Local taxing districts get over $45,000 extra in taxes; state wants it back

Taxing districts in O’Fallon and Shiloh will have to repay $45,657 in combined tax funds back to the state because of a calculation error, the Illinois Department of Revenue (IDOR) announced in a statment released last week.

The IDOR said overpayments of personal property replacement tax funds were issued to more than 6,500 taxing districts, including 10 taxing districts in O’Fallon and Shiloh, starting in 2014.

The error was due to a change in tax forms that led one tax to be mistaken for another, according to the IDOR.

The change was part of a “modernization initiative.”

In total, the 6,500 taxing districts are required to repay the state approximately $168 million.

The biggest overpayment in O’Fallon was O’Fallon School District 90, which received $18,082, more than it was supposed to.

Other overpayments included:

<bullet> O’Fallon School District 203, which was overpaid $17,858;

<bullet>the City of O’Fallon, which was overpaid $4,436;

<bullet>O’Fallon Township Road and Bridge, which was over $4,339;

<bullet>O’Fallon School District 104, which was overpaid $4,333;

<bullet>Shiloh School District 85, which was overpaid $1,918;

<bullet>O’Fallon Township, which was overpaid $1,376;

<bullet>Shiloh Valley Township and Bridge, which was overpaid $1,228;

<break>O’Fallon-Shiloh Valley Caseyville Fire Protection District, which was overpaid $862; and

<bullet>the Village of Shiloh, which was overpaid $512.

District 104 Superintendent John Bute and District 203 Superintendent Darcy Benway on Monday expressed “disappointment and surprise that the Department of Revenue made an error this large.”

“I would like to see an audit of the Illinois Department of Revenue be conducted to verify the error,” Benway said.

Bute said he expects an audit will be conducted.

“I would expect an audit is coming soon,” he said.

Bute said it is his understanding the money taxing bodies will be be paid back in the form of reduced future payments.

In the meantime, some local taxing bodies are looking for ways to recoup the difference.

“Our funding will be reduced until the difference (over awarding) has been made up,” District 85 Superintendent Dale Sauer said.

But the repayment is just more salt to a state funding wound for local taxing districts that continues struggling to heal.

District 90 Superintendent Carrie Hruby said she understand the need to repay those overpayments. But, she hopes the state will work with taxing districts on a plan to repay them.

“District 90 was only overpaid $18,000, which is minor compared to some of our peers who were overpaid $200,000 and more,” Hruby said.

There are 10 school districts across the state, which must repay more than $1 million.

The funds awarded by the state are collected through Personal Property Replacement Tax, which was implemented in 1979 to recoup losses in “personal property taxes on corporations, partnerships, and other business,” according to the Illinois Department of Revenue.

Today, those entities, as well as utilities, instead pay small percentages on income and invested capital.

This story was originally published May 4, 2016 at 3:21 PM with the headline "Local taxing districts get over $45,000 extra in taxes; state wants it back."