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Thousands of 2016 property tax bills will increase significantly (Part II)

To summarize Friday’s column, Rockford Township has significantly increased many township property assessments by resetting the overrides of successful complaints to the Winnebago County Board of Review, which have occurred since the last quadrennial assessment in 2011.

Consequently, thousands of parcels have been assessed considerably higher than they were last year, and coupled with another increase in the township tax rate, will result in significant property tax increases in 2016.

The tax rate is usually not determined until March of the year following property assessments, after municipalities have determine their tax levy requirements and after assessment complaints have been evaluated – the tax cycle.

The overall Rockford Township Equalized Assessed Valuation – EAV – decreased this year by an average of 3.5% based on a three year sales ratio– almost 10 times larger than the overall county EAV decrease of 0.39%.

A total of 50,502 township parcel assessments were lower, 12,972 parcel assessment didn’t change from the previous year and 9356 parcel assessments were raised, many significantly

If the Rockford township municipalities maintain their tax levy at the current levels, the 2016 tax rate will increase about 3.5% to offset the decrease in EAV. Therefore, the new rate is calculated to be last year’s rate of 14.9820 times 1.035 = $15.5064.

So, the 2015 property assessments are not only being reset to a much higher value but also within a tax rate environment that has increased from $11.3239 per hundred dollars of assessed valuation in 2010 to a $15.5064 calculated tax rate for 2016 – an increase of 37%.

My parcel assessment increased 24% this year – almost $30,000. My tax bill will increase from $4408.60 in 2015 to $6075.72 – an increase of 37.8% in a single year, even after subtracting exemptions!

A friend of mine’s assessment increased from $87734 to $109491, an increase of 24.8%, and using the 2016 tax rate, his taxes will increase $3802 to $16,047.73 next year from $12,245.40 this year. The Fair Market Value of his property increased $65,271 dollars in one year!

My friend’s annual property taxes are now 4.89% of his Fair Market Value and mine is 4.03%, some of the highest, if not the highest in the U.S. – try finding a higher one.

Some property owners who live on National Avenue will see their assessment values increase by more than $100,000 this year.

It’s the law, but a mill rate of 15.51% and taxes more than 4% of a property’s value in Rockford Township? The annual 4% tax on your property means that you will pay the full value of your property in taxes every 25 years.

Property taxes in our area are excessive due to increases in the tax rate allowed each year by tax caps permitting Illinois municipalities to raise rates, without voter approval, to maintain, or even raise, their respective tax levies up to the rate of inflation.

Fortunately, the 2015 assessments were not reset to their 2010 values, but the taxes are much higher than before this recession actually began, and the value of our homes were much higher in 2010 than they are today.

For example, the property tax on my residence was $5688.34 in 2010 when the parcel was valued at $180,700. The parcel is now assessed at $150,562, but the taxes have actually increased to $6075.72, even though my property’s value is $30,000 less.

The township tax rate will not decrease until the EAV increases in a positive direction for a significant majority of the properties in the township, not just special cases.

This reset in assessments is a double-edged sword, in that the properties are reset to a higher value. The other edge is tax caps, allowing the property tax rate to increase in a decreasing real estate market.

The best solution for all these Illinois statutes and regulations is that any future increase in tax rate or tax levies should be determined by voter referendum – or the passage of SB1046 (Property Tax Freeze) at the amount of the 2015 tax extension and not allow municipalities to raise rates and/or taxes without voter approval … ever!

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