Email from Greg Novak, Thu, Dec 17, 2009 at 9:15 AM

The tax levy is one of those things that that reminds me of Lord Palmerstons answer to the Schleswig-Holstein question:

 

“Only three people have ever really understood the Schleswig-Holstein business— Prince Albert – who is dead—a German professor, who has gone mad—and I, who have forgotten all about it.

 

Tax issues have the same response – however here is what I can tell you.

 

The basic tax levy per tax caps will go up .1% – one tenth of one percent – per the tax caps requirement that tax levy not exceed the CPI. (Consumer Price Index for 2008)

 Since total assesment of the district has gone up – most people will see their school taxes drop. The example below does not include new construction – as that is done as a seperate item.

 

Consider

 

Last years taxes were area wide on the following formula 

 

A (assessment 2008) x T (Tax Rate 2008) = Taxes Collected 2008

 

Example (Numbers from thin air)

A = 1,000,000.00

T = .0252

Taxes Collected = $25,200

 

This years formula would be – asuuming assessment changes upwards by 1% though normal reassessment of property so our new figures is

 

A (Assessment) = 1,010,000

 

Taxes Collected will be equal to last years 25,200 x 1.001 (CPI) or $25,225.20 as per tax caps

 

However Tax Rate will to .0249 to balance the equation.

 

A x T = Taxes Collected

 

 

However if the value of your home has gone up in the last year – your taxes could go up even  though your tax rate has dropped from .0252 to .0249 – but the value of your home is not something the school district has any authority over.

 

New construction is handled differently. The district must GUESS in December what the value of new construction placed on the tax rolls will be in the following June. Guess low and you will only get what you ask for – guess high and you will only get what you asked for – and you miss out on revenue.

 

We think that there is between $50,000,000 and $60,000,000 in new construction  – if we guess $50,000,000 and the answer is $65,000,000 – we effectively fail to collect the full taxible amount. If we guess $70,000,000, and the number is $55,000,000 – we don’t lose anything. Hence we will claim far more then we anticipate. From a PR point of view – its a Zero Sum game for the schol district.

 

The School Board DID not levy the $1,600,000 needed to pay off this years installment of construction bond debt fr Stratton, Barkstall and Central – so there should be some tax cut as well just from that on your hosue – say $15 to $30 dependig on the value of your home.

One Response to “Email from Greg Novak, Thu, Dec 17, 2009 at 9:15 AM”

  1. An incomplete historical snapshot of bond issues, tax levies and referenda « Citizen4: A citizen's blog about Champaign Unit 4 Says:

    […] The tax levy by the Board of Education therefore determines exactly how big that slice will be. 3 5 7 Gene Logas often bragged that Unit 4 has one of the lowest rates going.4 At the same time, Gene […]


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