Regarding our tax bills, some may think that the maximum tax rate allowed by the Property Tax Extension Limitation Law, (PTELL) is 5 percent or the consumer price index, whichever is less. I originally thought that too but our government has a different way of applying that law. Go to: www.revenue.state.il.us. In Search type PTELL, Select PTAX-1080 Technical Manual and spend a couple of hours to understand our governments’ thinking.
The PTELL limits individual taxing bodies but does not limit the overall combined tax rate and there are exceptions. New property value is excluded in the formula used to determine how the CPI will limit the tax rate. The formula is one that only lawmakers could devise and allows a school tax rate of 4.848 percent even though last year’s CPI was 1.5 percent.
Bonds and interest costs are excluded from the PTELL limit, which is why the District 308 school rate was 6.65728 percent on my tax bill, (others may vary). The PTELL worksheet for Kendall County revealed that 1.80927 percent of the school tax rate was for bonds and interest because the Levy amount for bonds and interest was 27.2 percent of the School Levy.
The state code has a limit on debt to EAV of 13.8 percent or 15 percent for fast growing districts, but Superintendent Behlow in 2006 managed to convince the Illinois Legislature that District 308 needed a higher limit because 308 would have approximately 25,000 students in 2012. Consequently the legislature took off the limit because a referendum had been passed.
Note that the 27 percent debt is 12 percent above what is allowed for a fast growing district! The total school enrollment in November 2011 was 17,175, 7,800, (31 percent) less than estimated by Behlow.
The cause for our high tax rate was the building of many schools by the 2006 Referendum, a decline in new construction and decreasing home values. The Behlow administration using PMA Financial Advisors projected revenues based on large EAV increases which would produce revenue, using the 2006 EAV as a base, projecting a 15 percent EAV increase in 2007 and then decreasing at 1 percent a year until leveling at a 10 percent increase per year, in 5 years.
Those projections were overly optimistic and now because of the decreasing EAV, which is now approximately at the 2006 level and still decreasing, thus a higher tax rate is required for the requested Levy amount.
Taxpayers should understand that the high tax rate now is mainly because of the bonds and interest payments required as a result of the 2006 Referendum. Current board members, except for Mr. Behrens, were not on the board in 2006, are not responsible for those costs and should not be blamed for the high tax rate.
Fortunately the new board members stopped the building of a third high school or the tax rate would have been even higher. The only way now to reduce the tax rate is to reduce expenses by cutting programs that are not absolutely necessary because the bonds and interest still has to be paid.
If you voted for the 2006 referendum, you gave your OK for these high taxes.
Leland H. Hoffer, Oswego