In 1973, my first year in the Illinois House of Representatives, State Rep. Gene Hoffman, a high school teachers from DuPage County, passed the Resource Equalizer State Aid to Education law.
It included property tax relief.
It had some exceptions, but, generally, high tax school districts were required over a four-year period to reduce their real estate tax rates to that level used in the state funding formula:
- $3 per $100 of assessed valuation for unit school ditricts
- $1.95 per $100 of AV for high school districts
- $1.05 per $100 of AV for grade school districts
In 1976, that part of the Resource Equalizer was repealed without my vote.
So much for equalizing resources.
The most recent bill is so anemic on the subject that no reduction in property taxes is required.
However,
- high tax districts can, with referendum approval, reduce their tax rates
- districts with high tax rates, but low assessed valuation, can reduce their rates with part of the money being replaced with increased state grants
It certainly is not the property tax freeze for which Governor Bruce Rauner campaigned.
districts with high tax rates, but low assessed valuation, can reduce their rates with part of the money being replaced with increased state grants
HOW???????
The legislation is Senate Bill 1947 (SB 1947) which was signed into law by the Governor Bruce Rauner as Public Act 100-0465 (PA 100-0465) on August 31, 2017.
This was the education funding reform bill.
In a legislative scheme, one of the other four budget bills had a booby trap that required a new funding model to be implemented in order for state funding to be distributed to local school districts.
A big portion of SB 1947 consisted of SB 1 which died in the House due to lack of votes.
SB 1947 is one of four 4 bills that consisted of the FY 2018 state budget.
The state fiscal year is July 1 – June 30th, which coincides with the fiscal year of most if not all Illinois school districts.
The other budget bills being:
Senate Bill 6 (SB 6) aka Spending Bill aka Appropriations Bill aka Democrat Budget, passed into law as Public Act 100-0021 (PA 100-0021).
Senate Bill 9 (SB 9) aka the Revenue Bill (includes the state income tax hike), passed into law as Public Act 100-0022 (PA 100-0022).
Senate Bill 42 (SB 42) aka the Budget Implementation Bill aka BIMP, passed into law as Public Act 100-0023 (PA 100-0023).
All three bills were an override of the Governor’s veto and passed first the Senate on July 4, 2017 and then the House on July 6, 2017.
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Civic Federation
What the New Illinois School Funding Formula Means for Chicago Public Schools
September 1, 2017
http://www.civicfed.org/civic-federation/blog/what-new-illinois-school-funding-formula-means-chicago-public-schools
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Despite its title the Civic Federation article contains some information about school districts outside of Chicago.
Illinois state law for public education has some unique rules that apply only to the City of Chicago School District 299 (Chicago Public Schools).
Chicago Tribune
Pair of Property Tax Cut Options in New Schools Bill, But They’re Limited
by Kim Geiger
September 1, 2017
http://www.chicagotribune.com/news/local/politics/ct-illinois-schools-formula-property-taxes-met-20170904-story.html
McHenry County Blog
From Property Tax Freeze to Need to Get 10% of Registered Voters to Sign a Petition for a Tax Cut Referendum in High Tax School Districts
September 3, 2017
http://www.mchenrycountyblog.com/2017/09/03/from-property-tax-freeze-to-need-to-get-10-of-registered-voters-to-sign-a-petition-for-a-referendum-in-high-tax-school-district
Chicago Tribune
Illinois Governor Signs Sweeping School Funding Changes
by Sara Burnett and Sophia Tareen
Associated Press
September 1, 2017
The new plan allows people living in school districts where funding is more than 110 percent of the adequacy target – essentially wealthier districts with large cash reserves – to try to have their property taxes reduced.
Ten percent of a district’s registered voters would have to sign a petition to put a question on the ballot.”
http://www.chicagotribune.com/news/sns-bc-us–illinois-school-funding-news-guide-20170831-story.html
McHenry County Blog
Steve Reick Explains His Support of the State Aid to Education Bill
Sometimes You Have To Hold Your Nose and Vote Yes
[Includes YouTube video of Mr. Reick speaking on the House Floor before the vote]
September 1, 2017
The bill takes $50 million of newly appropriated money and provides property tax relief to districts in low-EAV/high levy districts.
It’s the first step to what I hope will be a movement to cap property taxes statwide;…”
http://www.mchenrycountyblog.com/2017/09/01/steve-reick-explains-his-support-of-the-state-aid-to-education-bill
Susan if Steve Reick is your state rep you can try contacting his office with questions.
Chicago City Wire
Analysis: State, Federal Subsidies to CPS Among Chicago-area’s Highest
May 19, 2017
by LocalLabs News Service
“Which Chicago-area school districts receive the most state and federal funding?
Schools are funded by a combination of local, state, and federal taxpayer dollars.
Which 100 school districts receive the most outside subsidy?”
The following are the McHenry County school districts in the top 100 list.
Only Chicago area school districts are included in the top 100; it is not a statewide list.
Rank – District – State & Federal Subsidy – Percent of Total
38 – Harvard CUSD 50 – $7,602 – 52%
71 – Harrison District 36 (Wonder Lake) – $4,951 – 32%
76 – Woodstock CUSD 200 – $4,751 – 30%
88 – Johnsburg CUSD 12 – $4,534 – 27%
http://www.chicagocitywire.com/stories/511117589-analysis-state-federal-subsidies-to-cps-amont-chicago-area-s-highest
High Tax District Example
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Township High School District 214
Arlington Heights, Cook County
Official Statement
posted September 20, 2017 on the EMMA MSRB website
Dated Date September 28, 2017
Closing Date September 28, 2017
$8,900,000 General Obligation Limited Refunding School Bonds, Series 2017
“Risk Factors”
“Decrease in Property Tax Extension for Educational Purposes
Public Act 100-0465 provides that if the District’s Adequacy Target (as defined under “State Aid” herein) exceeds 110% for the school year that begins during the calendar year immediately preceding the levy year for which a tax reduction is sought, a petition signed by at least 10% of the registered voters in the District may be filed requiring a proposition to be submitted to the District’s voters at the next consolidated election in April of odd-numbered years asking the voters whether the District must reduce its extension for educational purposes for the levy year in which the election is held to an amount that is less than the extension for educational purposes for the immediately preceding levy year.
The reduced extension, however, may not be more than 10% lower than the amount extended for educational purposes in the previous levy year and may not cause the District’s Adequacy Target to fall below 110% for the levy year for which the reduction is sought.
If the voters approve the proposition, the County Clerk will extend a rate for educational purposes that is no greater than the limiting rate for educational purposes computed in accordance with the Limitation Law.
If the proposition is submitted to the voters, it may not be submitted again at any of the next two consolidated elections.”
https://emma.msrb.org/ES1046908-ES818309-ES1219588.pdf
Illinois General Assembly
Public Act 100-0465
http://www.ilga.gov/legislation/publicacts/100/PDF/100-0465.pdf
From the above URL
Illinois General Assembly
Public Act 100-0465
Starting on pdf page 238
105 ILCS 5/2-3.170 new
Sec. 2-3.170. Property Tax Relief Pool Grants
– about 3 pages
(a) As used in this Section, “Property tax multiplier” equals one minus the square of the school District’s Local Capacity Percentage, as defined in Section 18-8.15 of this Code.
“State Board” means the State Board of Education.
“Unit equivalent tax rate” means the Adjusted Operating Tax Rate, as defined in Section 18-8.15 of this Code, multiplied by a factor of 1 for unit school districts, 13/9 for elementary school districts, and 13/4 for high school districts.
(b) Subject to appropriation, the State Board shall provide grants to eligible school districts that provide tax relief to the school district’s residents, up to a limit of 1% of the school district’s equalized assessed value, as provided in this Section.
(c) By August 1 of each year, the State Board shall publish an estimated threshold unit equivalent tax rate.
School districts whose adjusted operating tax rate, as defined in this Section, is greater than the etimated threshold unit equivalent tax rate are eligible for relief under this Section.
This estimated tax rate shall be based on the most recent available data provided by school districts pursuant to Section 18-8.15 of this Code.
The State Board shall estimate this property tax rate based on the amount appropriated to the grant program and the assumption that a set of school districts, based on criteria established by the State Board, will apply for grants under this Section.
The criteria shall be based on reasonable assumptions about when school districts will apply for the grant.
(d) School districts seeking grants under this Section shall apply to the State Board by October 1 of each year.
All applications to the State Board for grants shall include the amount of the grant requested.
(e) By December 1 of each year, based on the most recent available data provided by school districts pursuant to Section 18-8.15 of this Code, the State Board shall calculate the unit equivalent tax rate, based on the applications received by the State Board, above which the appropriations are sufficient to provide relief and publish a list of the school districts eligible for relief.
(f) The State Board shall publish a final list of grant recipients and provide payment of the grants by January 15 of each year.
(g) If payment from the State Board is received by the school district on time, the school district shall reduce its property tax levy in an amount equal to the grant received under this Section.
(h) The total grant to a school district under this Section shall be calculated based on the total amount of reduction in the school district’s aggregate extension, up to a limit of 1% of a district’s equalized assessed value for a unit school district, 0.69% for an elementary school district, and 0.31% for a high school district, multiplied by the property tax multiplier or the amount that the unit equivalent tax rate is greater than the rate determined by the State Board, whichever is less.
(i) If the State Board does not expend all appropriations allocated pursuant to this Section, then any remaining funds shall be allocated pursuant to Section 18-8.15 of this Code.
(j) The State Board shall prioritize payments under Section 18-8.15 of this Code over payments under this Section, if necessary.
(k) Any grants received by a school district shall be Included in future calculations of that school district’s Base Funding Minimum under Section 18-8.15 of this Code.
(l) In the tax year following receipt of a Property Tax Pool Relief Grant, the aggregate levy of any school district receiving a grant under this Section, for purposes of the Property Tax Extension Limitation Law, shall include the tax relief the school district provided in the previous taxable year under this Section.
Also from the above URL
Illinois General Assembly
Public Act 100-0465
– pdf page 248
The following language is added to the state report card.
(G) a school district’s Final Percent of Adequacy, as defined in paragraph (4) of subsection (f) of Section 18-8.15 of this Code;
(H) a school district’s Local Capacity Target, as defined in paragraph (2) of subsection (c) of Section 18-8.15 of this Code, displayed as a percentage amount; and
(I) a school district’s Real Receipts, as defined in paragraph (1) of subsection (d) of Section 18-8.15 of this Code, divided by a school district’s Adequacy Target, as defined in paragraph (1) of subsection (b) of Section 18-8.15 of this Code, displayed as a percentage amount.