One of Friday's first tasks for McHenry County tax district budget officers was logging on to the U.S. Bureau of Labor Statistics website to check what 2009's inflation number turned out to be. More than a measure that it cost 2.7 percent extra last year to buy the same stuff as in 2008, Friday's Consumer Price Index number sets a limit on how much property taxes can go up in 2011."It's kind of hard to explain," said McHenry County Assessor Donna Mayberry. Nah, it's just hard to understand. As the Attorney General put it in 1996, "The limiting rate is a fraction, with a numerator consisting of the last preceding aggregate extension base multiplied by an amount equal to one plus the extension limitation. The denominator consists of the current year’s equalized assessed value, without including new property or the recovered tax increment value."
It all starts with an Illinois law called PTELL, short for the Property Tax Extention Limitation Law, even shorter "The Tax Cap." What it means is the dollar amount collected from a district's taxpayers all together isn't supposed to go up each year more than the last year's CPI. (Not counting anything extra for new construction.) That "cap" on increases in collective taxes usually sets a rough limit on the rise in individual property taxes.
For homeowners it's been a swell thing: for a long time housing values increased around 7 percent a year but taxes only went up maybe three. Budgeteers got used to that. In 2008, however, in the midst of the Great Recession the CPI increase was only .1 percent. District's' aggregate property tax takes for 2009 were almost frozen and that's part of why they're all wearing sweaters and using the backs of driveway coating company fliers for scratch paper to make it through the 2010 budget year.
"I've been talking to school districts," said Mayberry. "Their costs have gone up, things like heat and power, busses and stuff, that they can't change."
Friday's CPI number is all about next year's budgets, though.
"I'm not going to say it's going to solve all our problems," said County Financial Administrator Ralph Sarbaugh. "It'll give us more room," he said. "A lot of our other revenues are still going to be down. But it'll help."
Back at the individual taxpayer level Friday's CPI number may not be such good news. The inflation rise means even though market real estate values are still down about 25 percent from their 2007 highs, after a lot of complicated rigamarole with assessments and statutory tax rate limits, next year's tax bills might not fall as much as everyone hopes or even go up some more.












