It's that time of the year again-
What time? you ask. Property tax time. The tax bills are expected to be mailed out May 1 with the first installment due on June 3 and the second on September 3.
As you might recall, for the last several years in Newport Township the general assessment has decreased while your tax rate increased. How can that be?
There is a simple answer to this maddening phenomena: Many taxing authorities levy a fixed dollar amount which they will get regardless of what happens to your assessed valuation. If your total real estate tax bill is about $6,000 (as an example) our village gets about $15. Who gets the rest? Your tax bill will answer that question.
Property taxes made simple- You just received your 2014 property tax bill in the mail and are confused as to how it all works. Here, in layman's terms, is an explanation: First, it's for year 2014 although it is due in 2015. In Illinois, property taxes are a year in arrears. Accordingly, in 2016, you'll receive the tax bill for 2015. It all starts with the assessed fair market value of your property. I obtained the 2013 tax bill (2014 was not yet available at the time of this writing but this illustrates the point) from a resident who lives pretty much in the center of Wadsworth. The assessed fair market value of the property was $247,425. The next step is to calculate the equalized assessed valuation. Simply, it's 1/3 of the assessed fair market value. For the property discussed above, that would be $82,475. (Not to be too confusing, there is in Illinois something called the "state multiplier". It's a method used to make market values across the county more comparable, a means to make assessed valuations more comparable. Here, it is minor in amount (2 to 3%) and therefore I won't deal with it now.) From the equalized assessed valuation, there are many possible deductions, such as for general homestead, senior homestead, farmland, veterans, etc. In this case, the property owner is eligible for a $6,000 homestead exemption, which reduces the $82,475 to $76,475. This amount is called the "taxable valuation." For this particular property owner, the tax rate was $7.58 per hundred dollars of taxable valuation. In other words, you divide $76,475 by 100 and you get $764.75. $764.75 times the tax rate of $7.58 equals $5,796.81, which was the exact amount of this property owner's tax bill. How was the tax rate of $7.58 determined? Honestly, it's a complicated process with two component parts. In this case, there are 17 different taxing authorities to which this property owner's tax dollar goes. There are schools, county government, a forest preserve district, a road and bridge district, pensions, the Village of Wadsworth, etc. For the first component, some taxing authorities submit a levy for a fixed amount of taxes, say to pay the principal and interest due that year on bond issues. Your share for this amount is fixed, so to speak, regardless of your taxable valuation. That's one reason your valuation could decrease while the total tax due does not. The same reasoning applies to the six different pension plans that you pay for. There is an annual funding requirement that stays the same regardless of what happens to your valuation. For the second component, other taxing authorities might submit a simple tax rate that is applied to the taxable valuation. If that valuation goes up, the taxing authority gets more. If it goes down, then it gets less. Just as a parenthetical note, in the Village of Wadsworth, there are three different fire protection districts and several different school districts. Therefore, not all Wadsworth residents will have the same rate of $7.58. Our area suffers from "gerrymandering", which is a maddening process of creating different local governmental boundaries with no geographical conscience so as to achieve some political advantage. This nightmare was created about 200 years ago in Massachusetts. |
