TAX LEVY FAQs
What is a property tax levy?
A property tax levy is the amount of property tax dollars a school district requests in order to operate the district for the upcoming school year.
Why is a property tax levy important for a school district?
Property taxes are the primary funding source for school districts, and property taxes account for just under 70% of Smithton CCSD 130's revenues . Each year the district requests a tax levy extension, or increase, in order to match the expenditure increases for cost of living increases, service and material increases, and other expenditure increases. A district relies on a property tax levy extension to match revenues with expenditures, and the amount of the tax levy increase is determined by a formula established by Illinois School Code.
How is a property tax levy calculated?
The tax levy formula is established by Illinois School Code, and it is created by a calculation that considers the previous year’s tax rate, the current Consumer Price Index, the equalized assessed value (EAV) of the properties within the district’s boundaries, and anticipated new growth of properties within the district’s boundaries.
Is the property tax levy the Board of Education approves a final figure?
The tax levy the board of education approves is not a final figure. It is a request based on estimations of the items in the tax levy calculation above. Since the final figures for equalized assessed value of properties and new growth are not known until the spring of the year following the board approved tax levy, a school district must estimate what they believe the final figures will be.
If a school district uses estimates that are higher than the actual final figures for EAV and new growth, will they receive more money than they should?
A school district can only receive a tax levy based on the final figures released by the county. If the school district establishes a levy that is higher than the final figures, the district will only receive what is allowable by law, which is the final calculation based on the actual numbers as established by the county. For example, if a district sets a tax levy at 5% increase, but the county numbers that are released the following spring equate to a levy rate increase of 4%, the district will only receive a 4% levy increase.
What is a balloon levy?
A balloon levy is when a district requests a levy rate higher than the current projections to allow for unknown EAV and new growth.
Why would a district request a rate higher than what they believe the final figures might calculate for the actual levy?
If a district establishes a levy that is lower than the final figures released by the county, the district does not have a way of adjusting the levy to receive the additional dollars due to the district. Once a levy is filed, it can not be increased. For example, if a district filed a levy for 3%, but the figures released the following summer by the county could have resulted in a 4% levy, the district can not go back and change the levy to access the additional 1%. The revenue lost from the lower request would be permanently lost and has a compounding effect on all future levies.
A district will request a rate higher than what might be anticipated in order to ensure they have the opportunity to receive all the money allowable by the law. As stated above, a district can not receive more than what the law allows by the property tax levy calculation, so even if the requested levy is higher than the results of the final levy figures, the district will only receive what is established by the final EAV and new growth figures.
How much of my tax dollars go to the District?
Based on your home’s value, what community you live in, and other factors, this amount will vary. The individual tax bill will break down the distribution of taxes each homeowner pays.