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Each school district is
required to certify annually and
return to the respective county
clerk, on or before the last
Tuesday in December, its
Certificate of Tax Levy. This
Certificate of Tax Levy is a single
page document that lists twice
the amounts requested to be
levied for the next year.
There is one item that
districts need to be very careful
in completing nearing the
signature part of the form. This
is the inquiry as to how many bond issues are
outstanding for the district. There have been
instances in which the incorrect number was provided
or no number at all. This could result in the County
Clerk levying an incorrect amount or no amount for
the payment of the bonds.
The schedule of principal and interest on bonds
that have been sold should have been provided to
the county clerk at the completion of the sale of the
bonds. This schedule of principal and interest is
utilized by county clerks in determining how much to
levy to pay these principal and interest payments.
The Truth in Taxation Act (35 ILCS 200/18-55)
affects all units of local government. The
requirements for this Act include publishing
information: “at least 20 days prior to the adoption of
its
aggregate levy
, for the current year exclusive of
election costs.”
Any district proposing to increase its aggregate
levy more than 105 percent of its prior year’s
extension, exclusive of election costs, must publish a
notice as prescribed by law, in a newspaper of
general local circulation. This notice is called the
famous “black box” for its bold print and requirements
for completion and publication in the newspaper.
The first thing to remember is that the “aggregate
levy” is the entire levy for each fund, except for Bond
and Interest. Therefore, the aggregate levy
requirement of 5 percent of the previous extension
excludes any amount levied for Bond and Interest.
The main issue to avoid in 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.
The levy process is certainly an important
process for school districts, making it is necessary for
district superintendents to keep these requirements in
mind.
Levy, Truth in Taxation requirements and balloon levying
Dr. William Phillips
IASA Field
Services Director
