Budgets, Levies, & Debt

Tax Levy Presentation - 2011

Attached is the 2011 Tax Levy presentation given to the Geneva Board of Education by the Assistant Superintendent of Finance. The presentation lays out how a tax levy is created and recommends what the board should approve. 

The yearly tax levy must be presented and approved by mid-December of the current year to be effective with property taxes paid the following June.  One important fact is that debt repayment is not part of the levy. Debt repayment is considered a legal obligation and must be collected no matter what.  Even if it increases the levy above the Tax Cap Law, it must be collected. The collection of debt repayment and increased budgets are the major reasons why property taxes might increase even though your property assessment has decreased.

How is the tax levy derived?

It is a combination of the District's total property assessment (EAV), the Consumer Price Index (CPI), and expected new construction.  Most taxing bodies request the maximum levy available because the property assessment is not known until after the levy is approved. Levies are approved in December but final assessments are not usually approved until March of the next year.  This timing should change to EAV being finalized sometime before December when the levy is approved. 

How did the school district arrive at this year's levy?

In 2011, total EAV was $1.3 billion, down about 3% from the previous year. The CPI for December 2010 was 1.5%.  New construction was estimated at $13 million.  Jumble these numbers together and you come up with the total tax levy in dollars that the school district can request. The total amount is then broken down to each property based on their percentage of the total. 

In "English", this means that your property assessment decreased but the budget of the school district increased and the amount of the debt repayment increased, (which it did) then your taxes increased. You still had the same percentage of the District's EAV because every property assessment decreased in value just like yours. The EAV was lower but you still owned x% of the lower EAV, and taxes increased because the school district had to collect more money. Thus, in the past, your taxes never increased because your property assessment increased; they increased because of budget increases that each taxing body approved and debt repayment increased.

Within the next four years, the debt repayment for the Geneva Schools alone will increase by more than $10 million per year. The increase will be from between $14 million to $23-25 million per year.  With those types of dollar increases, your taxes will continue to increase while your assessment continues to decrease.  We haven't seen the worst of the property tax increases yet, but make no mistake, it is coming by 2016.

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