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In the next two years, Flossmoor District 161 expects a pair of significant financial “bumps” that both increase the total property value of the school community and provide relief to local taxpayers.

Click the image above to 
get the PDF presentation 
delivered to the school 
board.
 

Frances LaBella, the district’s assistant superintendent for business, told school board members Monday that this year’s retirement of a tax increment financing (TIF) district in Flossmoor will result in $3,585,878 being returned to the tax rolls. That amount will boost the district’s tax base in late 2016.

A year after that, LaBella said, District 161 will see the financial impact of the village’s Meijer superstore – now under construction – for the first time. LaBella did not speculate about the total boost in property value that Meijer will bring to the community. However she added $6 million in “new construction” to a financial statement that will be submitted to Cook County later this year and the bulk of that amount is likely from the Meijer project.

TIF districts are used by municipalities to generate money for economic development in a specific geographic area. During the 23-year life of the TIF, municipalities can re-invest all new property tax dollars in the neighborhood. Money that is set aside in a special fund is returned to the tax rolls at the end of the TIF. Flossmoor’s TIF district is in the area where the Meijer complex is being built.

LaBella’s projections on the benefits of the TIF retirement and Meijer came during her presentation on the district’s annual tax levy request. Each December, school districts must make a formal request for funds to the county clerk’s office, which is responsible for collecting tax revenues.

This year, as in the past, District 161 will make a levy request that is higher than what is allowed under the state’s 1994 tax cap law. LaBella recommended Monday that the district submit a levy request of $26.33 million, a 15.5 percent increase over last year’s figure.

LaBella pointed out that the county clerk will inevitably lower the final levy increase to an amount in accordance with the federal Consumer Price Index. This year’s CPI is likely to be .8 percent.

“That 15.5 percent figure might scare people,” board member John Simmons said. “But our taxes are not going up by 15.5 percent.”

Submitting tax levy numbers to the county clerk’s office is the final budget step that the school district must take each year, and one of the most complicated. District 161 board members and administrators spent much of the first half of the year preparing a new budget and, along the way, trimmed more than $600,000 in spending so that the final fiscal document would be balanced.

Once again, the district’s greatest financial problem is a decline in the equalized assessed valuation (EAV), the total value of all taxable property in the school community. And, LaBella said, as property values go down, tax rates go up. Since the 2008 recession, property values in District 161 have plummeted. The total equalized assessed valuation in 2008 was around $600 million. LaBella estimates that the EAV is now about $338 million.

LaBella’s presentation covered all of the complex state and county formulas that go into property assessment and the setting of tax rates. This year, she said, the district’s total valuation continued to fall. That decline, accompanied by a .8 CPI number, would mean District 161 would lose nearly $700,000 in taxes if the same type of levy request as last year is submitted. To avoid that, she suggested that the district levy at a higher amount in the transportation fund, where such an action is allowed, and transfer money to the all-important education fund later in the year.

LaBella said she is hopeful that the property value decline that began with the recession has bottomed out and that the district’s assessed valuation will start going up.

The district’s levy request will be forwarded to the county after the board conducts a truth in taxation hearing at its Dec. 14 meeting. At that hearing, residents will be able to comment on the levy request and its implications for local property taxes. 

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