Guest Commentary by Brian Pondenis; The Leader, November 12, 2009. Posted here courtesy of The Leader. [Author’s source information included for reference].
The Heritage School Board wants to raise your property taxes again. You may have seen a notice to this effect in recent newspapers. The notice indicates that Heritage wants an overall 6.82% increase in revenue derived from property tax and invites the public to attend a “Truth in Taxation” meeting.
Last November, a large turnout of Champaign County voters defeated a proposition to increase the sales tax by 1% to provide funding for school facilities. Unsatisfied with that result, the tax’s supporters had the issue placed on the ballot again – winning at an election traditionally attracting far fewer voters. School districts pledged to use at least a portion of the sales-tax funds to pay down debt, reducing property taxes. The Heritage School Board passed a resolution in April 2009 requiring that at least one-third of the new tax money be used to pay down debt. Superintendent Andrew Larson reaffirmed that the sales tax money would be used to reduce property taxes. [Source: April 22, 2009 News Gazette, page A-5]. The News-Gazette reported a projected property tax reduction for Heritage residents of $125. [News-Gazette, April 5, 2009]. There can be little doubt that the promise of property tax reductions induced voters to support the new tax.
Unfortunately, it appears that the Heritage School Board misled the public. While promising to use one-third of the sales tax money – conservatively estimated at $140,000 – to pay down building debt the proposed levy only reflects an $8,000 decrease. [Sources: Hearing Notice in recent Today paper; April 5, 2009 News-Gazette article; April 23, 2009 Leader article]. The public needs to understand how its money is being spent and all interested residents should attend the upcoming school board taxation meeting. Those we have trusted to run our school system need to keep their promises.
At a prior Truth in Taxation hearing, Superintendent Larson explained that “When a levy increases, it is indicative of increases in assessed values throughout the district, not an increase in tax rates.” [Source: October 19, 2006 Heritage Board meeting]. Actually, when a levy increases, it merely indicates the taxing body wants more money and in this case rationalizes that decision by claiming assessed values went up. This year, the school district wants an increased levy, but assessed values are not increasing. In fact, the only reason a special hearing is required is because the district is seeking such a large increase. [Source: Illinois’ Truth in Taxation law].
Many residents may not understand how property taxes are calculated; here is my understanding of how they work. First, the multi-township assessor determines a home’s fair cash value. That value is divided by three (for non-farm land) to give an “equalized assessed value.” Next, any exemptions, such as those for owner-occupants or veterans, are applied by subtracting the exemption amount from the equalized value. The result is the amount subject to property tax. For example, a home assessed at $100,000 would have an equalized value of 33,333.33. A homestead exemption of 5,500.00 subtracted from that amount gives a final taxable value of 27,833. Tax levies, such as those set by school districts, are simply amounts of money a taxing body decides it requires, and the tax burden is shared proportionally among property owners in the district. If assessed home values in a region increase, a taxing body can ask for more money while maintaining the same tax rate. In that case, tax bills are still higher. The problem with the Board’s anticipated levy is that it asks for more money when the Board resolved to decrease property taxes.
At another tax meeting, it was explained that, for example, a 5.1% increase in the school tax levy does not correlate to a 5.1% increase in property taxes, but instead results from a 5.1% increase in tax revenue available to the district. [Source: October 17, 2007 School Board minutes]. This is misleading, at least for the coming year. The Champaign County Assessor’s Office informed me that there will be no increase in assessed valuation for the Ayers-Raymond-South Homer townships. Therefore, the only possible way property taxes will increase is if the Heritage School Board increases its tax levy. The Board stated in its notice that it wants an overall 6.82% increase in funds it receives from property taxes. Since the bulk of property taxes paid by Heritage residents go to the school district, any increase in the tax would adversely affect local residents.
Raising taxes during a recession, when at least 10% of our nation’s workers are unemployed and when those who are fortunate to work have no wage raises, does not make sense. Many people are struggling to live on fixed incomes – indeed, even Social Security payments will not be increasing next year – and it seems fair to ask our local school district to do the same. In light of the windfall Heritage will receive in the form of additional sales tax money, the school district needs to explain why it needs an additional 8% in non-building funds and why residents will not receive a reduction in property tax as promised. Concerned residents are encouraged to attend the so-called “Truth in Taxation” meeting on November 18, 2009, at 7 p.m. at the Homer School Building. Those wishing to appear or present testimony should contact [the Superintendant].