McHenry County Blog

Jim Bishop notes that appeals for townships other than Algonquin would be too late.

Real estate assessments will be published in the Northwest Herald Wednesday.

I don’t know what the news stand price is, but the price for the insert is $2.50 after Wednesday, as I understand it.

There’s about a month in which one may appeal one’s assessment.

Assessment appeal times for all but Algonquin Township property owners has expired.

Daily SouthtownStar column by Phil Kadner about Jack Franks' bill to freeze the amount of real estate taxes that schools and other tax districts can get in a declining real estate marker.

It was the late 1960′s or early 1970′s when I heard or read State Rep. CL McCormick of Vienna coin the word “taxeater.”

I think it was when WBBM was running an evening Illinois House session live.

I admit to being enamored with what I heard. I’m sure it inspired me to run for state representative in 1972.

In any event, the word “taxeater” was so descriptive that it entered my vocabulary.

Even though it has applied to me most of my working life.

And still does, since I receive a generous legislative pension.

I wonder if you are ready to adopt the description of those supporters of tax hikes I first heard from St. Rep. CL McCormick (Paul Powell’s Republican colleague in the old 3-member districts)?

He called them “taxeaters.”

Of course, as a public pensioner and an ex-st rep., I was, too.

But “taxeater” or “taxeater’s friend” certainly fits our local government officials.

They successfully lobbyed Illinois House members to kill Franks’ House Bill 3793.  (34-73-5 vote roll call here.)

State Rep. Jack Franks’ bill to freeze property tax extensions has proven local tax district officials are
“taxeaters” without a shadow of a doubt.

And perhaps most of our state legislators began as local officials.

SouthtownStar columnist Phil Kadner doesn’t use the term “taxeater,” but his piece on Franks’ bill has lots of sparks.

How about a short course in what Franks has proposed.

The key is to the property tax system is the extension.

Not the assessment.

Not the tax rate.

What’s important is the amount of taxes the County Clerk tells the County Treasurer to collect.  (Your share of the total assessment tells your share of that total.)

I’ll bet no one can find one tax district whose levy for this coming year is not at least as much more than last year’s extension, plus the increase allowed by the Real Estate Tax Cap law, that is, last year’s extension, plus the CPI.

Inflationary increases allowed by the Tax Cap bill since the bill took effect. Click to enlarge.

The inflationary increase allowed this year is 1.5%.

There will be a very, very short list of local governments who don’t grab for everything they can get.

Because real estate inflation greatly exceeded the increase in the CPI over the years since the Tax Cap took effect, tax rates were forced down.

(Remember all the self-laudatory press releases about how this district or that district lowered its tax rate? Meaningless, of course, since the taxes extended were what really mattered, and they kept going up, but a lot of reporters accepted the claims as being newsworthy.)

That means most, if not all, non-Home Rule tax districts have rates below their statutory minimum.

And, that, in turn, means when a tax district asks for last year’s tax extension (that is, pretty much the amount it received), plus the CPI increase allowed by PTELL (the name the technocrats give the Property Tax Cap), the County Clerk will just raise its rates to give the school or other tax district the extra money requested.

It matters not at all that assessments have decreased.

A bit complicated, but freezing the extension was what Jack’s bill was all about.

And, he has the right target.

The ignorant in the General Assembly claimed that the change would impede tax growth when the market turns around.

That is nonsense, of course.

When the real estate prices start climbing, taxes will be allowed to increase by as much as the Consumer Price Index goes up.

Related to this discussion is my advice to McHenry County Board members.  The Board seems poised to hike its taxes next year to the maximum amount allowed by law.

This article is about what Board members (and any other tax district officials who are really on the taxpayers’ side) could do to keep taxes pretty much constant:

No Financial Diet for McHenry County Next Year + The Tax Levy Game

Those that don’t deserve to be called “taxeaters” because their demonstrated goal will have been show to maximum the amount of money that can be extracted from homeowners’ pockets.

They are following the advice of Louis XIV’s Exchequer:

“The art of taxation is like plucking a goose: to get the most feathers with the least amount of hissing.”

Not the original “taxeater,” but certainly a role model.

= = = = =

Some have suggested that Franks was just searching for headlines by promoting the bill.  I lean in that direction.

A lot of his colleagues apparently believe the same thing.  Consider this from the Daily Herald story on the bill’s defeat:

“Franks was ribbed by other lawmakers who accused him of grandstanding over the issue.

“’It was almost like a press conference you were holding,’ said Rep. Roger Eddy, a Republican from downstate Hutsonville.”

State Rep. Roger Eddy is a double-dipping taxeater. Not only is he a state representative. In his day job, he is a school superintendent.

Real estate tax burdens were the topic of State Rep. candidate Dave McSweeney’s third direct mail piece.

Here's the address side of David McSweeney's third mailing. "Enough is Enough."

This is the back of Dave McSweeney's property tax mailing.

The text reads,

It’s a sign of the times…
Property taxes skyrocketing, even as home values go down.
Illinois workers searching for jobs in a poor economy.

Families struggling to make ends meet, hit with a 67% tax hike.

In fact, Cook, Kane, Lake and McHenry counties are all ranked in the top 100 across the nation for
the highest property taxes.

David McSweeney will fight to secure real property tax relief for Illinois’ homeowners.
McSweeney supports plans to freeze property taxes when home values go down and put voters in charge.

As our State Representative, McSweeney will lead the fight to protect homeowners by supporting
HB3793, prohibiting taxing bodies from increasing property tax levies, when property
assessments decrease.

State Rep. Roger Eddy. Photo credit States News Service.

No doubt which side of the taxpayer Downstate Republican State Representative Roger Eddy is on.

It’s not the taxpayers’.

This is the legislator who wanted to loosen the Real Estate Tax Cap in the early 2000′s in order to allow local governments, including the one for which he serves as School Superintendent, to pry more money out of citizens’ pockets.

As I remember the bill, Eddy wanted to tie the rate of increase not to the Consumer Price Index, but to an index that pretty much measured public employee salaries.

That would, of course, set up circular process whereby high teacher salaries would have triggered the ability of schools and other local governments to get more taxes than would be allowed under the CPI.

That was the case in four out of five years I looked at back then.

Well, now double-dipper Eddy has filed a couple of requests for notes that will slow down the consideration of House Bill 3793, as you can see below:

Requests for notes like this are usually an attempt to slow down the legislative process.

“We want more!”

might be the motto of the McHenry County Council of Governments, a taxpayer-supported local meeting ground of local officials, elected and appointed.

The McCOG group’s Executive Director has sent out the following email in opposition to State Rep. Jack Frank’s House Bill 3793:

Good Afternoon-

The MCCG is strongly opposed to HB3793. This bill, if passed, would provide that if the total EAV of taxable property in a taxing district for the current levy year is less than the total equalized assessed value of all taxable property in the taxing district for the previous levy year, then the extension limitation is 0%. A taxing district could impose a rate increase only after that increase is approved by voters via referendum (instead of the lesser of 5% or the percentage increase in the Consumer Price Index during the 12-month calendar year preceding the levy year).

This bill will be heard in the House Revenue and Finance Committee Tuesday October 25th at 2:30 pm.

Although Rep. Franks and many of the bills co-sponsors have discussed this bill with several of our Mayors, Managers and County officials and are well aware of our opposition to this bill, it is important to continue advocating against this legislation- especially since it is now being heard in committee.

New this year, we have the ability to submit “witness slips” on bills being heard in House committees on-line. Before hearing testimony, the committee is read all of the witness slips filed on a bill and I encourage you to file a slip in opposition to this bill via this new on-line communications tool.

The process is easy to use:

1. click on the link below, which directs you to the home page of the Illinois House of Representatives Witness Slips database
2. click on “hearings”
3. select “Revenue and Finance Committee Tuesday October 25, 2011 at 2:30 pm”
4. click “create slip”
5. complete information- in the case of HB3793 click the “opponent” button and “record of appearance only”
6. finally, click “create slip”Witness Slip Website

You can also contact Rep. Gaffney, who represents part of McHenry Co. and serves on the Revenue and Finance Committee. His e-mail address is repgaffney@gmail.com.

Best regards-

Anna

Your tax dollars at work.

Not on your behalf, but on the behalf of those who govern you.

Not only are townships and municipalities using taxpayer dollars to lobby against the interests of their taxpayers, so are school boards.

And they are all paying for their lobbying with taxpayer-financed dues.

Read what is posted on the Illinois Association of School Boards’ web site:

ACTION NEEDED ON PTELL LEGISLATION

The House Revenue and Finance Committee approved a bill that will significantly limit a school district’s access to local property tax revenues. For school districts in those counties that are under the Property Tax Extension Limitation Law (PTELL), commonly referred to as property tax caps, HB 3793 (Franks, D-Woodstock) would limit taxing districts to zero growth if property values are declining overall. Specifically, it p rovides that, if the total equalized assessed value (EAV) of all taxable property in the taxing district for the current levy year is less than the total EAV of all taxable property in the taxing district for the previous levy year, then the extension limitation is (a) 0% or (b) the rate of increase approved by voters.

The bill was approved on a 6-1-1 vote in the committee and was sent to the full House of Representatives for consideration. A vote will likely be taken on the bill today (Wednesday) or Thursday.

School administrators and board members are urged to call their State Representative and ask for a “no” vote on HB 3793.

The bill will directly affect school districts in property tax-capped counties by not allowing for any increase in the property tax extension, ignoring escalating budget factors that are beyond the control of the school district such as insurance programs (property, liability, unemployment, workers’ compensation), employee benefits, fuel supplies, food for lunch program, etc.

Indirectly, every school district in the state could be affected as access to local revenues is taken into account in the school funding formula. The “double whammy” provision, which provides additional state money to school districts under property tax caps that cannot access the full amount of local property valuation, could increase dramatically if HB 3793 is enacted. Shifting additional resources to fund the “double whammy” provision will further shortchange the state aid formula which provides the majority of funding for most school districts as well as funding for mandated categorical grants. State aid and categorical funding is already being prorated for the current fiscal year.

Not only the Township Officials of Illinois, but the more powerful Illinois Municipal League has lined up against State Rep. Jack Franks’ bill to keep property taxes constant in years when real estate assessments are declining.

Under the way that the 1991 Property Tax Cap works, local schools and other tax districts are allowed to obtain the real estate taxes they extracted last year, plus the increase in the cost-of-living, as defined by the Consumer Price Index.

Since property values consistently exceeded the CPI until the late 2000′s, County Clerks had to cut tax rates in order to make certain that tax districts did not get more than the law (acronym: PTELL) allowed.

That drove tax rates down well below their statutory maximum.

Once assessments grew less that the CPI, with tax districts still asking for what they got last year, plus the inflationary increase, County Clerks complied by hiking their tax rates, which were still under the maximum limit.

Back to the Illinois Municipal League. Here’s what’s on the front page of the organization’s web site:

House Revenue Committee Votes to Take Taxing Power Away from Communities

On October 25, 2011, the House Revenue and Finance Committee voted to adopt House Amendment No. 1 to HB 3793 (Representative Franks, D-Harvard) This legislation amends the Property Tax Extension Limitation Law (PTELL) to provide that the capped property taxes may not be adjusted for inflation if the total equalized assessed value of all taxable property declines from the previous year.

If this legislation were to pass, it would be an explicit acknowledgment by the General Assembly that local government should not be allowed to raise enough revenue to cover any increase in the cost of providing service. The bill would limit revenue collections without limiting the costs of salaries, pensions, fuel, and other goods and materials necessary to provide public services.

Please contact your Representatives at their Springfield offices and ask them to OPPOSE HB 3793.

As with the Township Officials of Illinois, the Illinois Municipal League lobbying is financed by your tax dollars.

The lobbying arm of Illinois Township Officials is urging local members to call their legislators to ask them to oppose two bills.

One takes money from a state subsidy that should have been phased out decades ago. It looks like an income tax to business. Actually, it is an income tax, but it was levied when the hated Personal Property Tax was lifted from business in order to replace the lost local tax.

I wish I had been in office so I could have tried to keep the total amount replaced from increasing. It should have been a tax whose negative impact on business would have decreased over time as the rate needed to raise the lost local tax revenue would have gone down.

In any event, the Township Officials of Illinois object to diverting part of that replacement tax to pay the salaries of Regional Superintendents of Schools.

The lobbying group also opposes Jack Franks’ bill to prevent increasing local governments’ tax take when property values and, hence, real estate assessments are going down.

Here is the email of lobbyist Bryan E. Smith, Executive Director of TOI:

• House Bill 3828 was introduced and would divert money from the Corporate Personal Property Replacement Tax Fund to pay the salaries and benefits of Regional School Superintendents. TOI is OPPOSED to a diversion like this that would take money away from local governments, including townships and road districts. Late yesterday the bill was called in the House Revenue and Finance Committee and was passed out on a strictly party-line vote despite the opposition of virtually all local government groups. WE NEED YOUR HELP NOW! We need to have everyone call their State Representative(s) NOW and ask them to vote NO on House Bill 3828 when it is called for a vote in the House. It is time the State stop diverting money that is designated for local governments.
• Another bill we have been closely following is House Bill 3793. This bill amends the Property Tax Extension Limitation Law (PTELL) to prevent a taxing district (Townships and Road Districts included) from capturing the CPI increase for its extension limitation if the district’s total EAV is less than the previous levy year. TOI OPPOSES this bill because it would reduce available property tax revenues for Townships and Road Districts. PTELL (Tax Caps) already limits (in those counties that have tax caps) the ability of Townships/Road Districts to capture all available growth during good economic times. It would be very unfair to also prevent a township/road district from capturing minimal cost-of-living increases that are available.

Naturally, tax dollars finance the Township Officials of Illinois.

Don’t you wish you could get tax dollars to finance your lobbying of the state legislature?

Jack Franks

A Jack Franks’ bill that would prevent most local governments from getting more money in year two than they did in year one if real estate assessments are declining flew out of the House Revenue Committee 6-1 Tuesday.

There is a caveat in the legislation.

Voters could approve a higher percentage increase by referendum.

This is bill that will be fought tooth and nail by all non-Home Rule units.

Home Rule units are those municipalities with over 25,000 people, plus those, like Barrington Hills, where local voters have approved the Home Rule status by referendum. Cook County is also a Home Rule unit.

Home Rule units have no taxing limits.

All the other tax district, schools, parks, counties, small villages and cities, townships, etc., would have their tax take capped under this proposal

The bill has been placed on “Short Debate,” which means only two people may speak on each side of the issue.

You can safely assume that more will want to talk.

Proponents to make points for the taxpaying public and those who view their role as primarily protecting the self-interest of schools and other tax districts to defend them.

My guess is that the bill will not clear both houses of the Illinois General Assembly.

And, if it does, who knows what this on-again, off-again progressive government will do. He owes an awful lot to public employee–including teachers’–unions and less money from taxpayers potentially means less money for them.

With State Rep. Jack Franks about to get lots of publicity about keeping real estate tax bills down, it’s worth looking at the underlying problem.

This is the third or fourth article I have written on the subject.  It’s a complex topic, so worth repeating.

After the Tax Cap (PTELL to insiders) was passed, real estate inflation exceeded the increase in the Consumer Price Index.

I remember the year before the law took effect in 1993, Crystal Lake High School District 155 took the entire 17% hike in property value out of our pockets. The CPI increase, of course, was much lower.

After the the Property Tax Cap took effect, the County Clerk’s Office had to impose limits on the increase in the

(Home Rule cities, those over 25,000 automatically, e.g., Crystal Lake, Algonquin, Lake in the Hills, and those where citizens have approved Home Rule status in a referendum, e.g., Barrington Hills, can get as much money as their elected officials want. Indeed the main reason that cities like Woodstock and Huntley will have a special census as soon as they think they have crossed the 25,000 person level will in order to get revenue not otherwise available. See most recent U.S. Census results for McHenry County municipalities here. Woodstock is 270 people short of the magic number of 25,000; Huntley – 707.)

Bill Vaselopulos, the long-time and quite knowledgeable tax rate guy for the Cook County Clerk, was quoted in an article about a little over a week ago about how the system works.

Reporter Lisa Donovan summarized Vaselopulos’ explanation well:

“This year, a drop in assessed values of homes, along with a drop in the state equalizer, drove the tax rates up in most parts of the county to meet the demands of the taxing districts.”

Note how she uses the word “demands” to describe what tax district officials do.

I mention this because it is so rare that reporters present tax information from a taxpayers’ point of view.

Reporters would usually use the word “request,” not “demand.”

School board, special district and municipal officials are not forced to ask for more money.

They could ask for the same amount they are getting in the current year.

But, I don’t know of any tax district under the tax cap whose elected officials did not try to capture the maximum amount of money allowed under the tax cap, in other words, the entire 2.7% increase in the CPI allowed by law.

McHenry County property owners have already paid that increase…assuming they had enough money set aside to pay on time.

Next year, greedy tax districts will only be able to extract 1.7% out of homeowners’ pockets. (For a history of CPI’s since the Tax Cap took effect, click here.)

That, of course, means tax bills will go up next year.