-
UNDERSTANDING THE DISTRICT 214 TAX LEVY
Summary
District 214 values fiscal responsibility and recognizes the importance effective budgeting has on the support we provide students and staff, as well as its impact on our community stakeholders. The following frequently asked questions are intended to offer clarity on the tax levy set by the District, the tax rate set by the County, and the varying impacts on taxpayers.
What is a tax levy?
A tax levy is a request made by a taxing body (e.g., school district, park district, city) for funds that are needed to operate the organization for one year. Each year, the taxing body creates a tax levy and submits it for approval by its respective governing board. In the case of District 214, the tax levy is prepared by administration annually, reviewed by the Board of Education in November and, in accordance with Illinois law, approved at December Board meeting. For school districts, the levy consists of requested dollar amounts for each individual operating fund and in an aggregate amount.
What is a tax extension?
While the tax levy is the request to the county from the taxing bodies, the tax extension is the final calculation that is included on property tax bills. The total tax extension is the product of the property value within school district boundaries (also known as “equalized assessed valuation”, or “EAV”) multiplied by a calculated tax rate. The County Clerk calculates the tax rate needed to raise the revenue certified by the school district. Additionally, the total extension often is lower than the tax levy adopted and submitted by the school district since the county must reduce the revenue request to the limits dictated by Illinois law.
Does the school district set the tax rate?
No, the school district’s tax levy is submitted to the county in whole dollars. The same is done by the other taxing bodies in the community. The tax rate is calculated by the county once the school district’s allowable tax levy and total EAV within the district are known.
Does the school district always receive the property taxes it requests in the levy?
No, the district is subject to the Property Tax Extension Limitation Law, commonly referred to as “PTELL” or the “tax cap”. PTELL limits property tax increases on existing property to the lesser of 5.0% or Consumer Price Index (CPI). If the school district submits a tax levy greater than the allowable increase, the county will reduce it prior to extending the taxes to the community.
Why would the school district submit a levy that is higher than the allowable increase?
This is a common practice for taxing bodies and is due to several unknown pieces of information at the time of the levy: (1) final EAV within the district, (2) new construction within the district, and (3) the Cook County multiplier. The school district asks for more than it expects to receive to protect itself from fluctuations in these unknown factors.
The Board is discussing a 2025 operating tax levy that includes a 4.98% increase over last year. Will my taxes increase by 4.98%?
No, there is not a one-to-one correlation between the requested tax levy increase and the increase to property tax bills. If the school district approves a 4.98% increase, that increase is on the total dollar amount requested by the district, not on individual property tax bills. For example, if the school district requested $100 million in Year 1 and $105 million in Year 2, that would be a 5.0% increase on the tax levy. That does not mean, however, that property tax bills will increase by 5.0%.
The actual distribution of the property taxes is dependent on a number of factors that are out of the school district’s control, including:
- The change in your property’s assessed value as compared to other properties - The rate of change in property value for individual properties will cause a shift in the tax burden. If your property’s value increases at a rate higher than those around you, your property value will represent a larger portion of the total property value in the district. Therefore, you would be responsible for a larger portion of the total tax extension. The inverse is also true- if your property’s value increases at a rate slower than those around you, your property value will represent a smaller portion of the total property value in the district, and you would be responsible for a smaller portion of the total tax extension.
- Changes in the proportions of residential, commercial, and industrial properties - If the values of commercial properties (e.g., retail stores or restaurants) increase at a higher rate than residential properties, homeowners’ share of the tax extension will decrease as the taxes are shifted to those commercial properties.
Why can’t the school district tell me how this will impact my individual property tax bill based on my assessed value (e.g., a typical $500,000 house will see an increase of…)?
The district’s tax levy is only one of several components that contribute to the final property tax calculation. Once the school district approves the levy in whole dollars, the county calculates the distribution of taxes to individual taxpayers, and as mentioned in the previous question, there are several variables beyond the school district’s control that contribute to that distribution calculation. As a result, you may experience a property tax increase that is higher or lower than your neighbors, or you may not see any change to your taxes. Additionally, each property and tax bill in the community include a variety of exemptions (e.g., the homestead or senior exemptions) that significantly affect the final calculation of property taxes. Cook County has a video available on its website to assist community members with reading and understanding the various components of the annual property tax bills.
Why do my taxes need to increase at all? Why doesn’t the school district lower its tax levy?
District 214’s mission is to provide a certain level of education for its students that parents and the community expect. The ability to meet those expectations is in large measure based on having future property tax revenues available to pay for necessary programs and opportunities for students. In the 2025-26 budget, property taxes account for 82% of the school district’s total revenue, and any decrease or reduction to property tax revenue would limit the school district’s capacity.
Recent years have presented additional challenges with increasing inflation and supply chain shortages. Inflation grew rapidly from 1.4% in 2020 to 7.0% in 2021, and inflation decreased only slightly in 2022 to 6.5%. However, many essential operational costs, such as facility maintenance and student food costs, increased beyond the reported level of inflation. The school district has continued to look for ways to reduce expenses in the budget, but with staffing costs (salaries and benefits) accounting for 74% of the total budget (excluding debt service and capital projects), the “discretionary” spending on supplies, equipment, and contractual services is limited already. At the same time, the school district is looking very closely at the budget for continued cost reduction opportunities.
Additionally, the district’s ability to levy taxes is calculated on the previous year’s tax extension. If the school district reduces its levy for even one year, that revenue will be lost to the school district every year and will continue to compound forever, with the exception of limited circumstances.
Why doesn’t the school district use its fund balance?
Although District 214 maintains a healthy fund balance, the funds are needed for cash flow purposes during the school year to avoid the need to take on short-term debt (loans) to pay staff and monthly bills. Similar to a personal savings account, a fund balance reserve also enables the school district to handle unexpected emergencies, such as installing a new boiler in the middle of winter, and has recently been used to fund significant capital projects across the school district. At the same time, the school district continually searches for every possible revenue source, such as state and federal grant programs.
How well have the school district’s finances been managed?
The Board of Education has maintained a commitment of responsible fiscal stewardship for the community. District 214 has continued to maintain the highest designation of 4.0 on the Financial Profile rating from the Illinois State Board of Education. Additionally, sound financial planning has helped the District maintain its Aa1 bond rating, the second highest ranking for credit worthiness from Moody’s.
The Board and administration continually look for options to tighten the budget and significantly limit “new” spending. The school district reinforces and follows strict purchasing procedures to ensure the lowest-cost options are considered in all major spending categories. Additionally, the school district routinely explores options to reduce costs of existing services without sacrificing the opportunities and experiences provided to students.
More Resources:
Cook County Treasurer’s Office
IASB Understanding School Finance Guide
- The change in your property’s assessed value as compared to other properties - The rate of change in property value for individual properties will cause a shift in the tax burden. If your property’s value increases at a rate higher than those around you, your property value will represent a larger portion of the total property value in the district. Therefore, you would be responsible for a larger portion of the total tax extension. The inverse is also true- if your property’s value increases at a rate slower than those around you, your property value will represent a smaller portion of the total property value in the district, and you would be responsible for a smaller portion of the total tax extension.
