TAX LEVY FREQUENTLY ASKED QUESTIONS

What is a tax levy?

The amount of money a school district requests to be raised from property tax.

What is an Extension?

The process in which the County Clerk calculates the tax rate needed to raise the revenue (levy) allowable by law and certified by each school district in the county. The total extension is the product of the district’s equalized assessed valuation (EAV) multiplied by its calculated tax rate and is equal to the total property tax billings on the district’s behalf.

What is The Truth in Taxation Act?

Legislation approved and effective July 1981, that provides procedures for Public Notice and Public Hearings on tax increases greater than 105% of the prior year’s extension.

What is The Property Tax Extension Limitation Law?

The Property Tax Extension Limitation Law commonly referred to as “TAX CAP” or “PTELL” limits the increase in property tax extensions to 5% or the Consumer Price Index (CPI), whichever is less, not counting new construction or Bond & Interest Obligations.

How does the district determine its levy?

The law allows the district to make a prediction and ask for (levy) more taxes than it expects to collect, because at the time of the levy, new property EAV is unknown. In the spring of each calendar year, taxing bodies receive notification (extension) from the County Clerk of the actual amount they will receive.

How does the levy affect property taxes?

It is possible for taxes to increase even when EAV is dropping, because the taxing bodies generally choose to maintain or increase their extensions in an effort to collect sufficient funds to preserve their services.

Examples:

• ($100,000 (EAV)/$100) X 1.670 (tax rate) = $1,670 (taxes collected)
• ($98,000 (EAV)/$100) X 1.717(tax rate) = $1,683 (taxes collected)

Why would a District propose a levy that is higher than the limits of the Property Tax Extension Limitation Law (PTELL)?

Under The Property Tax Extension limitation law, if a taxing body does not ask (levy) for all funds that may be available (CPI +new property}, those funds can never be recaptured, resulting in permanently lost revenue for the district.

When does the Board of Education approve the levy?

District 45 will host a public hearing on the tax levy as part of their regularly scheduled Board of Education meeting in December.