Questions and Answers

---

 

Why did the LTHS Board of Education approve a 5.68% tax levy? 

In the fall of each year, taxing bodies calculate their property tax levy for the upcoming tax year.  On October 19, the Lockport Township High School Board of Education approved a tentative tax levy reflecting a 5.68% increase.  The 5.68% increase is to ensure the district can capture property tax revenue from any new property built over the past year, including new facilities at CITGO Oil Refinery.  
District 205 has the potential to capture $1.6 million dollars in tax revenue from this new property.  Most of this amount is from CITGO. In order to capture this new tax revenue, District 205 must account for that in the tax levy.  A tax levy under 5.68% would mean revenue lost to LTHS District 205. 

Will the average taxpayer pay 5.68% more than the previous year?

No. In 1991, the state legislature passed the Property Tax Extension Limitation Law.  The law was designed to align new tax revenue received by a taxing body to the average growth in expenditures as defined by the Consumer Price Index (CPI).  The law assists taxpayers by capping the amount of revenue a taxing body can receive and thus protects the taxpayer from excessive levies by any taxing body.  For the 2011 Tax Year, the CPI is 1.5%.  This means that for Tax Year 2011, the amount of new revenue that a taxing body can receive over the previous tax year is 1.5%. The CPI applies only to existing property.  It does not apply to new property.

 

 

 

 

 

Why didn’t District 205 pass a 0% tax levy? 

In December, the Board of Education will adopt the tax levy and, in late March, the Will County Clerk will calculate a final tax extension.  During these three months, the County Clerk will finalize all of the new property and include that in the final extension.  However, the new property is applied after the 1.5% CPI calculation.  Therefore, in order for District 205 to receive the tax revenue due to new property, it must also account for the new revenue due to the CPI and existing property.  If District 205 passes a 0% tax levy, it would not receive any property tax revenue due to new property. It would be irresponsible of the Board of Education to not access $1.6 million dollars in new tax revenue that does not affect current property owners.

What happens if the new property is less than projected?

When District 205 prepares the tentative tax levy, we work with the assessor’s office to determine potential new property.  Because of the special circumstances relative to the CITGO property, the administrative team also received legal advice from the District 205 attorney.  The 5.68% levy increase accounts for all of the potential new property.   It is possible that when the county clerk completes the tax extension cycle, not all of the potential new property will be included in the 2011 tax year.  If the potential new property falls short of our projection, this means that LTHS District 205 will receive less money than requested in the tax levy.  The difference is not passed on to existing property owners.

Has District 205 made any budget cuts prior to approving the current tax levy?

In the past two years, District 205 has cut more than $1.5 million of its annual budget. These cuts include but are not limited to full and part-time staff reductions, cellular phone service reductions, elimination of bowling program for physical education, reduced technology purchases, textbook purchases, and department budgets.  In addition, District 205 delayed capital purchases such as new buses and other building improvements.

Why does the district need to make budget reductions?

Each year, LTHS District 205 updates its Five-Year Financial Projection Model.  Education is a staff driven industry and the number of staff is directly related to student enrollment.  Over the past three years our student enrollment has declined by 200 students.  This decrease in student enrollment necessitated the need to reduce staff.
In addition the economy has impacted the State of Illinois, causing both a reduction in state supported programs and late state payments.  The state is six months behind on its mandated categorical program payments to public school districts.  This is money that the school district will eventually receive, however the late payments cause cash flow problems for school districts as they rely on this money to pay expenditures.   The only way to offset the late state payments is to reduce expenditures via budget reductions.

---

 

CITGO Oil Refinery – A major industrial taxpayer located within the boundaries of Lockport High School District 205.  The refinery is completing building additions and these additions are considered new property coming onto the tax rolls for the first time.
Back to Question

Consumer Price Index - A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care. The CPI is calculated by taking price changes for each item in the predetermined basket of goods and averaging them; the goods are weighted according to their importance. Changes in CPI are used to assess price changes associated with the cost of living.
Back to Question

Existing Property – Represents improved property that is included in the current and prior equalized assessed value of the taxing district.
Back to Question

Mandated Categorical Programs – Restricted educational programs which are funded in part by revenue received from the State of Illinois.  Examples of Mandated Categorical Programs are: Regular Education Transportation, Special Education Transportation, Special Ed. - Private Facility Tuition, Funding for Children Requiring Sp Ed Services, Special Ed. – Personnel, Special Ed. - Orphanage – Individual, Special Ed. - Orphanage - Summer Individual, Special Ed. - Summer School, Bilingual Ed. - T.P.I. & T.B.E. and Driver Education.
Back to Question

New Property – Represents property that was formerly unimproved (i.e. Farmland or vacant land) that has experienced development and improvement and that is going on the tax rolls for the first time as improved property.
Back to Question

Property Tax Extension Limitation Law - The PTELL is designed to limit the increases in property tax extensions (total taxes billed) for non-home rule taxing districts.

Although the law is commonly referred to as "tax caps," use of this phrase can be misleading. The PTELL does not "cap" either individual property tax bills or individual property assessments. Instead, the PTELL allows a taxing district to receive a limited inflationary increase in tax extensions on existing property, plus an additional amount for new construction.

The limit slows the growth of revenues to taxing districts when property values and assessments are increasing faster than the rate of inflation. As a whole, property owners have some protection from tax bills that increase only because the market value of their property is rising rapidly.

Payments for bonds issued without voter approval are subject to strict limitations.
The collar counties (DuPage, Kane, Lake, McHenry, and Will) became subject to the PTELL for the 1991 levy year for taxes paid in 1992; Cook County was added for the 1994 levy year for taxes paid in 1995. Public Act 89-510 allows county boards to give voters in all other counties the opportunity to decide if the PTELL should apply to their counties. In addition, Public Act 89-718 allows county boards of counties that are subject to the PTELL by referendum to give voters the opportunity to rescind the PTELL using the same referendum process.

Under PTELL, increases in property tax extensions are limited to the lesser of 5% or the increase in the national Consumer Price Index (CPI) for the year proceeding the levy year. The limitation can be increased for a taxing body with voter approval.
The CPI used is for all urban consumers for all items as published by the United States Department of Labor.
Back to Question

Tax Extension – The actual dollar amount that the taxing body will receive after the County Clerk’s office applies the tax rate to the update Equalized Assessed Evaluation of the taxing body.  The extension can never be more than the levy, and in most cases extension is less than the levy amount.
Back to Question

Tax Levy - The tax levy is the formal request by a local government or school district for a certain amount of revenue to be generated by the property tax.
Back to Question