Superintendents Toolkit 2013

PTELL

Background:

The Property Tax Extension Limitation Law (PTELL), which was implemented in 1991, limits the amount that local taxing bodies in tax-capped counties can increase their tax levies each year to 5 percent or the rate of inflation as defined by the Consumer Price Index (CPI), whichever is less.

When the law was implemented, its intent was to protect landowners at a time when property values were increasing. Now, with Equalized Assessed Valuation (EAV) falling in many places, the ability to increase the tax levies is one of the only ways school districts can maintain their local tax revenues.

Issue:

Resources:

House Bills 89 (Rep. Jack Franks, D-Woodstock) and 95 (Rep. David McSweeney, R-Barrington Hills) are slightly different versions, but both are designed to prevent local taxing bodies from increasing their tax levies when property values fall. Both proposals would eliminate the authority of school boards to increase local revenue to keep pace with inflation or to maintain local revenue when the EAV drops. HB 89 states that in tax-capped communities where the total taxable EAV is less than the previous year, the allowable increase in a district’s tax extension would be 0 (zero) percent or the rate approved by voters. HB 95 would automatically freeze a district’s tax extension for three years unless local voters approve a different rate through referendum.

 Ed-Red position paper

 PowerPoint presentation on effects of PTELL  Sample letter to legislator (Mundelein HS District 120/October 2011)  Sample PTELL press release (Lake County/November 2011)

Talking points:

1. Because each year’s levy is based upon the previous year’s levy, reductions would become permanent, continuous and compounding. 2. The provisions of PTELL already limit a school district’s ability to increase its tax levy to the lesser of the CPI or 5 percent. The average annual increase of the CPI since PTELL was created is 2.4 percent; it was 1.5 percent in 2011. 3. Because the State of Illinois ranks last in the nation in the percentage of financial support of public education, school districts rely heavily on local property taxes. 4. Freezing local resources results in an increase in

the amount of General State Aid for which a school district qualifies. However, GSA was cut by 5 percent in FY12 and by 11 percent in FY13 – and some are estimating a 20 percent cut in FY14. 5. This issue is not about school districts wanting more money; it is about staying even with inflation and keeping the local revenue stable. 6. The bottom line given the drastic cuts in state funding for public education coupled with freezing a school district’s ability to increase the tax levy is that school districts will have to lay off teachers and cut programs.