Levy Overview

Understanding the Tax Levy

Click here to watch a report from the Assistant Superintendent of Business & Operations to the Board of Education on December 1, 2022 explaining the tax levy.

The tax levy, budget, and cash flow are all intertwined within the financial operations of the school district.

Tax Levy

Annual process that provides the resources needed to maintain and enhance programs for students
Provides funding in June & September

Cash Flow

A significant portion of District revenue arrives in June which is used to fund the following year’s programing

Budget

Reflects the District’s Goals and Objectives
Represents all funds and authorizes expenditures
Education Fund is the primary fund used to support the operations of the District
- Salaries & Benefits
- Purchased Services
- Supplies & Materials
- Capital Outlay
- Other Objects

Tax Levy Information

Purpose

The purpose of the local property tax is to access funding to maintain and enhance the programs associated with providing all Lake Zurich CUSD 95 students with a high-quality educational experience.

Importance

Local property taxes represent approximately 82% of the total school district revenue.

Definition of Terms

Aggregate Levy

The annual corporate levy of the taxing district and those special purpose levies which are made annually (other than debt service levies and levies made for the purpose of paying amount due under public building commission leases).

Debt Service Levies

Debt Service Levies are those levies made to retire the principal or pay interest on bonds or to make payments due under public building commission leases.

Property Tax Extension Limitation Law (PTELL or “Tax Caps”)

PTELL or Tax Caps limits the increase over prior year extension on existing property to 5% or CPI whichever is lower.

Consumer Price Index (CPI)

The CPI is the inflation factor used for determining extension of tax levy.

Equalized Assessed Value (EAV)

The Equalized Assessed Value (EAV) is determined by the Township Assessor using 33% of the fair cash value of a property and applying an equalization factor set within the County. (Typically, a factor of 1.00)

Rate

The amount of the school district’s authorized tax rate is determined by the total amount of the taxes levied by the Board of Education.

Local Property Tax Factors

Tax Rate Formula

The formula used to calculate the tax rate is as follows:

Total Dollars Levied / Total Assessed Property = Tax Rate

Tax Cap

The Property Tax Extension Limitation Law (or "Tax Cap") means that tax increases are limited as follows:

Total Current Year Taxes = Prior Year Taxes + Percentage Increase (lower of Consumer Price Index or 5%)

tax cap: total prior year taxes plus percentage increase (lower of CPI or 5%) equals total current year taxes

Property Value & Tax Rate

Property Values and the Tax Rate have an INVERSE relationship. This means:

As property values increase, the tax rate goes down.
As property values decrease, the tax rate goes up.

property values & tax rate have an inverse relationship

Proposed vs. Estimated

Proposed

The District submits a PROPOSED levy to the County.

Safeguard

In order to ensure that we do not lose revenue relating to the “tax cap” formulas, we SAFEGUARD the levy, or in other words, we levy a larger amount than what will be received. Capped Funds 2022=6.96%

Estimated

The ESTIMATED tax extension increase is limited by the “Tax Cap” formula. Capped Funds 2022=6.02%

Safeguard Benefits

EAV Variance

If there is variance in the EAV from what has been estimated, the use of a Safeguard will provide for flexibility in redistributing funds should an individual fund rate limit be reached.

New Property Variance

If New Property is higher than estimated, the use of a Safeguard will provide for the levy to collect these new tax dollars and for the receipts to be allocated to the identified funds.

2022 Tax Levy Design uses an estimate of $1,790,678,530 in EAV

2022 Tax Levy Design uses an estimate of $17,339,455 in New Property

2022 Tax Levy Calculation Data

2022 Overview

New $

The District is expected to receive about 6.02% in new revenue for the general operating funds (our capped extension) or a total of $4,941,199.

Total $

PROPOSED total taxes to be extended are set at $94,965,797 which would represent an overall increase of 6.40%.
ESTIMATED total taxes to be received is $94,192,570 which would represent an overall anticipated increase of 5.54%

Process

The Board of Education approves the levy in December and then it is filed with the county clerk’s office.
The final allocation work comes in late March/early April when the county clerk calculates the final amounts to be extended.

District

Parents/Students

Schools