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2015 Property Tax Freeze proposal

Be in the know of how our property taxes are affecting our community with PTELL school districts. Additionally, it is always good for a refresh on property tax, especially with the farm land assessment coming out in a few months. The examples in this article from 2015 give great detail and explanation.


Recent rumblings of a proposed property tax freeze have local taxing districts reacting. It’s no secret that Governor Rauner’s proposed Turnaround Agenda includes a freeze on

property taxes. More accurately, it includes a freeze on levies for all taxing districts across the state for at least two years.


So, how are taxing district taking the news? If you’re a taxpayer – not well! Senate Bill 318 has lead to a panic in Illinois’ taxing districts and is

causing them to raise tax rates, possibly without cause, as local units of government react to the political speculations. If passed, the bill would freeze the amount of money local units of government can get from property taxes for two years without voters approving an increase through a referendum. For example, if a school district asked for $500,000 (known as their levy) the previous year, they could not raise that levy amount above $500,000 as long as the freeze was in place unless local voters approved an increase.


While this bill is being considered, all the political grandstanding in Springfield has taxing districts reacting with a “just-in-case” approach and raising taxes while they can. With property taxes being the primary source of revenue for taxing districts, this proposal is

cause for alarm and has them “beefing up” their levy amounts to provide some financial cushion in their operating and personnel funds - just in case…


In the meantime, what does that mean for tax payers? You guessed it…higher property taxes. In this case, the wheels are already in motion. Taxing districts are not waiting to see if

this bill passes. The risk of a tax freeze has local units of government re-evaluating the amount they will be requesting in property tax dollars for their 2016 levies. By asking for more money they hope to limit the damage by increasing their base rate before levies can be frozen.


And, whether or not the bill passes this year, the threat of a property tax freeze in the future will likely keep those levies higher.


For many counties, this reaction by the taxing districts comes as no surprise. Those counties that have passed the Property Tax Extension Limitation Law (PTELL), also known as tax caps are familiar with the concerns and actions of their local schools, fire departments, police forces, and other units of local government. Senate Bill 318 is modeled after PTELL imposing restrictions on a statewide basis as opposed to a local tax cap.


Like PTELL, a statewide freeze would place limiting factors on a taxing district’s ability to ask for more money. PTELL’s limiting factor is an increase of no more than 5% from last year’s levy or an increase of no more than the current year’s consumer price index (CPI), whichever is lower. Under the proposed statewide freeze, the total amount of property taxes collected by taxing districts would not be allowed to increase without voter approval. However, in both cases the limiting factors do not apply to new

construction. Any new construction or improvements to existing structures would be added as an increase in the total EAV and assessed outside the restrictions of the limitations.


So, in the long run what might have started out as a property tax relief effort is turning into a

property tax increase as taxing districts prepare for a "freeze" - just in case.


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