Winnebago County Board approves redistricting, reducing county board members by one-fourth

The Rockford Register Star reported Thursday night, and today, that the Winnebago County Board reduced the number of county board members from 28 to 20, while increasing future pay to $8500 from $7500 for board members elected in November of 2012. So, the salary increase will not take effect until December 2012. The pay increase for the next county board will be the first increase since 2002 and the salary should not be increased again until 2022, for a raise of 0.67% per year over the 20 year period. The pay increase works out to $63.50 per month after taxes for over 120 meetings per year. The board cannot, by law, increase their pay directly, but can only increase it for the board following next year’s elections. Two years ago the Republican county board members gave back 10% of their salary to the county for a period of one year because of the economy. Since the board members cannot change their own salary, so they were paid their salary, and then gave back 10% to the county. The bottom line is, despite the increase in pay to the 20 county board members remaining after the election in 2012, the reduction of 8 members of the board, coupled with the elimination of all future county contributions into the Illinois Municipal Retirement pension for board members, resulted in a net savings of $72,000 for the county taxpayers. Each county board member’s constituent responsibility will increase by 50% from 10,000 to approximately 15,000 after the 2012...

read more

Tax cap law provides excuse for taxing bodies to raise taxes with declining property values

Property tax caps are getting a bum rap. Tax caps, when combined with rapidly declining property values, have simply become a convenient excuse for most local taxing bodies to raise our property taxes to the max to cover their spending habits! In a previous post, it was explained that an unintended consequence of the tax cap law allows the taxing bodies to receive the same amount of taxes collected last year, plus the rate of inflation or 5% whichever is less. When property values decrease, the taxing bodies can increase the rates to make up for the property value’s loss plus the rate of inflation. Inflation for this year’s tax bills was obtained from the previous 2009 December inflation rate, which was 2.7%. Property values declined in tax code (001) by 1.41%. The (001) tax code includes the Rockford school district, the city of Rockford and the township, Winnebago County, the Park district, the water reclamation district, Rock Valley College and some smaller municipalities. Therefore, the  property tax cap law allows for a rate increase to make up for the 1.41% decrease in property value in the (001) tax code area, plus the 2.7% inflation increase for a total of 4.11% for the extension in taxes collected by the taxing bodies, whether all of the taxes collected are needed or not. The tax rate for the city of Rockford and the Rockford School District account for 74% of the (001) tax bill and their taxes increased by 4.85% and 7.46%, respectively on my property tax bill. Under tax caps, taxing bodies do not include their borrowing costs or new properties built within their boundaries in the past year. But the reason our taxes are going up is the GREED (spending) on the part of the taxing bodies because the tax caps ALLOW, but do not require, the taxes to be increased. Rock Valley College is the case in point. The 45 cent levy has been maintained for years and it was no exception this year, even though taxes received by the college decreased when the tax rate was not raised. If RVC can do it, so can other taxing districts. All remaining taxing districts, except Winnebago County, raised their tax rates to the MAX in order to obtain every nickel they were entitled to under the tax cap law. They will protest that their actions were taken to make up for past years when inflation or the demand to purchase homes increased the assessed property values faster than the rate of inflation and the taxing bodies MISSED OUT on millions of dollars of extra revenue due to tax caps. Taxing bodies assume that all revenue due them should be levied since they would be “leaving money on  the table” – our money on their table! It is our elected officials who CHOOSE to raise the taxes – the law doesn’t force them to do it. Tax caps simply provide the means to raise our taxes without referendum – and most elected officials gladly indulge the process. Taxing bodies also realize that if they maximize the taxes collected this year, the tax base for subsequent years will be higher. Taxes calculated for those subsequent years will compound on this higher tax base resulting in even higher taxes in spite of declining property values. One solution would be to repeal tax caps in times of...

read more

Get ready for a shock – property tax bills arrive next week

Hope you have cashed in some of your gold or silver in the last few weeks at the current price, so that when you open your property tax bill next week, it will not be such a shock. Despite the declining value of your property, your taxes will most likely be increasing. An unintended consequence of the Tax Cap law allows the taxing bodies to receive the taxes collected last year, plus the rate of inflation or 5% whichever is less. When property values decrease, the taxing bodies can increase the rates to make up for the property value’s loss plus the rate of inflation. Inflation for this year’s tax bills is obtained from the previous 2009 December inflation rate, which was 2.7%. Property values declined in tax code (001) by 1.41%. The (001) tax code includes the Rockford school district, the city of Rockford and the township, Winnebago County, the Park district, the water reclamation district, Rock Valley College and some smaller municipalities. There are over 280 tax code combinations in the Winnebago County area covering the Rockford area, incorporated and unincorporated, Roscoe, Pecatonica, and all other municipalities in combination with Harlem or Winnebago school districts and other taxing districts. Therefore, the Tax Cap law allows for a rate increase to make up for the 1.41% decrease in property value in the (001) tax code area, plus the 2.7% inflation increase for a total of 4.11% for the extension in taxes collected by the taxing district, whether or not all of it is needed. But since it serves as the base for the following year under tax caps, plus inflation, it’s almost always needed! The tax rate in the (001) tax code area rose 6.32% from $10.638 to $11.3108 per one hundred dollars evaluation. If your assessment remained the same as last year, then your taxes went up 6.32%. But most property decreased by 1.41%, unless the value of your property increased. My taxes increased 4.53% from what was paid last year, even though the property decreased 1.41%. Therefore, the taxing bodies raised my taxes to make up for the 1.41% decrease in property value plus an additional 4.53% for a total of 5.94%, well above the 4.11% allowed by tax caps. The caps are for the overall taxes extended by a taxing district and individual properties will receive different treatment depending on the value of your property as a ratio to the total assessed property value of the district. A future post will show how many downtown commercial properties are underassessed, while residential properties make up the difference, since the total value of all assessed property in the taxing district determines the tax rate to meet the district’s needed tax extension. Winnebago County only raised their rate to receive what they had received last year – they could have raised it more. RVC actually received less than they received the previous year, maintaining a rate of 45 cents per hundred as they have for years, but the city and the school district, which account for 74% of the (001) tax bill increased my taxes 4.85% and 7.46%, respectively. What the …...

read more