At its regularly scheduled meeting on November 17th, the Board of Education will consider its tentative tax levy for 2021. This tax levy will estimate the 2021 local property tax levy for the taxes due and payable in 2022. The Illinois Truth in Taxation Law requires that we publish an official notice in the local paper if the levy is 5% more than the previous year's actual taxes. You will see this notice in the Hancock County Journal-Pilot and the Hancock County Quill in December. This notice indicates the 2021 estimated levy is an increase of 7.74% of last year's actual taxes. The notice provides some facts, but not the whole story.
The levy request is a document filed each year with the County Clerk. It is an "ask for" type of document. That is to say, the district is asking for tax money up to the amount listed, but not more than the amount that can be generated by the approved tax rates. This is an important distinction. The tax rate is the amount of taxes paid on each $100 of assessed property value. The County Clerk multiplies the tax rate by the assessed property values of our district to determine how much tax money we are legally allowed to receive. The actual amount of tax revenues received (the extension) resulting from the levy is often not the same as the amount the district asks for.
If the amount asked for (levy) is greater than what the legal tax rate will generate, the district does not get the levied amount but gets only the lesser amount generated by the legal tax rate. If the district levy is less than what the legal tax rate will generate, the district will get only the levy amount and not the full amount possible by the legal rate because we did not "ask for" enough to get that amount.
The issue of the annual tax levy is very important to the school district operation. The school district obtains about 65% of its funding from local tax money. The Illini West High School District's 2020 total tax rate was $1.93 per $100 of equalized assessed valuation (EAV). Although the Truth in Taxation Notice shows that the levy will increase by 7.74%, the proposed tax rate for 2021 is estimated to stay approximately the same at $1.93 per $100 of equalized assessed valuation, something not mentioned in the Truth in Taxation Notice. This is possible because the total value of property in our district is estimated to increase by approximately 7%.
The word "equalized" is used because property values may be adjusted using a state multiplier. The equalized assessed valuation (EA V) results after the local assessment figures are increased or decreased by a state-determined multiplier. When a multiplier is assigned by the state, the state Department of Revenue has determined that our assessments are too low or too high, so they issue the multiplier as a correction. The multiplier may be a negative multiplier (reducing the assessment) or a positive multiplier (increasing the assessment). The multiplier does not apply to farmland. Farmland assessments are regulated to a maximum increase or -decrease of 10% per year.
As mentioned above, taxes are calculated by multiplying the tax rate by the assessed valuation. The Illini West High School District tax rate for 2021 payable taxes was officially $1.92881. The assessed valuation of property totaled $161,226,328. Multiplying 1.92881/$100 of EAV times $161,226,328 gives the total tax extension of $3,109,750. In December of 2020, the district approved a tax levy of $3,136,940. The district received $3,109,750 from that levy. The levy was higher than what the tax rates would generate. The school district received only what the legal rate will generate even though the levy was higher.
The Illinois State Board of Education maintains a database of school district tax rates. They provide Property Tax Relief Grants to school districts with high tax rates relative to other school districts as a means to lower the property tax burden on local taxpayers by replacing a portion of tax revenue with state funds. I have evaluated this option for our district, but the funding allocated from the state is provided to districts with the highest tax rates in order and is likely to be earmarked to the top 40-50 school districts on the list. IW tax rates are in the lowest 20% of tax rates across the state (691/851).
IWHS tax rates remain near 10-year lows and 11 cents lower than they were six years ago. Our district will continue to work to find a balance between maximizing opportunities for our students and minimizing the impact on our taxpayers.
Please do not hesitate to call me if you have questions about the school district in general or the tax levy process. There are many excellent things happening with the school district programs and we are happy to share that information with our public.
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