Guide to state's property tax cycle

School districts and village setting 2022 levies that will determine 2023 tax bills

Ken Knutson | Last updated Dec 14, 2022 3:41pm
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The property tax is largest single tax in Illinois and is the major source of revenue for Community Consolidated District 181 and Hinsdale High School District 86. The Village of Hinsdale also relies on property taxes as a significant source of funding, as does the Hinsdale Public Library, although the village has several other revenue streams to support operations.

Taxing bodies are required each year to file a levy, or a request for property tax revenue. Setting the levy actually is the fourth of six steps in the property tax cycle as outlined below.

Much of the information on this page is taken from The Illinois Property Tax System: A General Guide to the Local Property Tax Cycle, published by the Illinois Department of Revenue, and documents created by local taxing districts. A glossary on Page 7 provides definitions for several terms.

Author Bio

Ken Knutson is associate editor of The Hinsdalean

Steps of Illinois taxing cycle

1. Assessment

Property is appraised to determine values for property tax purposes. The chief county assessment officer (county assessor in Cook, township assessor in DuPage) ensures assessment levels are uniform and at the legal level by applying a uniform percentage increase or decrease, otherwise known as “equalizing” assessments.

By law, most property is assessed at 33 1/3 percent of market value. Cook County is the exception; it has 13 classes of property that are assessed at anywhere from 16 percent (residential) to 33 percent (commercial) of market value. Property is reassessed every four years in DuPage and every three years in Cook.

2 Review of assessment decisions

County boards of review determine whether local officials have calculated assessed values correctly, equalize assessments within the county, assess any property that was omitted, grant homestead exemptions and review non-homestead exemption applications. Property owners and local taxing districts may appeal assessments to their local county boards of review.

3 State equalization

The Illinois Department of Revenue issues a state equalization factor for each county to bring the level of assessment to 33 1/3 percent of market value.

4 Levy

Taxing districts determine the amount of revenue they need to raise from property taxes and hold hearings if the levy increase is 5 percent or higher. All levies must be filed with the county clerk by the last Tuesday in December, which is Dec. 27 this year.

5 Extension

The county clerk applies the state equalization factor, calculates the tax rate needed to produce the amount of revenues each taxing district may levy legally, apportions the levy among the properties in a taxing district according to their EAV so tax bills can be computed, abates taxes as directed by taxing districts and prepares books for the county collector. The term “extension” also refers to the amount of taxes actually billed.

6. Collection and distribution

The county collector prepares tax bills, receives payments from property owners and distributes taxes to the local taxing districts that levied them.


 

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Village, library pass tax levies

Ken Knutson

Hinsdale trustees approved a 2022 property tax levy of $8.2 million Tuesday night, with $7.9 million subject to the Property Tax Extension Limitation Law or tax cap.

Trustee Matt Posthuma, in presenting the levy for adoption, explained that the amount incorporates $3.2 million in abated taxes for debt payments.

“This (total) amount is reduced by debt payments for six bond offerings where there is an alternate revenue source that’s been pledged,” he said.

The tax cap restricts taxing bodies to levying the lesser of the consumer price index and 5 percent, plus new construction, over the previous year’s extension. This year’s CPI is 7 percent.

Because the proposed increase over last year’s extension is 5.92 percent, a public hearing was held at the Nov. 15 board meeting as required. No one from the public spoke at the hearing.

In discussing the levy at the Nov. 3 meeting, Posthuma explained that the cap would be triggered this year.

“The increase is going to be 5 percent plus new construction,” he said. “This year, because inflation is above 5, we’re at the 5 percent cap.”

Village President Tom Cauley said the village was on good fiscal footing, an advantage with economic uncertainty on the horizon.

“The village remains in solid financial position at the end of 2022, which puts us in a strong position to enter next year, 2023, which many experts are predicting may be a year in which we have a recession,” Cauley said.

Property taxes make up about 38 percent of the village’s total revenue, although only about 10 percent of a resident’s property taxes go to the village.

Hinsdale Public Library

Hinsdale Public Library trustees last week unanimously approved a $3.5 million property tax levy.

The increase of 4 percent over last year’s tax extension is less than the 5 percent bump officials could have pursued. But Board President Julie Liesse said she and her colleagues decided not to go that route.

“We didn’t feel that we needed to levy to the max,” Liesse said. “We felt that gave us enough money to put in reserves for some capital projects on the horizon and give us enough for operational costs without putting an undue burden on taxpayers.”

Among the major projects in the offing is replacing the large first-floor windows.

But Liesse admitted to “animated” discussions among board members given the inflationary climate.

“It was definitely an interesting year,” she remarked. “We asked, “What do we need to operate? What do we need to keep that building going?’ We want to make sure that we have enough money in our capital reserve to cover any additional costs that may come up.”

In the end, all felt comfortable with the decisions.

“We have pretty healthy reserves,” Liesse said. “Having done those calculations, we felt like 4 percent allows us to fulfill some of those goals that we have identified in our strategic plan.”

Because the library is not its own taxing district, village trustees must approve its levy, which they did Tuesday night as part of the village levy.