League of Women Voters of Illinois

TIME FOR ACTION on Fiscal Policy and Education Funding

Property Tax Extension Limitation Law

November 17, 2011

UPDATE

Property Tax Extension Limit Law (PTELL) HB 3793 FAILED with a vote of 34 yes votes to 78 against (a mix of 73 ‘nay’ and 5 ‘present’, essentially a ‘no’ vote) in the House on November 8th.

Despite a lively debate that included frequent mention of political difficulties politicians would face if they voted against the measure to curb the growth of property tax, the majority of House members responded to Rep. Roger Eddy’s plea to ‘do the right thing’. HB 3793, proposed by Rep. Jack Franks, would have dropped the PTELL cap from the current limit of 5% or the CPI (whichever is greater) to 0% if the local taxing jurisdiction where ‘total equalized assessed value (EAV) of all taxable income’ declines from one year to the next. This would have presented a loss of income to already cash-strapped agencies dependent upon property tax for some or all of their income (school districts, fire districts, libraries, etc.).

November 7, 2011

ACTION

Contact your Representative to VOTE NO on HB3793 a bill that will change the Property Tax Extension Limitation Law (PTELL) from the current Consumer Price Index or 5%, whichever is lower, to 0% or a voter approved rate if the Equalized Assessed Value (EAV) of all taxable property in a taxing district for the current levy year decreases.

For further information, contact the Issues Specialists.

RATIONALE

This bill will have an impact on all local entities reliant on property tax for part or all of their funding. This is especially bad for school districts because:

A large number of school districts in IL receive their primary funding from local property taxes, in many cases well over 80% of their funding. The State has not been paying its bills and General State Aid (GSA) has been slow in coming to local districts. When local property tax revenues are reduced, the need for more GSA is increased at a time when the State Board of Education has indicated GSA may be pro-rated due to the inadequacy of state resources.

State funding for schools continues to decline yet the cost for the same services continues to rise. The current tax levy is based on the previous year which makes reductions permanent, compounding the long-range impact.
In tax-capped counties, school districts have been held to minimal CPI increases (3% or less since PTELL was instituted) when many local school districts are already struggling to educate students. Referendums to pass property tax increases for schools have generally not been successful.

League of Women Voters of Illinois®

TIME FOR ACTION on Fiscal Policy and Education Funding

League of Women Voters of Illinois^®