O'Fallon Progress

Voters in favor of property tax caps, but they may not lower your taxes

While voters sent a clear message to the state legislature on property tax caps, a local school superintendent said it’s not enough.

O’Fallon residents overwhelmingly agreed that local governments should be required to seek voter approval prior to increasing the property tax referendum in an advisory non-binding referendum on Nov. 8.

The unofficial election result was 13,091 in favor and 1,418 against in the Nov. 8 election in St. Clair County.

The state legislature is considering an Illinois Property Tax Limitation Law (PTELL) revision and a property tax freeze. PTELL was enacted in 1991 and is currently in effect in 39 counties.

“The state of Illinois continues to fail in its responsibility to adequately and equitably fund schools,” said Darcy Benway, superintendent of O’Fallon Township High School District 203.

“As the state continues to experience a financial crisis, Illinoisans cannot rely on legislators to ensure funding for quality education for our students. If the ability for local communities to support schools also becomes ‘capped’ or limited, a school district’s ability to maintain current levels of service may be in jeopardy,” she said.

Benway said PTELL is a misunderstood piece of legislation.

“Many taxpayers are under the impression that if PTELL is implemented, their property tax bills will no longer increase,” she said. “Many taxpayers living in communities that have implemented PTELL have experienced increases on their property tax bills, especially during recent years when the Equalized Assessed Valuation (EAV) on property has declined. PTELL does not ‘cap’ property taxes paid by individual taxpayers. The ‘cap’ is on the total extension amount for taxing bodies which may or may not result in increases in the property taxes paid by each individual taxpayer.”

Superintendent Carrie Hruby said, “District 90 has one of the lowest tax rates of the elementary districts in the county. We pride ourselves on the fact that we also have one of the lowest per pupil spending rates in the state, but one of the best educational programs you’ll find anywhere.

“Our administration and board of education carefully watch our tax rate and spending,” she said. “The past few years have been challenging as the state funding was prorated and reduced, but District 90 has balanced its budget by keeping a close watch on expenditures. It is clear the community values that type of fiscal responsibility and transparency.”

A local chapter of Americans for Prosperity helped raise awareness about the complex issue prior to election.

Illinois has the highest property taxes in the country. The taxes have risen 2.5 times faster than inflation and 3.3 times faster than the median household income.

In an effort to stem escalating property taxes and additional sales taxes, AFP-Illinois created the Local Anti-Tax Initiative in 2012, which has assisted in fighting 186 tax increases in communities.

Dave From, statewide director of AFP-Illinois, previously said that with the recession that began in 2008, governments had fewer ways to pay bills but did not curb spending.

There are limits on how much local governments can collect from property and sales taxes, and to implement a new tax, raise an existing tax or issue a new debt (in the form of bonds), voter approval must be sought.

Anne Noble, managing director of Stifel Public Finance, the bond representative for O’Fallon School District 90, explained during an informational meeting prior to the election that PTELL does not cap or limit individual property tax assessments or individual property tax bills.

PTELL’s intentions are to limit the growth of property taxes. It caps the total dollar amount certain property taxes may increase from year to year—only by Consumer Price Index (CPI) or 5 percent, whichever is less, plus any new property added to the tax rolls each year. New property is new revenue on top of what is already collected.

PTELL slows the growth when property values and assessments are increasing faster than inflation and increases the growth of property taxes when property values and assessments are increasing slower than inflation, or decreasing.

In 2006, St. Clair County rate setting EAV was $3,167,564,886, a 9.8 percent change in EAV with a 2.5 percent change in CPI.

In 2015, the rate setting EAV was $3,414,470,377, a 0.15 percent change in EAV and a 0.7 percent change in PI.

The 10-year average was 1.80 and 2.06 percents, with an 8-year average negative 0.29 and 1.75 percents.

A tax bill on the $150,000 market value of a home is $3,520 at an 8.00 tax rate, which is was in 2005. Today, it is $4,313.

With tax-capped tax rates, the county clerk calculates the total operating tax rate for each taxing unit.