the hall in the Old Executive Office Building next to the White House to learn that lesson.

That’s why I suggested the County Board take the easy way out last year.

Just decide how much you want the budget to go up and tell the county’s budget people to make it happen.

Instead there was a protracted series of Finance Committee meetings which seem to have resulted in pretty much guaranteeing that next year’s county budget will increase by the maximum amount allowed by the Real Estate Tax Cap (PTELL to technocrats).

Since the end of May, I learned in a front page story by Kevin Craver in the Northwest Herald (which now cost money to read so a link seems a waste of time) that the county is planning on increasing its balance from five months’ expenditures to six months.

Can anyone do the math?

That’s going to increase the budget one-twelfth.

Next year the Tax Cap allows an increase of 3%.

Does anyone but I think that means McHenry County government will again tax to the max?

1/12 is bigger than 3%, right?

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Some comments about county balances:

When I was County Treasurer from 1966-1970, the County Board was illegally (see next sentence) accumulating money to build the new courthouse.

Ten percent of the taxes were paid under protest and the county regularly lost in court.  It took a while, but the refunds were court-ordered and paid every year.

But the County Board got 90% of the illegal levies and really didn’t care about the lost 10%.

Better to tax illegally than lose a referendum to finance a new courthouse.  (Maybe someone older than I can tell us if a referendum had already been lost.)

I went to the Finance Committee meeting in the fall of 1967 with an estimate of how much would be in the bank at the end of November (the County budget year began on December 1st then, as it does now).

The former County Board Chairman Harley Mackeben, elected Auditor in 1964, barely beating my father, disagreed.

I think my calculations were that there would be $6 million in the bank.

The Committee put in a zero beginning balance–what Mackeben recommended.

My memory is that the beginning balance was even higher than I estimated–$6.7 million.

But the real question today is how much money is needed in reserve.

Income and sales taxes come in every month.  (There was no income tax until 1969.)  The main irregular income comes from property taxes.

I believe I came up with four months as what was needed.