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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.
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.
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”
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
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.
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