Each year at this time, government entities prepare a preliminary estimate of property tax revenue to be collected from taxpayers. The estimate is announced at a public meeting and voted on by the corporate authorities (City Council, School Board, Park Board, Library Board, etc.). State law requires a public hearing, after a notice of public hearing is published. The final amount of property taxes to be collected can be reduced from the preliminary estimate when it is finalized in the spring of 2013. However, it cannot be increased. For this reason, most agencies are conservative in their estimates.
Many people do not fully understand the property tax process. In addition, some members of the media may not completely or accurately report it, leaving some property owners even more confused.
Here are some key terms that property owners should know:
Property tax levy - the total dollar amount of property taxes to be collected by an agency. Any agency that collects property taxes must establish a levy. Government entities are primarily concerned with establishing a levy that provides them with the financial resources needed to fund their programs and services.
Assessed value - 1/3 of the fair market value of your property. The township assessor determines the fair market value of property, and then establishes the assessed value at 1/3 of the market value. Assessors are only concerned with establishing values and those values are established in January, after preliminary tax levies are approved.
Tax rate - the rate established by dividing the total assessed value of all property by the amount of the property tax levy. It can be expressed as a percentage of the market value, a value per $100 of assessed value, or a millage rate. In Illinois, rates are typically expressed as a value per $100 of assessed value. As an example, the city's property tax rate is currently $0.83 per $100.
While many residents would prefer that their property tax bills be reduced by the same percentage as the market value of the property, that is not the way the process works. The amount of property taxes paid by an individual is determined only in part by the value of your property. More important is how much money each agency needs to support the programs and services it provides to the community. In addition, the Consumer Price Index is also important because that is the amount that most government agencies are allowed to increase their levy from the prior year.
At this time, the City of St. Charles expects the taxable value (assessed value) of all property to decrease by approximately 4% for the 2012 tax year. In 2011, the taxable value declined by 4.5%.
As stated above, this does not mean that property taxes will be reduced by 4%. The value of property does not have a direct correlation with the amount of money needed to fund the services that the residents and businesses of the community need or want.
Last year, the City Council established the tax levy to support city operations (again, the total amount of property tax revenue to be collected) at the same amount as 2009. We intend to do the same this year. If approved, this means that the city's tax levy will not increase. It will be the third year in a row that the City has frozen the levy.
Finally, many people believe the City of St. Charles has the power to control the taxes levied by the school district, park district, etc. We don't. If you are concerned about the taxes levied by a certain entity, contact that entity. There are knowledgeable staff members at each agency that can answer your questions or provide explanations for the amount levied.