Understanding the Property Tax Process
Understanding how your local public schools are funded is not intuitive. Its complexity can often create confusion if not properly understood. Now more than ever, our tax payers deserve for us to provide clear and understandable information regarding how the amount of tax dollars that they provide to our district is calculated and determined. Building this base of understanding will help to improve the understanding of the levy and tax process for our constituents and other concerned parties of interest and hopefully will eliminate misconceptions and mistrust.
The property tax cycle can be separated into five distinct steps that occur over a two year period.
All property is identified and assessed which sets the value of all real property that will be used in the taxation process. This process takes place in the spring of each year. The market and condition of property on January 1st determines its assessed value for that tax year. Assessment is primarily a township and county function, performed by elected officials. By law, property is to be assessed at one-third of its fair market value.
The Illinois Department of Revenue equalizes the assessments across the state by applying an equalization factor to each county. This process takes place in the fall of each year. State equalization applies a corrective multiplier to the valuations of each county to bring that county to an average assessment of one-third of the fair market value. The multiplier will be less than one if the assessments are found to average more than one-third of the fair market value. The most recent multiplier on the 2009 CM201U Taxing District (632), for the Tax Levy year 2009, was 0.958910.
Each taxing district then determines the revenue they will need to operate and they levy that amount. Local school districts determine the amount of their levy by identifying the amount of revenue that is needed to operate the district by using projections and a budgeting process. For a school district, if the levy exceeds 105% of the prior year’s property tax extension, the district must hold a public Truth in Taxation hearing in December of each year. The levy is then certified and sent to the county clerk. The levy process takes place in December of each year.
The county clerk uses the state equalization factor, assessed values of local property, and the amount of dollars being levied by the school district to determine the tax rate needed to generate the extension or amount of revenue levied by each taxing district. During this step the clerk is responsible for ensuring that the extension requested by each taxing district does not exceed their statutory limits. The new tax rate is then applied to all property within a tax district’s boundaries. This process takes place each winter.
The county clerk’s office prepares the tax bills in May and August, collects the property taxes by June and September, and then distributes the appropriate tax revenue in accordance with each taxing district’s levy during the summer.
More information concerning the levy, the tax process, tax calculations or important levy documents can be found by clicking on links related to this topic in the left hand column of this web page.