Taxpayers in Batavia Public Schools District 101 didn't always generate 80 percent of the school system's revenue.
Early in the last decade, taxpayers shouldered nearly 65 percent of the revenue while the second biggest revenue source, general state aid, contributed 15.7 percent.
As the tax base grew, the state calculated that Batavia needed less general state aid per student, said Kris Monn, assistant superintendent for finance. Now, he said, instead of getting more than $1,000 per pupil, the district gets about $400. This funding accounts for less than 5 percent of the district's revenue, according to 2009-10 data from the state.
Allotments in general state aid are, as seen with Batavia, determined largely by a district's wealth. The wealthier a district is, the less money it will get from the state per pupil.
Equalized assessed valuation plays a big part in the general state aid formula because it is an indication of a district's wealth. It is also known as a district's tax base.
WHAT IS EAV?
EAV doesn't reflect a home's current value, which St. Charles Township Assessor Colleen Lang said is important but often difficult for people to understand.
Rather, EAV reflects one-third of a property's fair cash value as of Jan. 1 of an assessment year, based on the three prior years of market data, said Mark Armstrong, Kane County's supervisor of assessments. To ensure the taxing burden is equal among different taxing districts, equalization – or the adjustment of an area's median level of assessments to 33.33 percent – is conducted.
Armstrong explains in his property tax clinic that this equalization is necessary because a taxing body might be in different townships with different median levels of assessment. Thus, a homeowner in one township might pay more in property taxes than the owner of a similar house in the other community for the same school district.
For example, here is what taxes would look like before equalization:
Township A resident: $300,000 [fair cash value for a home] x 0.3333 [median level of assessment] = $99,990 x 0.048411 [tax rate] = $4,841 [property tax].
Township B resident: $300,000 [fair cash value for a home] x 0.2948 [median level of assessment] = $88,440 x 0.048411 [tax rate] = $4,281 [property tax].
After equalization, Armstrong explains, both homeowners would pay about the same in taxes because the tax burden is uniform. The change in aggregate EAV would also lower the tax rate.
This is after equalization:
Township A resident: $300,000 [fair cash value for a home] x 0.3333 = $99,990 x 0.045615 [tax rate] = $4,561 [property tax].
Township B resident: $300,000 [fair cash value for a home] x 0.3333 = $99,990 x 0.045615 [tax rate] = $4,561 [property tax].
EAV AND YOUR TAXES
Officials say one of the biggest misconceptions about EAV is that a lower assessment will bring about lower taxes. The Property Tax Extension Limitation Law put an end to that direct relationship. It took effect in Kane County in 1991.
Armstrong explains this at his clinic by comparing property taxes to buying pies at a restaurant whose bakers are each a local taxing body. Some bakers – townships, park districts and libraries, for example – make small pies, or levies, while others – community colleges, municipalities and unit school districts – make big pies.
In his analogy, each diner, or taxpayer, needs to pay for a slice from each of the 10 pies, or levies.
Taxes can increase even in times of declining assessed valuations because, Armstrong explains, some pies get bigger. Paying for these bigger pies, or levies, can result in higher tax rates for taxpayers.
Average EAV per pupil
$106,158 – Rockford
$158,922 – U-46
$162,208 – Aurora West
$190,584 – CUSD 300
$197,139 – Chicago Public Schools
$205,194 – Batavia
$210,252 – Kaneland
$258,569 – Geneva
$265,167 – St. Charles
$277,376 – Crystal Lake CCSD 47
$303,176 – McHenry CCSD 15
General state aid funding and its percentage of a district's revenue
2.1 percent ($1,740,000) – Geneva
2.3 percent ($3,860,000) – St. Charles
3.6 percent ($2,500,000) – Batavia
4.9 percent ($2,600,000) – Kaneland
5.2 percent ($2,600,000) – McHenry CCSD 15
6.7 percent ($14,200,000) – CUSD 300
8.7 percent ($7,360,000) – Crystal Lake CCSD 47
12.1 percent ($39,500,000) – Rockford
13.2 percent ($53,900,000) – U-46
16.2 percent ($21,660,000) – Aurora West
22.9 percent ($1,107,400,000) – Chicago Public Schools
Source: The 2009-10 district report cards made available by the Illinois State Board of Education. Chicago's information is from the 2008-09 report card.