Reader Challenge: Tax New Growth or Cut Tax Rates by Keeping Tax Request Constant?

Jack Franks spoke from the Crystal Lake South High School Auditorium stage. Note his "Cut 10 NOW" campaign logo in the background.

Jack Franks spoke from the Crystal Lake South High School Auditorium stagein his first Town Hall Meeting. Note his “CUT PROPERTY TAXES 10% NOW” campaign logo in the background.

I have to admit I was astounded when McHenry County Board Chairman and State Representative Jack Franks put a tax hike resolution on the agenda for Tuesday’s meeting.

How could he pave the way for a tax hike?

Even if were “only” $80,000 when he campaigned on cutting our home’s property tax bills 10%.

Then Franks backed down that grandiose pie in the sky campaign theme before newspaper editorial boards to merely cutting the county’s share of our tax bill by 10%–which is only about 1% of what homeowners pay in real estate taxes.

The tax hike resolution could not have been voted upon unless Chairman and State Representatve Jack Franks had placed the tax hike resolution on the Board’s agenda.

You can see the operative paragraph of the resolution below:

The tax hike resolution makes it abundantly clear that it hikes McHenry County Taxes.

The tax hike resolution makes it abundantly clear that it hikes McHenry County taxes.

Chairman and State Rep. Jack Frank’s property tax flip-flop was worthy of the Jesse White Tumblers he has brought out to entertain the locals at his fundraisers.

By putting the resolution on the agenda, Franks turned his campaign promise upside down.

Jesse White Tumbler upside down.

Jesse White Tumbler upside down.

I wrote two articles on Tuesday…and I guess this makes three in total, no four, if you count the comment from Cary Grade School Board 26 President Scott Coffey that his Board’s work to cut his tax district’s tax burden is wiped out by the County Board’s raising its levy $3 million for 2017 real estate tax bills.

The interchange from readers is fascinating.

Some commenters continue to insist that it wasn’t really a tax hike that the County Board passed.

Others, defenders of Jack Franks, point out that Franks didn’t vote for the tax hike (true, but ignore the fact that there would have been no tax hike had Franks not placed the tax hike resolution on the ballot).

Still other commenters justify the action because the outgoing Board, almost a third of whom are new as of December 5th, voted to balloon levy enough to capture all the new construction in the County.

That is the issue I would like to pose to you today.

Below, for McHenry County, are the extension (amount to be collected) flowing from the levies, rounded to the nearest thousand dollars, except for 2016, which show the levy. Note that taxes are collected the year after the date given.  These figures come from this part of the County Clerk’s web site.

  • 2009 – $75,326.00
  • 2010 – $77,809,000
  • 2011 – $78,810,000
  • 2012 – $78,835,000
  • 2013 – $78,627,000
  • 2014 – $78,966,000
  • 2015 – $76,289,000
  • 2016 -$79,424,078 (including Tuesday’s $80,000 tax increase)

McHenry County College’s tax levies follow:

  • 2009 – $26,929,628.76 (Levy $27,901,703)
  • 2010 – $27,210,256.12 (Levy $28,234,827)
  • 2011 – $28,088,977.20 (Levy $29,695,000)
  • 2012 – $28,584,737.17 (Levy -$29,695,000)
  • 2013 – $26,922,035.74 (Levy $27,966,936)
  • 2014 – $26,900,389.21 (Levy $27,966,936)
  • 2015 – $26,861,784.02 (Levy 27,966,936)
  • 2016 – (Levy $27,966,936)

The tax extensions above are only from McHenry County, while MCC has parts of Kane and Lake Couinties.  Checking for one year showed the total extension being the same as the levy.

Should tax districts follow the example of McHenry County government or McHenry County College?

For the last four years, McHenry County College has had a relatively a flat levy.

The college board’s levying what it collected the year before leads to the proportion of property taxes flowing to MCC, compared to your total tax bill falling each year.  That happens each year the Trustees ask for no more money than the year before.

Why?

Because there has been some new growth each year.

When one divides the amount to be taxes to be collected by the assessed valuation, the result is a lower tax rate (other things being equal, as the economics’ texts I read in college continually said).

Compare that modus opeerandum with that of McHenry County government.

The County Board decided to keep taxes on existing property basically flat.

The Board has not taken increases allowed under the Tax Cap (PTELL to the technocrats), that is, whatever the increase in the Consumer Price Index has been during the previous year.

But, knowing that inflation does occur and costs do go up, Board members have attempted to “capture” taxes from new construction each year.

Campaigns have been crafted to claim that the Board members have not increased taxes.

But, they have.

It’s just that existing taxpayers continued to pay about the same amount in year two as they did in year one.

Had the County Board kept its levy constant, as did McHenry County College, tax bills would have decreased (other things being equal).


Comments

Reader Challenge: Tax New Growth or Cut Tax Rates by Keeping Tax Request Constant? — 27 Comments

  1. We have very talented staff at McHenry County.

    Talented in the sense that they are professionals at getting elected Board members to do whatever they want.

    We, the voters, tend to NOT elect the best representatives.

    Why did we have McCann and Kearns elected in D-6 in the General election?

    Voters cast aside conservative voice Schuster.

    Wake up voters, the Board is a ‘rubber stamp’ for what staff wants.

    There was some incidental discussion occurring within Committee meetings but that will now be curtailed even further by reducing the number of committees – less meetings means more items on each agenda which will result in less discussion.

    In addition, with the reduction in the number of ‘voting’ Board meetings, agenda packets will grow in volume like legislation did in Springfield.

    Guess how your State and federal elected representatives decide to vote?

    They count on the recommendations of staff and fellow elected officials – THEY DO NOT READ 90 PERCENT OF THE LEGISLATION!!

    In D.C. and Springfield they vote on legislation to find out what is in it.

    The little liar, with the assistance of the ‘rubber stamp’ County Board has brought that attitude to McHenry County.

    I could say WAKE UP VOTERS!

    but it is too late – the Board you have is the Board you get.

    The following in another post on this topic bear repeating:

    “We’re levying more taxes?” asked Huntley Jim Kearns.

    He asked that and then voted for the tax increase.

    Then we have the following from the brain trust tax and spender Skala:

    “I thought it was important to have new property growth pay taxes.

    “We’ve always wanted to have new growth captured.

    “It’s a small dollar amount compared to out total budget [$79 million].””

    If you ever had any doubt who pulls the strings of the idiots (my opinion) we elect, the following should remove that doubt:

    “County Administrator Peter Austin echoed Skala’s comment that “the budget policy was to capture new growth.”

    “What happens if we don’t capture that growth? Does that township benefit?”

    Mike Skala

    Mike Skala

    “Yes,” replied Skala. “That’s what happens.”

    “It didn’t used to be an issue [when the County Board took all the money that the Tax Cap would allow, that is, whatever the Consumer Price Index had increased],” Austin added.

    “If taking the CPI,” Skala said, the county could “balloon levy to collect every cent they are entitled to.

    He pointed out that the County Board’s budget policy was to take new growth.

    “If we’re a little under, we lose it.”

    Skala then added that he favored “getting rid of our township assessors and going to a county assessor.””

    Those of you on the County Board who call yourselves Republicans and voted to increase our taxes, I remind you that Miller and Draffkorn are no longer on the County Board.

  2. I truly do not understand.

    Who is “staff”?

    I thought the voters told the electors what they wanted done.

  3. Not to worry, Cindy.

    Hardly anyone understands this.

    Staff means; administration, department heads, financial, clerical and office employees.

    Collectively, they love it when all the new county board members come in.

    This means they can easily pull the wool, so to speak, over board members eyes.

    The history is lost when experienced members are no longer there to call these people when they are attempting to get their pet projects/agendas accomplished… things they could never get away with were there “committed” members who understand that history.

    Old, previously rejected projects are suddenly slipped through.

  4. Ersel? I get the mening of staff.

    I do NOT understand why they would have control over anything.

    They are peons that pull paychecks.

    Why would they have so much power over elected officials?

    What is going on here that we have officials that run for offices and then they are so lazy that they rely on peons to tell them what to do? That is what I do NOT understand.

  5. Really????

    Board Chariman Jack does not even have a vote.

    You will argue that he put it on the agenda well your republicans voted on it.

    Ersel says staff pulls the wool over their eyes I say that is a bunch of baloney.

    There was two meetings where the information could have been disgusted clearly.

  6. Jose?

    I think the whole point here is that they are incompetent; and only do what they are told by the peons.

    This is what we have seen with this bunch of nitwits and it is ongoing.

    What I question is, how do we stop this!

  7. The only way to stop it is to know who we elect to office and should they not perform as expected… we kick them out at the next election.

    The problem we have is people who, in McHenry County, for decades have simply told the voters they were Republicans but their actions have been anything but!

    Unfortunately, a gullible public does not care to take the candidates on by personally contacting and talking with them… watching their prior actions… and, making informed decisions before voting for these people.

    The other element is the “dirty politics” angle.

    Many of us have been the brunt of this tactic.

    It is most discouraging because as the saying goes… the first liar wins.

    So true!

  8. Cindy… you are spot on with the “incompetent” point.

    Frankly, from my years of working with and observing these elected officials, it is clear that most are not fully aware of the responsibility they assume when elected to office.

    Clear indication of the callousness of these people was when, at their meetings, you would hear most of the members ripping open their agenda packets.

    These people either made off-the-wall comments/questions having nothing to do with the issue at hand… or, they sat silently, then voted as they had been “expected” to vote.

    Obviously they had not done their due-diligence prior to voting on the issues!

    This continues today!

    In fact it is worse.

    Most love their titles more than the people who put them in office.

  9. Josewhales, first of all, just possibly you could consider taking a elementary English course.

    Beyond that… it is clear that you do not understand the rationale behind the “two meetings” you reference.

    Understanding all the important issues in the 721 page agenda packet… is not something you “digest” during a “rushed” meeting.

    These agenda items need to be thoroughly discussed and moved forward from the responding committee.

    Had this board had any spine, and actually represented us; they would have forced every issue in the packet back to its respective committee before moving any of the issues to final resolution.

    Unfortunately… your chairman and the minions he has gathered at his feet… are more interested in making a show… then getting out of the meeting as fast as they can.

    Never mind the facts boys and girls!

  10. The county has way too much “professional” administration, way too many employees, way too many board members, way too many of everything, including dollars.

  11. Very true.

    Management at the county are very good at wasting money.

    Every once in a while they think of ways to save pennies from the lowest paid employees while wasting thousands on those at the higher levels.

  12. A abbreviated recap of events to grasp what has occurred (feel free to add any pertinent details).

    The McHenry County property taxing district underestimated Algonquin Township new growth (EAV?) by $6,965,052.

    (Can someone from the County please specify if the $6,965,052 was EAV or assessed value.)

    The McHenry County property taxing district increased the McHenry County property taxing district levy by $80,000 from $44,431,303 to $44,431,303.

    ++++++++++

    A summary of how parcels pay their fair share.

    The fair share is accounted for via the assessment process.

    The assessments of new growth parcels were hiked, and thus the new growth parcels will pay hiked property taxes as a result.

    +++++++++

    A summary of a property taxing district wants more property tax revenue.

    If a property taxing district wants more property tax revenue, they hike their levy.

    One option is to levy for new growth.

    Since the levy for new growth hiked the overall levy, and the overall levy is evenly distributed via tax rate (calculated by the County Clerk) among all parcels in the property taxing district, levying for new growth hikes taxes of every parcel, not just new growth parcels?

    If there is something being missed in that explanation which results in the new growth levy being distributed to new growth parcels only (and not all parcels), please explain.

    ++++++++++++

    A reason commonly given to levy for new growth, is new growth hikes government costs.

    But the county did not explain why they need more revenue to service the new growth parcels.

    And Jack Franks has a stated goal of reducing property tax levy by 10%.

    So why did he put the resolution on the agenda to hike the levy by $80,000.

    Again, the new growth assessment was already done, which will result in the new growth parcels receiving a hiked property tax bill to account for the new growth.

    +++++++++++

    Jack Franks’ Cut10.org website (which redirected to CutMcHenryTaxes.com) throughout the entire 2016 County Board Chair campaign reflected that his intention was a 10% tax levy cut in every property taxing district in the county.

    The following was on the Cut10.org / CutMcHenryTaxes.com home page throughout the campaign:

    “I’m running for McHenry County Board Chairman to cut property taxes levy 10% across the board.

    This means a 10% property tax levy reduction from EVERY government body in our County.

    We can finally give relief to local property taxpayers if we eliminate government waste and fraud and more efficiently manage our tax dollars.

    Join me in sending a message to McHenry County leaders in support of this 10% cut.

    And know that I will introduce this plan on my first day as your new McHenry County Board Chairman.

    – Jack Franks.”

    +++++++

    Northwest Herald

    Endorsement: McHenry County Board Chairman Jack Franks

    October 9, 2016

    “”The only way to reduce taxes is for government to spend less – that is what i will fight for,” Franks said in response to a Northwest Herald questionnaire.

    “I will require a ‘zero based budget.’

    This means that – instead of using last year’s budget numbers as a starting point, we start from scratch and justify every penny that government agencies claim to need.

    We will scrutinize every expenditure.”

    Franks promises to reduce the county’s levy by 10 percent and use his bully pulpit to persuade other local taxing bodies to reduce their levies.”

    +++++++++

  13. But the MCGOP, local Tea Party and supposed reformer MCGOPAC all assured us these guys were good conservatives that would lower our taxes.
    I particularly recall them all telling me to vote for Skala.

    It must be that damned Democrat Franks… He’s infiltrated the GOP and is using it to disseminate disinformation.

    That must be it!

    I mean surely we can’t blame our own GOP who ask for contributions and support, while peddling their fraudulent candidates.

    And Why point the fingers at the ones doing the lying and casting the actual votes when we have Franks to blame.

    Repeat after me:

    “Those who call themselves republican can do no wrong.”

    And damned be anyone who shall hold them accountable for their hypocrisy and lies.

    As long as there are democrats to blame for our plunder, then plunder on, we shall! We are the MC Republicans!

  14. Once again, Mark, thanks for totally confusing the issue we were discussing above.

    Your ‘packets’ of information are not clearing anything up.

  15. Patrick?

    I think you are negating all the folks that truly are appalled at what these folks (not labeling anyone with any divide and conquer names) did to all of us.

    Once again, there is no such thing as republican/democrat.

    There are only people.

    Thes people are drooling evil fools to what they did.

    Call them anything you like – it doesn’t change the fact that they were entrusted to take care of our “business” by people that actualy gave them a vote of confidenece in their ability to do just that.

    Once again, we have been hornswaggled by very stupid people that only know “how to” get elected and “how to” keep their litte fifedoms going.

    There must be a better way than Ersel’s suggestion of waiting until the next election to remove these incompetent and very dangerous people.

    (Beside running, like the tens of thousands are doing by removing themselvse from this state.)

  16. A property taxing district (McHenry County) levying / taxing new growth parcels results in a property tax hike for all parcels in the property taxing district.

    The reason is the oversimplified formula of property taxing district levy / property taxing district assessment = property taxing district tax rate, and all parcels in a property taxing district receive the same property taxing district tax rate.

    The words “taxing new growth” results in many believing only new growth parcels will receive a property tax hike.

    That’s not true.

    Taxing new growth results in a property tax hike for every parcel.

    Unless we are missing something that has not yet been pointed out.

  17. The only thing, other than waiting for the next election to boot some of these folks… would be to make the current members extremely uncomfortable… (maybe shame them) into resigning.

    Only problem I see with that is… they seem to be immune to anything we say.

    Aside from that, should someone resign… guess who will appoint the replacements.

    Either way… it is not good for us… and sadly, voters are in the mood to simply kick them all out and start over. Unfortunately… in most cases… you are better off with the devil-you-know, rather than the devil-you-don’t-know!

  18. All other things equal, if new growth in assessed value / EAV occurs, and the levy remains the same:

    – Property taxes decrease in non new growth parcels

    – Property taxes increase in new growth parcels

    – Property taxing district receives no new revenue.

    ++++++++

    All other things equal, if new growth in assessed value / EAV occurs, and the levy increases, the determination of whether or not property taxes for non new growth parcels increase, depends if the assessed value / EAV in new growth parcels is hiked enough to 100% covers the hiked levy.

    It is a math equation.

    Property taxing district Levy / property taxing district assessed value (or is it EAV) = Tax Rate

    ++++++++++

    TIFs add a monkey wrench to the equation.

  19. The bottom line is that if government body asks for more property tax, they will get more property tax (within a few limits).

    If a government body asks for less property tax they will get less.

    Mark and others: I strongly suggest you read the document at this link: http://www.revenue.state.il.us/publications/localgovernment/ptax1004.pdf

    After you read this document you will obviously know more than most Board members.

    During the discussions it became blatantly obvious that the professional County staff has thoroughly misled the Board.

    Here is the part of the document referenced that addresses PTELL and new growth:

    The Property Tax Extension Limitation Law (PTELL) is designed to limit increases in property
    tax extensions (total taxes billed) for non-home rule taxing districts. Increases in property tax
    extensions are limited to the lesser of 5 percent or the increase in the National Consumer Price
    Index (CPI) for the year preceding the levy year. The CPI used is the National CPI for all urban
    consumers for all items as published by the United States Department of Labor, Bureau of Labor
    Statistics. The applicable December to December change is generally available in the middle of
    January.

    The website for the CPI increase is http://www.bls.gov
    .

    Although the law is commonly referred to as “tax caps,” use of this phrase can be misleading.

    The PTELL does not “cap” either individual property tax bills or individual property assessments.

    Instead, the PTELL allows a taxing district to receive a
    limited inflationary increase in tax
    extensions on existing property, plus an additional amount for new construction, annexations to
    the district, and voter-approved rate or limitation increases.

    The limitation slows the growth of property tax revenues to taxing districts when property values and
    assessments are increasing faster than the rate of inflation.

    As a whole, property owners have some
    protection from tax bills that increase only because the market value of their property is rising rapidly.

    If a taxing district determines that it needs more money than is allowed under the PTELL, it can ask
    the voters to approve an increase.

    Payments for bonds issued without voter approval are subject to strict limitations.

    Some extensions, by law, are not included in the aggregate extension.

    These extensions are not
    limited, and include bonds issued with voter approval.”

  20. If the line isn’t held on spending we’ll become the 28th worst county for taxation in the nation.

    Would that be special.

  21. Ersel?

    This is why for years now I have urged the need to bring back public pillories.

    Beyond that, I believe we should hold these fools responsible; and really put the screws to them that they absolutely positively have to start listening to intelligent people that can tell when they are being lied to.

    They must be FORCED to fight back and stop rolling over on the taxpayers.

    Without that – they will be the only ones left in this county to collect taxes from in order to support their own salaries.

    How can they be so blind as to not see that they are cutting their own throats!

  22. McHenry County mean and median property tax rate is 3.6% of fair market value.

    I haven’t seen any higher than that.

    New Jersey and Illinois are said to have highest mean property tax rates around 2.5%.

  23. Notice that Jack Franks has not mentioned a zero based levy.

    A zero based levy would require justification for any levy increase.

    Any levy increase, whether it is the lesser of CPI or 5%, new growth, bonds, etc., hikes the property taxes of every parcel in the property taxing district.

    That’s due to the basic formula the County Clerk uses in calculating the Tax Rate for each property taxing district:

    Levy / Assessed Value (or is it EAV) = Tax Rate.

    And the basic formula of calculating the property taxes of each parcel:

    (EAV – Exemptions} x Tax Rate = Property Tax Bill.

    +++++++

    Property taxing districts typically justify hiking new growth levies as having to capture new growth.

    In addition they should justify how they plan to spend the hiked property tax revenue they will receive.

    Just because there is new growth doesn’t necessarily mean that government costs are hiked by the amount the property taxing district will receive by levying for new growth.

    The county levied the maximum amount they could receive for new growth?

  24. Short of the public pillories, I continue to pray against the evil that causes this type of snafu.

    I encourage all others to engage in quantum entanglement and do the same.

  25. Based on his quotes in the other articles, it does appear to me that County Finance Czar Mike Skala wants to “fake” additional New Construction in order to raise County Tax Revenue?

    His statement claiming that the Townships “benefit” from unreported New Construction tells you that he’s a liar and that he knows it.

    And Skala clearly wants to cut the voter out of the property tax equation by replacing elected Township Tax Assessors (who are directly accountable to the taxpayer at the ballot box) with Skala’s own fellow APPOINTED political crony, the County Supervisor of Tax Assessments.

    In other words, Skala wants to switch to the same corrupt tax system they have in Cook County, BUT he wants to make his County Tax Assessor UNELECTED, which even Cook County isn’t corrupt enough to try to get away with…

  26. What is Mike Skala’s explanation for the “missing” New Construction that he’s “found?”

    Does he have the parcel numbers for these properties?

    Which Township Assessor is at fault here?

    Did the County Supervisor of Assessments “discover” the “missing” New Construction, or did Mike Skala find it himself?

    So many questions…no answers yet?

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