What is a property tax levy?
A property tax levy is the amount of property tax dollars a school district requests in order to operate the district for the upcoming school year.
Key Terms:
Tax Levy: The revenue requested by a public taxing body.
Tax Extension: The actual revenue received by the taxing body.
EAV: Stands for Equalized Assessed Valuation, which is approximately 1/3 of the property market value.
How is a property tax levy calculated?
The tax levy formula is established by the Illinois School Code and it is created by calculation that considers the previous year's tax rate, the current Consumer Price Index, the equalized assessed value (EAV) of the properties within the district's boundaries, and anticipated new growth of properties within the district's boundaries.
The basic formula takes EAV (including any new property growth in the district) and multiplies it by the tax rate. This equals the tax extension. This formula is difficult for taxing bodies to calculate precisely because two of the variables, the EAV and the tax rates, are not available before the tax levy is due to be submitted to the county clerk's office. We make an educated prediction to ensure we request enough revenue to provide for the needs of the students in our district.
Is the property tax levy that is approved by the Board of Education the final figure?
The tax levy the board approves is not a final figure. It is a request based on estimations of the items in the tax levy calculation. Since the final figures for equalized assessed value of properties and new growth are not known until the spring of the year following the board approved tax levy, a school district must estimate what they believe the final figure to be.
A district will request a rate higher than what might be anticipated in order to ensure that they have the opportunity to receive all the money allowable by law. A district cannot receive more than what the law allows by the property tax levy calculation, even if the requested levy amount is higher than the results of the final levy figures, the district will only receive what is established by the final EAV and new growth figures.
Click here to see the Bement CUSD 5 2024 Resolution for Truth In Taxation.