For any of you not familiar with Ted, he is a very intelligent man who writes occasionally in the Rockford Register-Star newspaper. He has extensive experience with the Rockford school board finances as well as Rockford College and is highly thought of in governmental circles. A pull no punches guy, he calls it as he sees it. Below is an excerpt from this Sunday’s piece discussing tax issues. His insightful analysis may come as a surprise to some. Enjoy………
"Many people think that tax caps are a limit on the property tax rate they pay each year. That’s not true. Actually, tax caps are a limit on the growth in total property taxes collected annually by each taxing district, to the rate of inflation or 5%, which ever is less. Tax caps do not limit the tax rates, nor the property tax paid by any individual homeowner, tax caps only limit growth to the taxing bodies.
So, even if property values drop, the tax rates can go up to a) their statutory limits as approved by referendum or the maximum limits set by the state or b) increase by an amount that allows the total taxes collected to increase by the rate of inflation, as determined in December of the previous year.
In December of 2009 the Consumer Price Index CPI was 2.7%. Therefore, the tax rate of a taxing district may increase until the taxes collected by the various districts this year are 2.7% more than they were last year, as long as the statutory limits are not exceeded."
Please keep this in mind when approached with projected savings by the more government group. Food for thought.
Ken Dillenburg