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2011 Tax Levy Hearing Board of Education Meeting December 19, 2011 1.

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Presentation on theme: "2011 Tax Levy Hearing Board of Education Meeting December 19, 2011 1."— Presentation transcript:

1 2011 Tax Levy Hearing Board of Education Meeting December 19, 2011 1

2 Truth-In-Taxation Act Requires Districts to ESTIMATE the dollar amount to be collected from property taxes Disclose proposed increase if aggregate dollar amount (levy) is more than 105% of prior year’s extension Publish Notice in Newspaper Hold a Public Hearing 2

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4 PTELL – “Tax Cap” Law Property Tax Extension Limitation Law County Clerk Limits Actual Increase CPI 1.5% Proposed Estimate 4.6% Limits the increase in property tax extensions to 5% or the CPI whichever is less. 4

5 Five Year Levy Comparison (what we ask for vs. actual dollars received) 5

6 FAQ: Why is the amount extended less than what is requested? In order to maximize revenues, we prepare our levy by estimating the amounts at a higher level than anticipated. Our reason for doing this is because property growth in the district is an unknown. Equalized Assessed Valuation New Construction Expired TIFs, Annexation, Disconnection 6

7 Historical Tax Rates for SPS 186 Actual 2010 Tax Rate $4.6422 7

8 FAQ: If my tax rate for the school district has basically remained steady and we are under tax caps, then why am I paying more and more taxes? Two reasons could account for this: 1.The assessed valuation on your property has increased and you are therefore paying the tax rate per $100 on a greater value. 2.Other municipalities also levy taxes and are included on your tax bill. Those municipalities may have increased their rate. 8

9 Average Homeowner Property Tax Increase Impact Market Value EAV 2009 Tax $4.5398 2010 Tax $4.6422 Increase $100,000$27,333$1241$1268$27 $150,000$44,000$1998$2042$44 $200,000$60,667$2754$2804$50 $250,000$77,333$3511$3590$79 Assumes $6000 homestead exemption 9

10 Property Taxes Represent 42% of Budget 10

11 2011 Levy Request by Fund Education Fund$ 59,646,721 Operations & Maintenance$ 11,582,776 Transportation$ 4,725,025 Special Ed$ 1,281,228 Tort$ 3,183,174 Leasing$ 890,343 Municipal Retirement$ 2,655,631 Social Security$ 2,098,576 TotalLevy $ 86,063,474 11

12 Levy Process Timeline November 7BOE Adopts Tax Rates December 6Tax Hearing Notice Published in The State Journal Register December 19Public Hearing Adoption of Tax Levy Resolutions December 21-28File Certificate of Levy with County Clerk 12

13 Questions and Answers Springfield Public School District 186 Sangamon County 13

14 What is the Tax Levy? Tax Levy is a request for property tax dollars based on the estimated needs of the District It’s generally estimated to insure generating maximum revenue under the tax cap. You cannot receive more taxes than you are entitled to under the tax cap. The Bond Levy (automatically extended), equals the principal and interest due in the following year on the District’s outstanding debt. 14

15 Tax Levy Tax Levy requests will be reduced under these conditions: If a fund’s tax rate is restricted (Education, Building, Transportation, Working Cash, Life Safety, Leasing), the tax levy in that fund can be reduced. If the aggregate levy request generates a levy in excess of the amount allowed under “tax caps” the levy and subsequent overall tax rate will be reduced. 15

16 How Is Estimated Tax Levy Determined? Equalized Assessed Valuation (EAV) New Property Growth Consumer Price Index (CPI) 16

17 Equalized Assessed Valuation (EAV) FYLevyEAVDiff ($M) Change (%) 01-0220001,469,931,480$11.40.78 02-0320011,527,272,163$57.33.90 03-042002T1,566,700,503$39.42.58 04-0520031,617,725,772$51.03.26 05-0620041,629,936,528$12.20.75 06-072005T1,695,261,560$65.34.01 07-0820061,773,977,471$78.74.64 08-0920071,833,250,647 $59.33.34 09-102008T1,862,188,492 $28.91.58 10-11 2009 1,895,446,220$33.3 1.79 11-122010 1,919,953,759 $24.5 1.29 17

18 Historical Consumer Price Index 18

19 How is the Final Extension Determined? The Sangamon County Assessor’s office establishes property valuations. Taxing districts file their levy request with the County Clerk’s Office. To produce the revenue requested, the County Clerk uses the levy to determine the tax amount to be “extended” against all properties located within the boundaries of the taxing district. 19

20 How is the Final Extension Determined? The County Clerk’s Office determines the rate needed per $100 of taxable value to generate the requested revenue, based on the value of all taxable property within the district boundaries. 20

21 Basic Tax Formula Per $100 of Equalized Assessed Valuation (EAV) X ____________ (Tax Rate) = TAX EXTENSION 21

22 Limiting Rates Limits under Illinois law can restrict the revenue, either through statutory maximum rates for certain purposes and/or through “tax caps,” which limit the total amount extended. Extension limits are not applied to funds needed to pay bonds 22

23 Tax Extension Limiting Rate Basic Algebraic Formula: (Prior Year Extension x (1+Lesser of 5% or CPI) (Total EAV – New Construction – Expired TIFs) 2009 Extension = $79,210,698 CPI = 2.7% EAV= $1,933,355,144 $1,919,953,759 New Construction = $21,136,709 $17,294,964 Limiting Rate: 4.208% 4.276 Max $ from capped funds = $82,238,751 $82,089,543

24 Glossary of Terms Springfield Public School District 186 Sangamon County 24

25 Glossary of Terms Assessment – the process of valuing real property for tax purposes. Assessed Valuation – the taxable value placed on the property by the local assessor. 25

26 Glossary of Terms Collection - receipt of property owners’ payments by the county treasurer. Distribution - payment of tax receipts by the county treasurer to schools 26

27 Glossary of Terms Equalization – adjustments to local assessed valuations to bring about a median level of one-third of fair market value. Equalized Assessed Valuation (EAV) – a property’s valuation after county and state equalization are performed. 27

28 Glossary of Terms Extension - the process by which the county clerk calculates an agency’s tax rate. The total extension is the product of the agency’s EAV multiplied by its calculated tax rate, and is equal to the total property tax billings on the agency’s behalf. 28

29 Glossary of Terms Levy - the amount of the school district’s need for property taxes for each fund as certified in the board of educations annual levy resolution in December. Multiplier - the factor applied to a township or county’s total assessed valuation to equalize it to one- third of fair market value, the rate specified in the law. 29

30 Glossary of Terms Tax Base - the total equalized assessed valuation (EAV) of a school district. Tax Cap - shorthand for the Property Tax Extension Limitation Act, which was enacted to control the growth of property taxes of schools and some other units of governments. 30

31 Glossary of Terms Tax Rate - the amount of property taxes extended, expressed as a percentage of EAV (e.g. a rate of 2.50 percent or 2.50 computes to a tax bill of $2.50 per $100 EAV.) Tax Year - the calendar year in which property is assessed and the levy is made. Taxes are billed, collected and distributed in the following calendar year. 31

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