LEVY REQUEST: The D39 Board of Education (BOE) establishes a levy, which is a request for dollars (the “Levy Request”). The Levy Request must be made by December each year. D39 does not set a tax rate – Cook County sets the tax rate.
- The dollar amount in the Levy Request is based on D39’s projected financial need for the upcoming school year – while also considering forward-looking projections.
- D39 works to align operating expenses (g., salaries) & capital spending plans with projected tax revenue under the tax cap, including reasonable assumptions about CPI & historical new construction averages.
TAX RATE: The Levy Request is converted to a tax level rate, under PTELL, or the tax cap. After establishing a budget, an increase in a school district’s Levy Request beyond that requested in the previous year may be attributable to extension of the levy by CPI or 5% (whichever is less), plus an amount attributable to the value of new construction in the district. A district may seek an increase in its tax rate above the tax cap by putting a referendum question on the ballot. This happens infrequently, e.g., over the past 20 years, there have been two referenda passed in D39 (1998 and 2011) – both of which were supported by over 60% of the voters.
- CONVERSION OF LEVY REQUEST INTO TAX RATE: D39’s Levy Request (in dollars) is turned into actual amounts by the County Clerk after determining the value of all property (old & new) within district boundaries. The County Clerk makes its property value determinations by examining existing EAV (Equalized Assessed Value) in the district, then calculates what the Levy Request (excluding new construction) translates to in terms of a rate. That rate must not be greater than the lower of 5% or CPI. That rate is then applied to the assessed value of the new construction, which in effect, is an incrementally new EAV for the district. D39 plays no role in this assessment and “conversion” process.
- IMPORTANCE OF NEW CONSTRUCTION: It is essential to note the importance of estimating the full value of new property growth, which increases the tax base (e., the pie gets bigger – not just sliced differently). If a school district’s new construction estimate in its Levy Request is below what the County Assessor concludes that it is, the district will have understated its tax base. In that case, the district’s subsequent levies will translate into a rate that is slightly higher for owners of existing property; conversely, owners of new property that was not fully included by the district in its initial levy will pay a slightly lower rate in the succeeding tax year than they otherwise would have. This is why new construction estimates are so important.