2021 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.
- Tax Levy: The revenue requested by a public taxing body.
- Tax Extension: The actual revenue received by the taxing body.
- PTELL (Property Tax Extension Limitation Law or “Tax Cap”): Limitation on the District’s actual revenue received (or extended) at the lessor of 5% or prior year consumer price index (CPI). The CPI that applies to the 2021 tax levy is 1.4%.
- EAV: Stands for Equalized Assessed Valuation, which is approximately 1/3 of the property market value.
- Tax Rate: Percentage applied to EAV to calculate the tax extension.
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.
The basic formula takes EAV (including any new property growth in the district) and multiplies it by the tax rate. This equals the tax extension. This formula is difficult for taxing bodies to calculate precisely because two of the variables, the EAV and the tax rates, are not available before the tax levy is due to be submitted to the Cook County Clerk’s office. Each year we make an educated guess to ensure we secure enough revenue to provide for the educational needs of District 111 students.
Why would BSD111 raise taxes over 3.7%?
While the notice in the newspaper reports the tax extension requested to be 4.94% (or 3.71% including the debt service levy figure), the typical homeowners’ tax extension from BSD111 is limited to 1.4% by law. This assumes the property has not changed from the prior year. Burbank School District 111 is asking for an amount higher than the CPI due to unknown new property (additions to the EAV) to enter the tax rolls that we want to capture and final existing EAV. The actual new growth figures and property values will not be available until late spring of 2022, but our levy is due by the end of December 2021. To meet the December deadline we must make an educated guess regarding our overall tax extension.
Is the property tax levy, that BSD111 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.
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. A district cannot 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.
What happens if BSD111 doesn’t levy enough?
If we guess wrong or otherwise miss the revenue target, we would be unable to receive the full amount of property tax we need to continue the programs and services essential to a high-quality school system. Since each year’s levy is calculated on the prior year’s extension, this mistake would be compounded each future year. Over 67% of BSD111’s revenue is derived from local property taxes, so this mistake would be costly and detrimental to the students we serve.
What were the historical BSD111 tax levy % increases asked for versus tax extension limits?
|2014: Levy Request: 5.30% – Levy Cap: 1.50%
|2015: Levy Request: 1.00% – Levy Cap: 0.80%
|2016: Levy Request: 4.40% – Levy Cap: 0.70%
|2017: Levy Request: 2.10% – Levy Cap: 2.10%
|2018: Levy Request: 2.65% – Levy Cap: 2.10%
|2019: Levy Request: 4.60% – Levy Cap: 1.90%
|2020: Levy Request: 4.40% – Levy Cap: 2.30%
2021: Levy Request: 3.71% – Levy Cap: 1.40%