A Bill That Threatens Property Owners

This came from Tim Dwyer, the tax protest attorney who won his suit against the Harrison Grade School District in Wonder Lake:

Tax House with bills flyingWith regard to attacking the property tax problem, your readers should be urged to look at H.B. 5529.

This bill allows school districts to transfer money via intrafund transfers between the Educational Fund, the Operations and Maintenance Fund and the Transportation Fund.

It can be found at Section 5/17-2A of the School Code.

Originally adopted in the 1960’s, the Intrafund Transfer Section originally provided for a one-time intrafund transfer for unforeseen, non-recurring expenses.

In 2001, it was amended to allow any transfer for any reason until 2003.

Since that time (2003), it has been extended five times.

H.B. 5529 seeks another three-year extension and passed through Committee unanimously (22-0, with 7 members absent).

I spoke with the legislative representative of this bill, and she had no idea what it was about.

The response I received was that Committee members relied upon the two representatives in charge of Education (Rep. Crespo and Rep. Pritchard).

I spoke with Rep. Pritchard, and he told me that the bill was sponsored by School Districts

“so that they can pay their bills.”

In fact, what this bill allows, and has allowed for 16 years, is to circumvent the taxing requirements of the School Code and PTELL.

One perfect example in McHenry County is Harrison School District 36 in Wonder Lake.

School District 36 had amassed 3.6 million dollars in its Transportation Fund when its actual Transportation costs were $337,000 annually.

The taxpayers sued (in large part as a result of the actions of D36 resident Clifford Leegard) and prevailed.

The Harrison Grade School District is on the east side of Wonder Lake.

The Harrison Grade School District is on the east side of Wonder Lake.

The District agreed to rebate $123,121 to those taxpayers who objected to the 2014 levy of 1.8 million dollars for a $337,000 budget item.

The amount rebated represented the entire transportation levy for those residents who signed up for the tax objection lawsuit.

Under normal circumstances, District 36 would have so much left in its Transportation budget that it could not, legally, adopt a levy for its Transportation Fund until such time as that fund was reduced.

This, of course, would have saved all taxpayers in District 36’s tax code 20% of future tax bills.

But under Section 5/17-2A, District 36 transferred its excess transportation funds, an amount in excess of three million dollars, to its Education and Operations and Maintenance Funds.

In its 2015 levy, District 36 levied for Transportation funds.

The level of understanding of what House Bill 5529 would allow seems to have been quite low on the House floor last Thursday.

The level of understanding of what House Bill 5529 would allow seems to have been quite low on the House floor last Thursday.

In reality, over three million dollars of illegally levied funds are now legal-due solely to Section 5/17-2A. H.B. 5529 is up right now, and presently has no opposition.

Local schools are responsible for 59%-68% of our property tax bills.

I would urge all of your blog readers to call or write their state representatives and senators and demand that H.B. 5529 be rejected.


Timothy P. Dwyer
St. Charles


A Bill That Threatens Property Owners — 10 Comments

  1. Woodstock D200 has been deliberately over-levying in transportation fund and transferring excess to general ed fund.

    This not only enables D200 to evade PTELL taxpayer protection, it enables them to evade the 4% statutory maximum tax rate cap on General Ed Fund.

  2. Illinois General Assembly website, 99th General Assembly (2015 – 2016)

    http://www.ilga.gov > Bills & Resolutions > House – Bills: 5501 – 5600 > HB5529 > SCH CD-INTERFUND TRANSFERS

    House Sponsors:
    Fred Crespo – 44th Representative District – Democrat – Streamwood (Cook County)

    Robert Pritchard – 70th Representative District – Republican – Sycamore (DeKalb County, Kane County)

    Senate Sponsors:
    John Sullivan – 47th Legislative District – Democrat – Quincy (Adams County, Hancock County, Henderson County, McDonough County, Schuyler County, Brown County, Mason County, Cass County, and Warren County; and partially in Knox County and Fulton County)

    Jennifer Bertino-Tarrant – 49th Legislative District – Democrat – Plainfield (Kendall County, Will County)

    Synopsis as Introduced:

    Amends the School Code.

    With respect to a school district other than the Chicago school district, provides that through June 30, 2019 (instead of June 20, 2016), surplus life safety taxes and interest earnings theron may be transferred to the Operations and Maintenance Fund for building repair work.

    Extends the time period during which a school district other than the Chicago school district may transfer moneys from specified funds for any purpose from June 30, 2016 to June 30, 2019.

    Effective immediately.

    Passed the House April 14, 2016, 108-4-0.

    Currently in the Senate Assignments committee, whose members are James Clayborne, Don Harmon, Kimberly Lightford, Dale Righter, and Pamela Althoff.


    Funds from the Working Cash Fund can also be permanently transferred to other funds.

    Which is why some districts have repeated issues of Working Cash Bonds yet the Working Cash Fund balance does not permanently grow

    The original notion and how it’s sold to taxpayers who originally approve the Working Cash Fund via referendum, is working cash is a temporary loan to other funds that is to be repaid to the Working Cash Fund.


    Another piece of “temporary” legislation that has been repeatedly renewed in increments of 3 years or so, and is set to expire this summer, is the Early Retirement Option (ERO) in the Teachers Retirement System of Illinois (TRS) pension fund.

  3. A quote from the Tribune:

    “Property taxes at the municipal level have not been going to fund spotless roads or other public works. Instead, they’re mostly funding out-of-control pension costs.”


    Last year McHenry County residential property tax owners accounted for 81.68 percent of the total property assessments in the County.

    This year, 2016, residential property owners represent 82.08 percent of total property assessments.

    In other words, yet again, the portion of property taxes collected on residential property will increase.

    When will YOU call your State Legislators and DEMAND a referendum on the fall ballot to remove the Public Sector pension guarantee from the Constitution?

  4. Total EAV for the County 2015 $7,777,760,419

    Total EAV for the County 2014 $7,606,165,734

    Source: County Assessor website annual report.

  5. The bill to repeal the pension sentence from the Illinois State Constitution is HJRCA0009.

    House Joint Resolution Constitutional Amendment 9 in the 99th General Assembly.

    Filed by State Representative Joe Sosnowski – 69th Representative District – Rockford (Winnebago County & Boone County) – Republican – on January 23, 2015.

    Referred to the House Rules Committee where it sits to this day (no surprise).

    Tom Morrison was added as a Co-Sponsor on February 18, 2015.

    He remains the only co-sponsor (no one from McHenry County).

    Tom Morrison – 54th Representative District – Palatine (Cook County) – Republican.

    http://www.ilga.gov > Bills & Resolutions > House – Joint Resolution Constitutional Amendments > 0001 – 0059 > HJRCA0009 CONAMEND-REPEAL PENSION RIGHTS


    The Better Government Association has a new Illinois Schools Database that contains Administrator Contracts, Collective Bargaining Agreements, Pay, Settlements, and Budgets for Illinois school districts.

    Note the pay is not the full pay, it does not include all pensionable and non pensionable income…visit Open the Books for pensionable income pay.



  6. Thanks for the heads-up Cal.

    We have to stop this cycle of fraud by over-levying and then transferring funds at their leisure – thereby bypassing PTELL regulation.

    I believe killing this bill will end the incentive for school districts to do this in the future.

    Emails are flying on their way

  7. It looks like this bill will probably pass.

    If you want your voice heard. email Jim Kaitschuk, Governor Rauner’s Legislaive Director at jim.kaitschuk@illinois.gov

    We are the last chance between tax reform and continued abuse.

  8. House Bill 5529 (HB 5529) was signed into law as Public Act 99-0713 (PA 99-0713) on August 5, 2016 by Governor Bruce Rauner.

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