McHenry County Blog

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.

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.

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.

Real estate tax bills being sent out in McHenry County this year will total $783,689,437.41 this spring.

That compares with $773,325,977.50 a year ago.

That’s an increase of 1.34%, which those with good memories will recall is less than the 1.5% allowed by the state’s Property Tax Cap.

McHenry County

McHenry County government’s tax bill–just under 10% of the total tax bill –will be $78,285,064.42.  That’s compared to $76,846,500.12 last year, up 1.87%.  The County Board, you may remember, voted to take every dime possible under the Real Estate Tax Cap.

Education

The Big Daddy in the Property Tax Game is always education.

Including junior colleges, elementary and high schools, that category consumes almost two-thirds (66.4%) of our tax bills.

$520,283,124.49 this year; $511,040,206.22 last year.

That’s almost a 1.8% increase.  The Tax Cap does not cover bond payments, so my guess is that some districts back-ended bond payments to keep taxes lower in past years.

Junior Colleges

Looking at the junior colleges separately, we see that the total tax bill is $31,323,344.25 this year, while it was $30,347,809.74 last year.

That’s a 3.2% hike.

Since the junior colleges are getting so much higher a percentage the the education group as a whole, it would probably be interesting to see what the unit, grade and high school districts are getting in comparison.

Unit Districts

This year the unit districts will pull in $202,025,310.67, compared to $199,937,737.99 last year.

The difference?

A bit over 1%.

Elementary Schools

Grade school districts are charging $174,244,829.51 in 2012.  Last year’s bill was $171,086,182.51.

Doing the division yields a hike of over 1.8%.

High Schools

The last component of the educational tax bill is high schools.

$112,689,640.06 is the bill this year, compared to $109,668,475.98 this year.

Up 2.7%.

So, with the exception of the K-12 unit districts, which generally have lower tax rate limits, it appears the higher one goes in the grade level, the deeper the educators dig into our wallets:

• Unit Districts – +1%
• Grade Schools – +1.8%
• High Schools – +2.7%
• Jr. Colleges – +3.2%

McHenry County College covers most of McHenry County with the exception of District 300 School District, which is in the Elgin Community College District.  Small parts of McHenry County in the Barrington School District are in the Harper College District and a bit in the Wauconda School District goes to the College of Lake County.

Cities and Villages

Municipalities are next in the order of those pecking at our pocketbooks.

$66,644,908.46 being billed this year, compared to $66,885,115.04.

To their credit, cities and villages actually are taking less money out of our checking accounts for real estate taxes–about 4/10 of one percent–than last year!

That’s worth a headline, don’t you think?

Fire Protection Districts

Let’s look at Fire Protection Districts.

$40,598,421.16 this year, $41,448,795.39 last year.

No one looks at how Fire Protection Districts are governed or what they spend, yet, so far, this category of tax district has been parsimonious with our tax dollars.

It should be noted that some municipalities have their own fire departments, e’g., Crystal Lake, so the $40 million, plus, does not comprise the whole cost of fire protection.

The FPD’s are taking over 2% less this year than they did last year.

Townships

Townships will take $25,770,362.84 this year, less than the $25,577,572.45 last year.

That’s an increase for the governmental form taking the most heat in the metropolitan media of $193,000, about a three-quarters of a one percent increase.  It should me noted that township officials are up for election next spring.

McHenry County Conservation District

The next highest taxing entity is the McHenry County Conservation District.

It will slice $19,317,898.84 out of property owners’ income this year.

Last year the total was $18,964,957.38.

The tax hike is almost 1.9%.

Library Districts

Library Districts cover a lot of the county (although Crystal Lake’s is in that city’s budget).

This year they ask you to pay $15,902,674.96.  Last year it was $15,901,974.39.

The Property Tax receipts for Library Districts will almost be constant.  Up just $700.

Park Districts

Park Districts take about as much out of the private sector as Library Districts, although municipalities like Lake in the Hill, McHenry and Woodstock do not have separate taxing districts.

$15,370,365.51 will be taxed this year compared to $15,059,395.19 last year.

The increase?

Plus 2%.  More than the Tax Cap allows, so, as with others that exceed 1.5%, it probably has to do with bond payments exempt from PTELL.

Sanitary Districts

The rest of the districts are under $1 million, so I won’t bother with them except for the Sanitary Districts, which like Fire Protection Districts, no one ever examines.  There are only two of which I am aware, the Lake in the Hills and the Island Lake (re-named the Northern Moraine) Sanitary Districts. ( I wrote about the McHenry County Health Department’s suing the latter  in a thrust for revenue, but that’s the only time I have dipped into that type of government other that attending the dedication of both of their waste treatment facilities.  The “Royal Flush” in Island Lake was a  hoot.)

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Hoe to find your bill here.

$677,590.39 is the tax “request” from Sanitary Districts this year.  It was $667,056.58 last year.

Essentially no change for Sanitary Districts, up just $534.

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ow to find you

The McHenry County Treasurer’s Office has posted the property tax bills that people will pay this year.

If you go here, you will see three ways to find what our tax bill is.

You can type in

• the Property Index Number (we all have that memorized, right?)
• the address (probably the easiest) or
• the name (here you have to remember the name on the deed)

I had no problem using our address.

Treasurer Bill LeFew will be sending out the bills this week.

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See analysis here.

If you are looking for a tax bill to be paid in 2013, look here.

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.

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.

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.

That’s “firework.” Singular.

In order to give cover to House Democrats who voted to hike state income taxes by 67%, House Speaker Mike Madigan is going to allow Jack Franks to have the spotlight one day this week.

One bill.

A big one, if it becomes law.

Franks will be allowed to call House Bill 3793.

That’s his Property Tax Cap modification bill that will prevent tax districts from increasing the amount billed taxpayers last year, if assessed valuation is decreasing. The technical term for this number, which is set by County Clerks, is the “extension.”

The bill will fly out of the House like a rocket off the launching raft on Crystal Lake on the 4th of July.

And then it will die away like the phosphorus and other chemicals exploded during an Independence Day celebration.

There will be no vote in the Illinois State Senate.

Nothing will be left but smoke.

Local tax districts will continue to ask for as much money as they are allowed to request by law and our taxes will continue to increase, even though the value of our property is declining.

If there are elected officials on boards that levy taxes brave enough to go to taxpayers’ side, here’s my suggestion:

Move to amend your tax district’s levy to replace the suggestion from the employees or lawyers

(which undoubtedly will be crafted to bring in as many tax dollars as possible) with

the “amount the McHenry County Clerk extended last year.”

The specific number can be put in later.

You don’t really have to worry about not having the number.

Odds are good you won’t even get a second to your motion.

Once elected, almost all board members forget that they represent taxpayers.

And once again Springfield politicians will have done what they do best:

Raise expectations for constituents,
who will see them go up in smoke as local governmental tax districts prepare to burn through more recession-dimiinsished taxpayer dollars.

There is widespread misunderstanding about the tax process. Today, we won’t look at the assessment part.

Instead we will examine what tax districts do to pry more money out of our pockets.

News stories talk about levies this time of year.

They are important, but not nearly as important as they are made out to be.

What tax districts almost uniformly do is levy, that is request in an ordinance, not what they expect to get, but an amount that is high enough to get the maximum amount of money allowed under the Property Tax Cap law (called PTELL by those who consider themselves in the know).

So, how does a local government figure out how to maximize its tax take from you.

Let’s use McHenry County government as an example.

The levy being proposed for next year is $78,809,995.

Last year the levy was $77,807,910.

So the levy, that is the request for money is up 1.3%.

Sounds modest, doesn’t it?

It’s even less than the increase in the CPI, which you can see in the Illinois Revenue Department table above.

The increase in the Consumer Price Index was 1.5%.

The amount the County Clerk requests the County Treasurer to collect is called the “extension.”

This requested amount takes into account the Tax Cap’s limits, which are applied to the amount collected the year before.

If deflation continues, eventually statutory tax rate limits will prevent tax districts from increasing their extension without a tax hike referendum

For McHenry County government, the extension this year was $76,847,205.11.  Almost all of it will be collected.

Do the division and you will find that the levy being considered by the County Board this year is 2.55% higher than last year’s extension.

That means county government will be able to collect the maximum amount allowed by law.

So, one can expect one’s county tax bill to increase the maximum allowed by the Tax Cap, 1.5%.

Don’t let any of the County Board members get away with telling you that they are lowering taxes.

It’s worth mentioned that if State Rep. Jack Franks’ Tax Cap amendment bill is passed, the county would receive the same amount it got (not 100% is paid, so the word “got” is a tiny bit of an exaggeration) this year.

The County Board could, of course, take the lead and cut its budgeted levy by $1,963,000–about 2.5%–and local property owners would see about the same tax bill than last year.

Someone could make a motion by substitution to the motion to approve the levy as presented to make the levy the same as last year–$76,847,205, rounding to the nearest dollar.

Let the County Board vote on that and see who votes “Yes” and who votes “No.”

Then, make the budget fit the levy.

When I was a baby budget examiner in the U.S. Bureau of the Budget, one of my hardest lessons involved making the Small Business Administration Budget fit the bottom line dictated by Sam Lawrence, the Section Chief.

He was a bright guy who, upon considering hiring me off the Management Intern list, asked by to-be Senior Budget Examiner Roger Adkins, if he could work with a Goldwater Republican. No matter that my mother and I had supported Scranton in 1964. It was my father who supported AU H20. (That was his bumper sticker.) Roger said he could work with anyone.

The SBA budget didn’t have a lot of lines. I tried to figure out what was needed in each of them and for at least two times I exceeded the bottom line laid out by Mr. Lawrence.

The third time he said, “You don’t understand. I don’t care what those numbers are, but they must add up to this bottom line.”

All of a sudden I got it.

And so can the Finance Committee, if the County Board dictates a lower bottom line.

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I have noted previously, that the two County Board Democrats have voted against raising the salaries of McHenry County officials.  If they added a second financial issue to their bag of arrows, they would be able to make the case that local Republicans are the “big spenders.”

That, of course, would fight with the Democrats’ state and national images, but it might make for an interesting campaign.

A press release from Grafton Township Supervisor Linda Moore:

Residents of Grafton Township now have the ability to show the members of the township board how they would cast their vote regarding the township tax levies for the Township and Road District. By visiting the township website, www.graftontownshipsupervisor.us residents can vote on whether they want to see the board increase the levies, decrease the levies, or levy for a zero change in the levy.

“As the Township Supervisor, I will use this poll to determine how I will vote when this matter comes before the board. I hope the rest of the board will also consider the public’s response when they determine their vote sometime in December. The question that is being posed is as follows:

If you were on the Grafton Township Board, how would you vote regarding the Levy? (A Levy is the use of government authority to impose or collect a tax.)

1. I would increase the levy.
2. I would decrease the levy.
3. I would make no change to the levy.

The website has had more than 15,000 hits to date. It includes township financial information, press releases, upcoming township events, meeting video and audio recordings, food pantry hours, financial assistance information and downloadable forms, a sign-up form to receive emails from the township, etc. Please visit here and vote on the

• increase or
• decrease

of township taxes.

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?

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.

Newly-appointed State Rep. Kent Gaffney sends this press release:

Gaffney wants tax relief for homeowners

Property tax bills should reflect declining home values

Wauconda, IL… In response to increasing property tax bills in the collar counties, State Representative Kent Gaffney (R-Lake Barrington) has signed on to House Bill 3793, a measure that would change Illinois’ Property Tax Extension Limitation Law.

Gaffney says that since he was recently sworn in a State Representative, he has received many phone calls from constituents upset that their property tax bills increased despite the fact that their property assessments decreased.

“Written in Illinois’ tax code is a ‘cap’ on tax levies, either 5% or the rate of inflation,” said Gaffney.

“Back when this was first introduced, the housing market was in the middle of a bull market and it saved homeowners thousands of dollars from increasing assessments.

“Now that everyone’s assessment is going down, this ‘cap’ is being used as a loophole by taxing bodies to increase property taxes.”

The Property Tax Extension Limitation Law (PTELL) limits local taxing bodies from increasing their tax levies each year at 5% or the rate off inflation, whichever is less.

However, in 2008 when the housing market crashed and assessments went down, taxing bodies began increasing their levies at the rate of inflation, increasing most homeowners’ overall tax bill.

HB 3793 would prohibit taxing bodies from increasing their levies in years that property assessments decrease.

“To me, it is completely unfair for people to be paying higher property taxes when their property values are declining,” said Gaffney. “This legislation will update Illinois’ tax code to reflect the economic reality of the current housing market.”

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The mechanics of why local tax districts, including schools, can raise their tax rates without voter approval has been explained previously on McHenry County Blog:

• “School Tax Rates Soar as Assessment Plunge“
• “Lakewood’s Tax Rate Up Most, Richmond’s Only One Down“
• “Real Estate Assessments Down Almost 10%, Don’t Expect a Lower Tax Bill“
• “The Primal Urge of Government:  Take as Much as It Can“
• “Local School and Tax Districts Not Bragging about Lower Tax Rates“
• “Why Townships Don’t Just Reduce the Amount They Tax“
• “The Skunk, the Meerkats and the Elephant – Part 2“