The Riverside-Brookfield High School District 208 Board of Education is poised at its next meeting to pass a request for a 4.95-percent increase in its tax levy, while the Riverside Elementary School District 96 Board of Education will ask for only a 1.48-percent increase in its levy.
Does that mean that taxes for RBHS will increase more than twice as much as taxes for District 96 next year?
No, and welcome to the arcane world of the Cook County property tax system.
All Cook County local governments are subject to state tax cap laws, technically called the Property Tax Extension Limitation Law (PTELL), which limits how much local taxing authorities can increase property taxes without a referendum.
The law limits the annual increase of property taxes to the rate of inflation, measured by the increase in the consumer price index (CPI), or 5 percent, whichever is less, plus the value of any new property assessments which come onto the tax rolls in any given year.
So even though RBHS is asking for a 4.95-percent levy increase while District 96 is asking for just a 1.48-percent increase, the end result will be about the same — likely less than 1.48 percent for all local school districts. The CPI increase used for next year’s tax bills is only .08 percent, which means taxpayers should only see small increases for local schools.
Once the value of the new property is added to the tax rolls next summer, the Cook County Clerk’s office will establish the property tax rate, which will allow the taxing authorities to collect the maximum amount that is allowed by law.
The difference in the amount requested by RBHS and District 96 is merely represents a different way to get to the same end result.
Many school districts follow the RBHS approach of asking for just under 5 percent, the amount that necessitates a public hearing, knowing that in the end they will receive far less than 5 percent.
“That is more than what we would need to capture any new property,” District 208 Interim Chief Financial Officer Tim McGinnis told the District 208 school board in November. “But the county will reduce it if it is not justified. The county brings it down to .08 percent plus the value of new property.”
Since school boards have to pass their levies in December, but the final figures for the value of new property is not known until the following summer, many districts like to leave as big a cushion as possible, just to be sure that they have levied enough to be able to fully tax all the newly developed property that comes on to the tax rolls. They would rather be safe than sorry.
That’s why on Dec. 10 Brookfield-LaGrange Park Elementary School District 95 Board of Education will approve a 4.9-percent increase it its property tax levy.
“That margin allows us to capture any new growth that would come in,” said District 95 Superintendent Mark Kuzniewski. “And that’s the hard part about the levy. You don’t know what the new growth is, so you have to speculate and you don’t want to leave any new growth uncollected.”
But David Sellers, the interim director of finance and operations at District 96, has a different approach.
Sellers keeps close tabs on the new property coming on to the tax rolls and then comes up with an increase that he is confident that will capture all the new property and still leaves some safety room. That’s how he came up with his recommended increase of 1.48 percent this year.
Sellers’ calculations project that $3 million worth of new property will come on to the tax rolls in District 96, although up until now only $1.8 million is known about. He is confident that a 1.48 percent levy increase is enough to capture all the revenue that the district is entitled to collect.
Sellers believes just defaulting to 4.9 percent, as many districts do, sends the wrong message to taxpayers.
“This is an attempt at much greater precision than many school districts,” Sellers told the District 96 school board at their last meeting. “And I don’t think you are going to shock anybody when you say here is inflation and our request is 1.48 percent.”
Lyons Township High School District 204, where Sellers worked before retiring and coming to District 96 last year, will ask for a 2.26-percent increase it its levy.
The minuscule increase in the CPI this year will make it challenging for school districts to pay for contractually mandated salary costs and for other expenses that might be increasing at a greater rate than inflation.
According to Kuzniewski, his school district will realize about $75,000 in additional taxes from the CPI increase and only about another $7,000 in additional tax revenue to from new development.