LM Oct.2017

PTELL districts utilize the same levy form, but their future levy is dependent upon last year’s tax extension multiplied by the current annual Consumer Price Index (CPI) number derived from the federal government. This fundamental difference to non-PTELL districts requires that these tax-capped districts cannot capture all of their current EAV but have to calculate a ‘limiting rate.’ ...The formula for determining the limiting rate is illustrated on the next page.

TaxLevies ... cont’d.

The first thing to remember is what the “aggregate levy” Includes. The defi- nition of aggregate levy is the entire levy for each fund except for Bond and Interest. Therefore, the ag- gregate levy requirement of 5 percent of the previous extension excludes any amount levied for Bond and Interest. The main issue in avoiding the publication of the “Black Box” is the last line of the required publication, which indicates the approximate percentage of the new levy from the previous levy. Districts that “balloon levy”

fundamental difference to non-PTELL districts requires that these tax-capped districts cannot capture all of their current EAV but have to calculate a “limiting rate.” This limiting rate when calculated will indicate how much property tax money is available to their district. Tax- capped districts do have one advantage over non-tax capped districts in that they can levy more than their individual “authorized rates” (rates limited by previous referendums), but not more than their individual maximum funds rates as approved by ISBE.

in excess of 5 percent are required to print this ballooned percent in the public notice. It is difficult to explain to taxpayers the concept of “balloon levying” when it is printed clearly in the public notice in the newspaper. Lastly, what is “balloon levying?” This is the concept that a district needs to ask for more funds to be levied than it actually expects due to the timing of the levy requirement. The levy must be provided to the respective county clerk(s) on or before the last Tuesday in December. The problem is that the districts Equalized Assessed Valuation (EAV) is not known until the spring of the following year, making the district guess as to how much can be levied. Therefore, almost all districts have to estimate or “balloon” their levy amounts based on incomplete knowledge at the time of the levy. PTELL districts utilize the same levy form, but their future levy is dependent upon last year’s tax extension multiplied by the current annual Consumer Price Index (CPI) number derived from the federal government. This

When districts calculate their “limiting rate,” they will apportion how much they will levy in their funds according to the limiting rate. The formula for determining the limiting rate is as follows: A. Multiply the previous year’s aggregate extension x the current CPI percent B. Subtract the value of new construction for the current year. (Note: by subtracting the value of new construction, you thereby increase the “limiting rate.”) C. Divide the result of step A by the result of step B. The result is the limiting rate. Example opposite page: The District’s total tax aggregate extension is $5,000,000. District’s total EAV for the current year is $210,000,000, of which $10,000,000 is new construction. While the levy process is certainly an important and complicated process for school districts, it is necessary for district superintendents to keep these requirements in mind.

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