What does 1.7 percent mean to you? For local taxing districts subject to the Illinois Property Tax Extension Law, it is the amount this year’s property tax levy on existing (not new construction) homes and businesses can increase without asking voters for more via a referendum.
This tax cap is a theoretical maximum — local taxing bodies do not have to grab their full 1.7 percent. They could tighten their budget belts and look for less, but then their base levy would not rise to the legal limit. To some this is leaving money “on the table” by limiting the gross amount upon which future increases are computed when percentage increases compound year over year.
Adding up to about 80 percent of the property tax bill, your local school district (probably 203 or 204), the College of DuPage and the Naperville Park District will each take the full 1.7 percent. COD, to its credit, is planning to take in less than it is legally allowed by then abating $8.8 million in unneeded referendum approved “debt levies.” School District 203 also has a potential debt levy adjustment up its sleeve, but we may not know if this will be granted until spring when the final request is presented to county treasurers for tax bill computation.
Not all “capped” taxing bodies are going for the full hit. Will County announced their levy increase will reflect only that portion attributable to new construction. DuPage County’s levy is projected to remain flat at $66.6 million. Among uncapped agencies, the city of Naperville will be looking for a little less, although increases in line items for pensions, Naper Settlement, and the library will reduce the discount somewhat.
Do not think I am opposed to all increased government spending. Many good programs need and deserve funding. Unfortunately, property taxes are the imperfect primary income source for many local government units tasked with service delivery. I question those budgets that seem to be built backwards, with projected income matched against a wish list of ways to disburse what can be collected. Adding insult to injury, our friends in Springfield and Washington always seem willing to mandate another local service or deliverable without concern as to who eventually foots the bill.
Considering that even though general indicators are improving and home values are inching up, the state of the economy is still far from robust. Social Security recipients are only receiving a 1.5 percent cost-of-living increase in 2014, so seniors will be net losers in the game of inflation adjustment.
Any increase in my home value is only recoverable by borrowing on the equity or selling the house, neither of which is presently desirable.
The mail in the beginning of May will almost certainly include a real estate tax bill more expensive than the one you received this year. Don’t blame the assessor for this; valuation is based on market factors. Look instead to the line items and ask why maximum base increases were required in that agency’s levy. These requests drive annually higher property taxes.
Bob Fischer is president of the Naperville Area Homeowners Confederation. Contact him at firstname.lastname@example.org