Post # 8 – Levy Information
Eagle Vision II
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.
What is EAV?
EAV is the Equalized Assessed Value of real estate. This value is established by the county tax assessor’s office. These values are added together for all properties within a school district to calculate a total EAV figure.
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 the majority of JCCU1’s funding. Each year, the district requests a tax levy extension in order to cover the expenditure increases for cost of living increases, service and material increases, etc. A district relies on a property tax levy extension to cover revenues with expenditures, and the amount of the tax levy increase is based on many factors including maximum rates established by the Illinois School Code.
How is a property tax levy calculated?
The tax levy formula is based on maximum rates established by Illinois School Code, and it is created by a calculation that considers the allowable tax rate, the EAV of the properties within the district’s boundaries, and anticipated new growth and reassessment of properties by the supervisor of assessment within the district’s boundaries.
Is the property tax levy the JCCU1 Board approves a final figure?
No. The tax levy the board of education approves is not the final figure that will be extended against properties in the district. 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. A school district levy is comprised of funds, or “accounts”, with specific functions defined in Illinois School Code, such as education, transportation, operations and maintenance, etc. The total amount of these funds is known as the “aggregate” levy. Individual rates for most funds are subject to rate caps set in the Illinois School Code. These JCCU1 funds have been set to the maximum rate for many years. If a district sets a tax levy at 10% increase, but the county numbers that are released the following spring equate to a EAV increase of 5%, the district will only receive a 5% levy increase for funds set to a maximum rate. This equates to little to no effect on taxes on individual properties unless they were new or reassessed.
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 5%, but the figures released the following summer by the county could have resulted in a 10% increase in EAV, the district can not go back and change the levy to access the additional 5%. The revenue lost from the lower request would be permanently lost.
A district will request a rate higher than what might be anticipated in order to ensure they have the opportunity to receive all the funds 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 final EAV and new growth figures.
