| Relationship of Tax Rate, | This article attempts to explain in very basic terms the |
| Tax Levy | relationship between Tax Levy, Tax Rate, and Assessed |
| and Assessment | Value. The Tax Levy is the amount of money the elected |
| board members of the various taxing bodies listed on your |
| tax bill request from the Property Tax. The Total |
| Assessed Value is the sum of all the Real Property |
| Assessments in a Taxing Jurisdiction. |
| The Tax Rate equals the Levy divided by the Total |
| Assessed Value. Example: Levy = 6,300,000, Total |
| Assessed Value 90,000,000 and the Tax Rate =.07 or 7%. |
| Your property’s equalized assessed value multiplied by |
| the Tax Rate = your tax bill amount. |
| Now if everyone was under assessed by 10% the Total |
| Assessed Value would be 81,000,000 (90,000,000 x.90). If |
| the Levy remains constant the Tax Rate would equal 7.8% |
| (6,300,000 divided by 81,000,000). Note the Tax Rate |
| increased to extract the same tax dollars from the lower |
| Total Assessed Value. |
| Many property owners have asked, how come the new |
| growth does not lower the property tax? Up until 1997 the |
| Tax Rate in our 3 tax rate areas had been dropping about |
| 2 tenths of a percent per year for the last five years. In |
| 1997 a fourth tax area was added to our township. Also, |
| only the Tax Rate for the Peotone High School District |
| portion of our township continued to drop. |
| The following shows the effect of the Tax Rate on your |
| tax bill using 1997 rates for all tax code areas. Example: |
| Given a property with a Total Assessed Value of 65,000 |
| located in each Tax Rate area. |
| 1. Tax Code AAAA Tax |
| Rate = 7.6265% (65,000 x.076265 = $4,957. |
| 2. Tax Code BBBB |
| Tax Rate = 6.8035% (65,000 x.068035 = $4,422 |
| 3. Tax Code CCCC Tax |
| Rate = 5.2924% (65,000 x.052924 = $3,851 |
| 4. Tax Code DDDD Tax |
| Rate = 6.1154% (65,000 x .061154) = $3,975 |
| Now back to the original question. If the Levy does not |
| increase too great amount compared to the increase in the |
| Total Assessed Value plus the addition of the new |
| property the Tax Rate will decrease. This is the best |
| scenario because the decreasing Tax Rate will help |
| minimize the impact of increased assessed values due to |
| changing "Market Value." |
| The Tax Cap Law helps to some extent but it really |
| depends on the taxing body’s board member's attitude |
| toward budgeting. Do they budget for what is needed or |
| do they set the Levy high to get the highest tax rate the |
| page 1 of 2 | law allows. Often we read where a taxing body is going |
| Next to view page 2 | to spend more money but their tax will not increase so the |