McHenry County Blog

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.

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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

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.

An astute political observer noted that Republican Precinct Committee have more power being thrust in their hands at Saturday’s 9 AM meeting of the GOP Central Committee than they have ever had before.

Indeed, in times past, Precinct Committee have been asked to and have endorsed candidates for statewide public office, but the endorsements, but those endorsements had as much influence as all the elected officials who individually endorsed appointed State Rep. Kent Gaffney in the spring primary election.

Leslie Schermerhorn

There have been times when Central Committee members have nominated fall candidates for McHenry County Regional Superintendent of Schools.

This happened with Leslie Schermerhorn last month.

But she was the only candidate who met the qualifications.

I remember its happening once before with the same office.

There were actually two qualified candidates desiring the nomination, but the Establishment candidate easily won.

Jack Franks

Tonya Franklin

Saturday, Precinct Committeemen will have the chance to select two “63rd District Representative Committeemen,” who, if the Committeemen who called the meeting have their way, will then nominate Tonya Franklin to run for State Representative against “Chainsaw Jack” Franks, a Democrat who has had no GOP opposition for two out of the last three elections.

Getting the nomination, however, is not enough to get Franklin on the ballot.

She and supporters will have to get 500 “good” signatures in less than two days, because the signatures and other paperwork have to be delivered in Springfield by Monday afternoon.

So, it’s a long shot, but, if she doesn’t succeed, McHenry County Republican Party Chairman Bill LeFew in 2006 and Mike Tryon in 2008 and 2012 will have managed to leave the office vacant on the ballot three out of four election cycles.

No candidate recruited.  (In 2010, McHenry Grade School and Library Board member John O’Neill pretty much decided to run on his own.  There wasn’t an overwhelming amount of support for his candidacy.)

There could just be another empowering meeting for GOP Committeemen this summer.

Sheriff Keith Nygren could still decide to retire.

If he does so by some day I can’t remember in July, the Central Committee would be tasked with slating a candidate in the fall election.

See

Backdooring Nygren’s Replacement – Part 3

Under the heading of

“Why your tax bills went up,”

in Kevin Craver’s article on the issuance of Property Tax bills is a misstatement from the McHenry County Supervisor of Assessments.

The Northwest Herald story says Robert Ross indicated,

“The answer is a simple one – mainly because of the tax cap, and to a lesser extent the record number of people who challenged their assessments.”

That indirect quote, if accurate, is completely wrong as far as implicating the Tax Cap for tax increases.  It is true if you are one who did not appeal your real estate assessment last year.  The latter shifts the tax burden from those who receive assessment cuts to those who don’t.

Tax increases are caused by elected (and appointed) tax district officials (mainly school board members) asking for more money.

Over the first approximately fifteen years of the life of the Real Estate Tax cap law, assessments were shooting up much more than the increase in the rate of inflation.

I remember the year before the Tax Cap went into effect in the early 1990′s real estate inflation was huge.

Crystal Lake High School District 155′s Board took the entire 17% increase. In other words, the last year before the law, the largest high school district in McHenry County raised taxes 17%.

Talk about taxing to the max.

In subsequent years tax districts were not allowed to increase their tax requests by more than in the increase in the Cost of Living, even if their assessments increased by a tremendous percentage.

"Balloon levying" wrings every tax dollar possible out of property taxpayers.

There was an exception and that was for new construction.

In order to make certain they got every last dime, tax district “ballooned levied,” that is, asked for far, far more than knew they could get so they would not leave the new construction tax crumbs (really more than crumbs until real estate values collapsed) on the table.

When property inflation was higher than the cost of living’s increase, the tax rate was forced down.  That was done as the County Clerk’s Office applied the Tax Cap law.

Remember all those press releases from local school boards and municipalities about how good they had been to taxpayers because they lowered their tax rates?

Well, it was claiming credit for something the County Clerk did automatically in order to limit the total taxes that could be pulled out of taxpayers’ pockets.

If assessments went up more than inflation, the tax rate had to be adjusted downward to comply with the collection limit imposed by the Tax Cap, that is, last year’s collection, plus whatever the increase was in the Consumer Price Index, plus new growth.

The result is that most, if not all, local tax districts are beneath the tax rate they are allowed to charge under state law.

So, if assessed valued decreases, the County Clerk must raise the districts’ tax rates if they as for more money.

If they do what the majority on the McHenry County Board did

(See “Remembering the County Board Members Who Voted to Maximize Our Tax Increases,”)

the district still balloon levies in order to grab all the new construction assessed valuation.

And, if it takes a higher tax rate, that’s what taxpayers see.

The electronic sign outside of the McHenry County Treasurer's Office says, "First Installment Due."

Ross tells it as it is in this sentence in the same article:

“When you have tax levies going up and assessments down, there’s only one way the rates can go.”

And that’s what will continue to happen until tax districts start bumping up against their statutory limits.

While I have not done an analysis of which tax districts increased or decreased (some did, e.g., my Village of Lakewood, where the pre-Tax Cap, non-referendum Golf Course Bonds were paid off last year, cutting real estate taxes a big chunk) you can read what happened to various categories of tax districts in the article linked below:

Municipalities Cut Tax Take! Fire Protection Districts Cut Even More! Libraries, Sanitary Districts Flat

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If you would like a chuckle, please read Kevin Craver’s rant about how his wife, cats and he could cover all the tax districts to which they pay taxes.

"Too bad you taxpayers didn't engage my services to fight the property tax increase by the McHenry County Board," says Keely Cat. "I beat them on the McHenry County Republican Cat Tax, so you know I have the right skill set."

With tax bills having arrived, it seems appropriate to call attention again to those McHenry County Board members who recommended to tax us to the max:

Who Voted to Raise Your County Taxes?

The Board members voted “balloon” levy, that is, they asked for more than they knew they could ever get to make sure they captured the full 1.5% increase allowed under the Real Estate Tax Cap law.

Plus all the new construction in the County.

I noted that the McHenry County Board’s tax take was 1.85% higher than last year and asked County Administrator Peter Austin why.

Here is his answer:

“Three main reasons:

1. New Growth of $31,668,547 – Not capped in first year
2. State of Illinois assigned a .017700 multiplier
3. Valuations continue to decline, causing tax rates to artificially increase to maintain parity with tax revenues from the prior year.

“This is not unique to only the County’s rate. This is happening across all taxing bodies within the County also.

“I would recommend to any person questioning the “why” to view the County Clerk’s web site where all of the calculation formulas are displayed.”

The County and bunches of other tax districts have been pushed under the statutory maximum tax rate by the Property Tax Cap.

Because there is no meaningful rate limit, when tax districts ask for more money, as long as the figure in state law is with the inflationary increase allowed by the Tax Cap (which the technicians call PTELL), rates increase to make up for decreases in assessed valuation.

An email from the Township Officials of Illinois asking help in killing a bill in the Senate Revenue Committee similar to the one State Rep. Jack Franks got passed the House, but was deep-sixed by the Senate sponsor (Terry Link) to whose bill it was attached.

It should be noted that those who voted for the Franks’ bill in the House knew it would be killed in the Senate.

State Senator Martin Sandoval’s bill is pretty much the same idea–no increase in tax dollars if assessed valuation decreases.

Here’s the email from Bryan E. Smith, Executive Director:

Senate Bill 2862 will be heard by the Senate Revenue Committee next Wednesday, May 2.

This bill will further hinder townships and road districts in tax-capped counties in their ability to generate revenue.

Under Senate Bill 2862, local governments (including townships and road districts) for which the total taxable Equalized

Assessed Valuation (EAV) is less than the previous year would be restricted to a 0% increase in the districts extension, or

the rate approved by voters.  Local governments in tax-capped counties are already limited in their ability to increase local revenues by the amount of the Consumer Price Index (CPI) or 5%, whichever is less.

This bill would have a very negative impact on townships and road districts in tax-capped counties.  Please contact your State Senator before next Wednesday by phone 217.782.2000 State Operator, and ask them to oppose Senate Bill 2862.

Thank you for your help with this urgent legislative matter.

A press release from Cliff Surges, who is running against Karen McConnaughay:

REPUBLICAN CLIFF SURGES ANNOUNCES SUPPORT FOR PROPERTY TAX FREEZE LEGISLATION WHILE McCONNAUGHAY’S WEAK ATTACK ON SURGES MISSES THE MARK

“Property Tax Freeze is what is important,” says Surges, “not the payment decisions of Kane County citizens.”

“What a politician does with public money is much more important than what a private citizen does with personal funds, 33rd District Republican Senate candidate Cliff Surges said today.”

“Karen McConnaughay’s poll numbers must be plummeting because she is launching a vicious personal attack against me and my family,” Surges continued.

Cliff Surges

The issue of paying property taxes in one installment instead of two has already been
asked and answered in this campaign. The Surges family does not owe any late taxes or fees and is completely up to date.

“What is really on the minds of the people I speak to in the district is, “Why do our property taxes continue to rise while our home values continue to fall?” Freezing or lowering property taxes is what is important,” says Surges.”

Surges announces today his support for two bills in the State Senate, SB 2073 and SB2862, both of which would freeze property tax bills if property values remain flat or decline.

The two bills would freeze property tax levies for local taxing districts if the total equalized assessed valuation for the unit or district was lower than the preceding year. Taxing districts would be required to hold a referendum to raise their levies.

“Instead of trying to manufacture a controversy around private decisions by taxpayers, Mrs. McConnaughay might want to consider ways to lower or freeze taxes for the people of this district and get out of control government spending stopped,” says Surges.

Last August Democrat Jack Franks raised expectations on the sign outside of his Route 47 Woodstock office. The message was "JACK PASSED LAW TO HELP LOWER PROPERTY TAXES." This couldn't have related to the Property Tax idea, because it was defeated during the later Fall Veto Session. Anyone have any idea what he was talking about during McHenry County Fair time?

• article about the motivation for Democrat Jack Franks’ Real Estate Tax Cap bill and
• the one about his Senate sponsor’s outright rejection of the idea and
• the posting of the email from Crystal Lake Grade School District 47 bemoaning the House passage of Senate Bill 2073

must have caught the attention of someone at the paper of record in McHenry County.

There were three paragraphs in the article resulting from the interview with Brett Rowlan:

“One local political observer dismissed Franks’ bill as being just for show.

“’It’s a [media] headline bill,’ said Cal Skinner, a former state legislator and local blogger. ‘It has no chance of passage.’

“He suggested it might be an election year stunt by Democrats to distract voters from last year’s income tax increase. Nonetheless, Skinner said the bill ‘certainly catches the mood of the taxpayers.’”

My little part made the first page of the internet edition, but not on the print edition, where the story was top right on the page.

But there was no link to McHenry County Blog.

Yesterday, McHenry County Blog noted that State Rep. Jack Franks’ bill was “headline” bill, that is one, that was put up to garner local press, but never intended to be enacted.

In fact, I quoted a state legislator close to the Illinois Municipal League to the effect that the bill was going nowhere.

Now the proof.

The Ilnois Municipal League logo. The motto is "Educate, Advocate, Empower."

Look what is on the Illinois Municipal League’s web site:

Senator Link Message on Property Tax Legislation

By Joe McCoy, Legislative Director, IML

State Senator Terry Link has asked the IML to make our membership aware that he has no intention of advancing a PTELL provision opposed by communities across the state. SB 2073, as amended in the House, proposes to prevent non-home rule local governments from capturing inflationary increases through the property tax if the overall assessed valuation within the local government jurisdiction has declined from that of the prior year. Senator Link’s statement is below.

The IML would like to thank Senator Link for his opposition to the House amendment.

Terry Link

Dear friend,

When I introduced Senate Bill 2073, the original intent of the bill was to require the Property Tax Appeal Board to issue a decision within one year from the date the appeal was received.

However, once the bill passed over to the House, Representative Jack Franks signed on as the chief sponsor.

He then amended the measure with house amendment 6, a hostile amendment which essentially limits local municipalities’ authority to levy a tax based on the needs of the community and student population, removing local control.

I am sending this letter to inform you I DO NOT SUPPORT Representative Frank’s amendment.

I will hold this measure in the Senate and make sure it never comes to a vote.

I share your concerns and appreciate your interest in the matter.

The measure is dead on arrival.

You should know that there is another bill in the General Assembly that is similar to Senate Bill 2073.

I recently learned of Senate Bill 2862, which is similar to the amendment Representative Franks placed on my legislation.

If you have any questions or concerns, please feel free to reach out to my Springfield office.

Sincerely,

Terry Link
State Senator, 30th Legislative District

In the past there has been tension between Link and Franks.

The Sun-Times announced the passage of Jack Franks' Tax Cap bill.

The Chicago Sun-Times is reporting that State Rep. Jack Franks (D-Marengo) has reversed the House defeat of his bill to prevent local tax districts from raising the tax take when assessed valuation is not growing…regardless of the increase in the Consumer Price Index.

Only voter approval could overcome the mew tax cap rule

While last time around he only got 34 votes, this time the bill garnered 74 votes.

Locally, the taxpayer-financed McHenry County Council for Governments sent the following email of opposition Monday night:

Good Evening,

Attached is a letter we have drafted to Rep. Bradley, requesting his “No” vote on Representative Franks’ PTELL bill. This same letter will be amended to be addressed to all members of the House Revenue and Finance Committee.

We request your consideration of including member Mayor’s, President’s, County Board Chairman Koehler and Township Supervisor’s signature on this letter. If you agree, please e-mail an electronic version of your signature to me at your earliest convenience.

As of this evening, Rep. Franks’ bill HB4608 is still in the House Rules Committee. However, there is a good chance it could be assigned to the Revenue and Finance Committee this week or early next week. Therefore, we request that you provide your signature, if you wish to include it, as soon as possible.

I will be in Springfield this week and will provide updates as they occur. In the meantime, please do not hesitate to contact me if you have any questions or need more information.

Best regards,

Anna

The bill that passed was Senate Bill 2073.

If you like to express your opinion about tax dollars being used to lobby against the best interest of taxpayers, here are some email addresses that might be useful:

amoeller@mchenrycountycog.org
To: a.osten@foxrivergrove.org; williamganek@algonquin.org; robby723@comcast.net; bsager@woodstockil.gov; peterson@village.lakewood.il.us; cblack@ci.mchenry.il.us; csass@huntley.il.us; cpeters@johnsburg.org; djohnson@huntley.il.us; d.brouder@foxrivergrove.org; edh@rdthiel.com; eplaza@woodstocklawpros.com; erin.smith.lakewood@gmail.com; kbeatty37@gmail.com; gmayerhofer@crystallake.org; gsagona@lith.org; Mayor@cityofharvard.org; jattermeier@villageofhebron.org; glindagood68@aol.com; johnschmitt@algonquin.org; jblakemore@cityofmarengo.com; jolson@springgrovevillage.com; mgeraghty@ci.mchenry.il.us; meisenberg@springgrovevillage.com; nsujet@lith.org; nelson@cityofharvard.org; mack5207@mchsi.com; rmcmahon@huntley.il.us; troutmayor@aol.com; rparr80069@aol.com; sduda@prairiegrove.org; suelow@mc.net; mccullomlake@comcast.net; tclifton@woodstockil.gov; toddweihofen@yahoo.com; supervisor@mchenrytownship.com; lindamooregt@hotmail.com; algtwsp@mc.net; pbaustin@co.mchenry.il.us

There will be, of course, a bitter fight between the tax eaters and the taxpayers in the Illinois Senate.

Below is the House Roll Call:

Click to enlarge this House Roll Call of Senate Bill 2073, now a Tax Cap bill.

From the roll call you can get an idea of where the first priorities of these legislators are.