Quality Education There has been a lot of controversy in our district regarding the 2002 Tax referendum and how the monies were collected. The following is our best explanation of the District's actions.
First, a little Illinois Property Tax Math 101.
In 1991, the Illinois General Assembly passed a mandatory tax cap spending bill (PTELL) for the 5 collar counties surrounding Chicago. The bill capped the increase on property taxes to be the lesser of 5% or the rate of inflation (measured by CPI). If a district wants more money than the tax cap will allow, it must go to their residents and ask for it.
In 2001, after 10 years of operating under the tax cap and undergoing continued strong growth, Naperville school district 203 was operating at a deficit. The district then went to the voters and asked for a property tax rate increase to generate additional revenues to eliminate the deficit (actual and projected), that is, to bring the budget into balance without sacrificing any programs.
The rate increase, as allowed by law for a referendum, was above and beyond the limit imposed by the tax cap; in other words, it was not subject to the tax cap. The law also specified that the rate increase could be imposed over a period of time, up to five years.
In the 2002 referendum, the district asked for up to a $0.53 tax rate increase on every $100 of equalized assessed value (EAV). The referendum was passed and, by law, the district had 5 years to implement the increase. District 203 residents saw the effect immediately on their 2002 bill because property taxes are collected in arrears; the 2002 bill is for calendar year 2001 taxes.
The district chose to implement the increase in stages, assessing $0.4511 in the first year, followed by another $0.067 and $0.0487 in the next two years, and a $0.007 decrease in the fourth year. After that, the board decided not to take further tax rate increases, effectively walking away from the fifth and last year of the referendum. Over this four year period, the base rate was increased a total of $0.4995, just under fifty cents--out of an allowed $0.53.
The district followed the law and all established procedures for the referendum. We believe that there were no improprieties, let alone intentions to deceive as have been implied by some of the candidates.
There has been a lot of consternation about the question of over collection. The question of whether you view the increase favorably is based on what you choose to hang your hat on: the 53 cent tax levy rate increase or what the total dollar amount that the 53 cent rate increase translated to on your tax bill. The district's example was a $300,000 home where the rate increase translated into a tax increase of $511 in the first year. At this point, there is agreement on both sides. Starting with the second year the disagreement begins.
But the rates are only one half of the picture. The other factor that determines how much we pay is the equalized assessed value (EAV) of all the existing properties in the district. This number multiplied by the tax rate determines the amount of money that the school district gets. The same rate multiplied by the EAV of our homes (minus any adjustments; senior exemption or residential exemption) yields the school tax that we individually pay.
Go to Page 2 The Referendum & Taxes