Franklin School District Explains Tax Levy at Dec. 15 Meeting

By Benjamin Cox on December 20, 2021 at 10:21am

The Franklin School District explained to the public on December 15th why it’s seeking a large tax levy this year during a truth in taxation hearing. In a public notice issued last wee, the Franklin School Board said it would be raising its tax levy – or request of tax money – to 8.4%, triggering a truth in taxation hearing with the public.

Superintendent Jeff Waggener explained during the hearing that because the district is governed by Property Tax Limitation Law, they are capped at receiving a 5% increase in funds each year: “If we do not capture all of the funds available to us at that time, we lose them forever. So, if we put in 4.8%, and we had an influx of taxable income from the county; we can’t go back and say ‘OK, now there’s more taxable revenue, estimated assessed value of property has gone up, there’s more business. We would like to go come back and get another 3%.’ Once we put [our levy] in, we are done. Even though it is 8.4%, we still have to keep in mind our 5% because if we had that 7% in there, there is a little extra money, we can’t gain anymore than 5% so that’s where the confusing thing comes in with the tax cap. Most districts around us are not tax capped. They see this year that they may need to make a building improvement or something like that, they may tax a little bit more and try to capture a bit more tax revenue. Again, we are capped at 5% or CPI increase, whichever is less.”

Property Tax Limitation Law or PTELL was passed in the state in 1991. Previous to that time, if home values were increasing rapidly, tax obligations could also raise at a corresponding percentage. For example, if homes in a taxing district went up 8% in value in a given year, the taxing district could end up with a significant increase. PTELL was passed to allegedly prevent this from happening. The taxing district can only get an increase of CPI and that is capped at 5%. The only exception to this is if the voters in a taxing district approve a referendum to raise taxes by more than this amount. Most PTELL districts seek the maximum amount on their tax levy each year without triggering a truth in taxation hearing, which occurs when a tax levy is estimated above 5%. School districts in the state have long said that the use of local tax dollars and a decrease in state aid and an increase in state mandates have been one of the many reasons local property taxes in Illinois have increased significantly.

Waggener says that some of the frustration in the community lies with the idea of money that was set to come from the Lincoln Land Wind Project. The equalized assessed value in the Franklin School District did receive a little over a $600,000 increase over the year. Despite that, with factors of bonds, Waggener estimates that the rate the district will receive will be lower than last year: “When you add in your bonds…4.7, last year would have been 4.4. This is our bonds and our levy. This year it’s actually going to go down about 1.5%. So our actual estimated rate will be 4.2436%.”

Waggener estimates that the EAV of the district will possibly rise next year once the wind project has been online for a full year.

A couple members of the public said during the hearing they thought the increase was in poor timing due to not having a full estimate of the wind farm’s revenue as well as national issues with inflation. Some suggested asking for a smaller rate and then asking for the increase next year.

The 8.4% levy was passed unanimously with one board member absent.

In other business, the school board tabled a decision to proceed with a reorganization feasibility study with Waverly. The study was to be conducted by Midwest School Consultants. Board Member Willie Smith said that Waverly had also decided to table the issue and schedule a public hearing on January 15th about the study. Smith and Board President Paul Bergschneider said they would attend the meeting and gauge the public’s input before bringing the item back to the board for consideration.