Inflation means 5 percent upper limit of tax cap will be in effect for the first time
For the past 10 years, local taxing districts' levies have been capped at an average of 2 percent, ranging from a low of .7 percent in 2015 to a high of 2.3 percent in 2019.
For the first time this year, the Illinois Property Tax Extension Limitation Law - more commonly known as the tax cap - will hit its 5 percent upper limit, as the CPI for 2021 is 7 percent.
That means levies for Hinsdale's school districts will be higher this year than they have been in the past. Once the requests are submitted to Cook and DuPage counties, they will be translated into the tax rates (see related coverage on Page 3) that will appear on homeowners' bills in 2023.
District 181
The Community Consol-idated Elementary District 181 Board is scheduled to adopt a $73.5 million levy for operating funds - a 7.9 percent increase - following a public hearing at its Monday, Dec. 19, meeting.
The district does not expect to collect the full $82.8 million requested for all funds, according to Rick Engstrom, assistant superintendent for business and operations. Numbers will be adjusted by the county and the board plans to abate - or give back - about $5.9 million of the debt service tax levy in February.
"Any time we go over 50 percent of our (operating expenses in) fund balances that year, that money goes back to the community," Engstrom said.
Abating taxes rather than setting a lower levy allows the district to collect all the revenue the tax cap allows in future years if necessary.
"By not capturing the available amount, that affects the compounding for the total extension moving forward, because the calculation is based on your previous year's extension times the CPI plus new construction," Engstrom said.
And while a higher CPI means more revenue for the district, it also means costs are rising.
"We have seen some increases," Engstrom said. "The last few years, we've been locking in service contracts before the CPI increased dramatically."
District 86
Hinsdale High School District 86 Board members have adoption of a $102 million levy on their agenda for tonight's meeting, following a public hearing.
The levy for capped funds is $94.9 million, a 5.8 percent increase over last year.
As is the case in D181, the D86 board will consider an abatement for the debt service levy in March when it verifies the county's extension numbers. But the district needs to collect enough revenue to offset rising expenses, said Josh Stephenson, chief financial officer.
"A lot of the conversations that we've been having in finance (committee meetings) and at the board as well has been a lot of the financial unknowns as we move forward," Stephenson said, citing higher costs for utilities, transportation and other items. "It's such a difficult economic environment. We don't know what things will look like six months from now."
Requesting all available funds now and considering the abatement later gives the board the most options.
"They want to put the district in the most flexible position moving forward," Stephenson said.
