St. Charles-Area Levies, Tax Rates Being Formulated

From city to city, whether in Illinois or Wyoming, public officials often share, albeit privately, a similar thought when it comes to journalists writing about property taxes: The best tax levy story is the one the reporter decides not to write.

That’s because tax levies and the collateral issues — from equalized assessed valuations to the levies themselves to the tax rates — are a complicated morass of numbers and formulas that some look on as more like a street corner shell game than a bona fide, vetted process. Consequently, people react to journalists’ stories, whether or not they are well-written and accurate and that the bottom line is clearly communicated — with suspicion, at best, and at worst, with outright hostility.

That likely had something to do with why 3rd Ward Alderman Ray Rogina asked St. Charles Finance Director Chris Minick during the City Council Government Services Committee meeting a week ago to explain in simple terms that the journalists in the City Council Chambers could use to explain it to residents when they write their stories.

Rogina’s request made this journalist laugh — and not with any disrespect. This journalist has written about municipal and school district budgets in Wyoming and Illinois, and edited countless stories on the same subject matter for 17 years and has witnessed, time and again, just how volatile the issue can be, and how government officials dread this time of year because of it.

Local governments across the region are examining preliminary estimates of the 2012 equalized assessed valuation of property in preparation for setting the tax levy, which is the total amount of property taxes the government body intends to collect.

The tax rate is used to determine what individual property owners will pay based on the equalized assessed valuation of their property. At its very simplest level, the tax rate multiplied by the equalized assessed valuation of the property equals the amount of property taxes the property owner will pay.

The city intends to levy the same amount it did last year — in other words, the property tax dollars total will not change. But because property values are down 5.16 percent, the city will increase the tax rate to make up the difference. The result, Minick said, is that even though the tax rate is higher, the amount the average resident pays in property taxes will be unchanged.

The figures being considered by municipal, school district, park district and other local governments are all preliminary. They will be used in public notices advertising the public hearings toward the end of the year when final figures will be presented and then adopted as the new year begins.

Minick said the city’s preliminary estimate of the 2012 tax levy is $22.45 million, and noted the city is not obligated to collect that full amount — and that the city actually can change the levy at any time between now and the deadline for adopting the levy in spring 2013.

That $22.45 million levy represents three budget components, Minick told the council:

The operational levy of about $12 million, which Minick said the council has not changed since 2009.

The debt service levy, which increases 4.76 percent this year to $9.93 million. Minick emphasized, however, that while the city is required as a general obligation bond condition to include this annual assessment in its estimates, the City Council has for some time passed ordinances at the beginning of each year negating that general obligation bond levy, opting instead to use other revenues to cover the bond payments. That means no property taxes are used to pay that debt. That $9.9 million becomes an abatement that will not appear on residents tax bills.

The final portion of the levy represents a special service area, and that levy totals $452,396.

Minick noted the city’s equalized assessed valuation in 2011 was nearly $1.46 billion, a number that decreased to a little more than $1.38 billion in 2012.

The Government Services Committee approve the preliminary tax levy, which now awaits formal City Council approval. That approval will lead to a public hearing in late November or early December, and then the city administration will seek formal approval of the tax levy ordinance later in December.

A Community Unit School District 303 board committee will is scheduled to consider the school district's proposed levy later this week.

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