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Politics & Government

The Best of Beth Bales: Lower Property Values Don't Necessarily Mean Lower Tax Bills

Surprised that decreasing home values didn't mean a reduced tax bill? Here's why.

  • Editor's note: Beth Bales is taking the week off, so we're re-running some of her earlier columns in her usual Tuesday, Thursday, Saturday time slot. This entry originally was published May 7, and we think it's appropriate to run now—because the second installment of your property tax bill due Sept. 1.

 

By now Genevans have received their tax bills. And they may be saying, “What the heck? How can the bill be up, when home values are down?”

“Tax bills go up, because governments spend more money,” said Mark Armstrong, Kane County supervisor of assessments. “It’s as simple as that.”

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For years, he said, people have equated higher tax bills with higher assessments. “That hasn’t been the reason since 1991,” he said. “That relationship has been severed.”

The disconnect came about with passage of the Property Tax Extension Assessment Limitation law, which generally limits taxing bodies to increases of 5 percent or the rate of inflation, whichever is less. 

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For this year, the rate of inflation was 2.7 percent. “And a lot of levies went up 2.7 percent,” Armstrong said. “If assessments go up, that levy is still going up 2.7 percent. If assessments drop, the levy can still go up 2.7 percent.

“There is no longer a direct relationship between the assessment and the tax bill.”

In fact, in a presentation he gives on understanding the property tax process, he outlines five myths about assessments and taxes.

Myth No. 1 is “Your equalized assessed valuation and your property tax bill have a direct relationship: If the EAV changes by 5 percent, then the taxes for that parcel change by 5 percent.”

Wrong, Armstrong said. Taxes go up because levies go up. 

In his presentation, he happens to use Geneva as an example. This year the Geneva School District had a levy of nearly $75 million, and a total assessed valuation of $1.4 billion. The rate is going to be the relationship between that assessed value and the levy, he said. Divide the levy by the assessed valuation, and get the rate. “And each person’s bill is going to be based on the pro-rated share of the assessment.”

In short, he said, if there’s no change in assessments, taxes will increase or decrease, as the total amount of taxes sought increases or decreases. 

Tax bills are based on the “relative percentage” of the assessed valuation, and not the valuation itself.

Global valuation changes —such as when property values across the county decrease—will NOT impact tax bills. But individual valuations WILL. Those whose properties have been reassessed downward will pay less in taxes than they would have, had that reassessment not taken place. 

People who feel their assessments are too high (though the time is past to appeal that verdict for this tax bill) or incorrect should start with the Geneva Township assessor, Denise Lacure.

In looking at a 2010 Geneva tax bill, the rate for all but one taxing district went up from 2009 to 2010. (Waubonsee Community College pension was the sole exception; there is no money going to that this year. Of course, on this bill the amount for last year was only $3.24, so it’s not like it’s a big savings.) 

School districts get the lion’s share of any tax bill. The rate for Geneva School District 304, at least as measured by this bill, increased 9.4 percent, from 4.697 to 5.142. That helped boost the total overall rate increase more than 8 percent. 

Across Kane County, “67 percent of Kane County homeowners have a bigger tax bill than last year, even though the billable assed valuation went down.”

And how many people are screaming at him?

“All of them,” he answered. “But that’s OK. It’s part of the job.”

Kane County has a quick guide to taxes. And people also can view and search for tax bills online—including neighbors’ for a handy comparison of bills.

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