O’Fallon property taxes are expected to increase

The amount in property tax that each resident pays to the City of O’Fallon will be increasing only slightly this year.

This comes in spite of a $22 million decrease in the city’s equalized assessed valuation (EAV).

EAV is part of an approach to taxation and property assessment which is supposed to ensure fairness to the taxpayers throughout the state.

The EAV of your property is the product of the assessed value of your property, both land and improvements, and the State Equalization Factor, which is set by the Illinois Department of Revenue (IDR). In Illinois, counties are required to “equalize” property tax assessments so that the median level of assessment is at 33 percent of fair market value. If the average sales price in the overall market is either higher or lower than 33 percent of assessed values, the prior assessed values will be increased or decreased by a factor that corrects this.

Sandy Evans, O’Fallon’s director of finance, attributed the 3 percent increase in property taxes, less than $15 this year, due to Senate Bill 107, which will provide a multi-tiered set of exemptions from local property taxes for homeowners who have a military service-connected injury, with a disability of at least 30 percent.

Last year, the city projected its total EAV at $636,751,000.

This year, O’Fallon requested projected a $6.4 million increase in its EAV.

Evans said if it weren’t for SB 107, the city’s property tax rate would have decreased, and the city’s EAV would have topped $660 million this year.

This year an O’Fallon homeowner of a $150,000 house will pay $451.66 in property taxes to help offset the decline in EAV. Last year, that same O’Fallon home owner paid $437 in city taxes.

Evans said these dollars go towards City services such as police, streets, snow plowing, community development and administrative functions of the city.

According to SB 107, Veterans with a disability of 30 to 49 percent, as certified by the U.S. Department of Veterans Affairs, will receive a $2,500 annual exemption. Those with disabilities of between 50 to 69 percent would qualify for a $5,000 yearly exemption.

Qualified homes of wounded veterans with a service-connected disability of at least 70 percent will now be exempted from all property tax payments.

Evans said O’Fallon’s EAV will decrease by $21 million as a result of the bill, which sailed through the Illinois House and Senate without opposition. Both chambers voted unanimously for it before sending it to Governor Bruce Rauner-R for his signature. Rauner signed the bill at the Illinois State Fair.

The law mandates that taxpayers granted an exemption under the new law must re-apply on an annual basis. The assessors or chief assessment officers for the Illinois counties where applicants live will determine the eligibility of residential property to receive the levels of tax relief implemented under the new law.

Census figures show there are nearly 28,000 veterans with service-related disabilities in Illinois. In addition, nearly 14,000 property tax exemptions were awarded to veterans in 2013, according to the IDR.

Another provision of the law provides tax breaks to veterans who make accessibility upgrades to their homes, like wheelchair ramps. Such changes wouldn’t increase the assessed valuation of the property for at least seven years after improvements are made.

“The vast majority of your property tax (72 percent) goes to schools (School District 90, OTHS District 203, and Southwestern Illinois College),” he said.

“Property tax comprises only 1 percent of the city’s budget and is ranked 10th among city general fund revenue generators.

This story was originally published April 1, 2016 at 8:26 AM with the headline "O’Fallon property taxes are expected to increase."