How To Read Your Property Tax Bill

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How To Read Your Property Tax Bill (Everything You've Wanted To Know About Your Property Tax Bill--And More First, some basics: All government, federal, state and local, operates on tax dollars. These taxes can include sales taxes, income taxes and property taxes. Most local governments operate on sales taxes and property taxes. A unit of government, for this purpose we'll use Montgomery County, needs to take care of roads, hold elections, protect people and property, keep records of real estate transfers, hundreds of other jobs, and also, have a system to pay for all of these services. To help understand this process, we will greatly simplify it by selecting one area, protecting property by operating a law enforcement agency, the sheriff's department. The County Board's Finance Committee meets annually with the sheriff and the sheriff tells the committee, based on past experience and projections of future needs, how much money it will take to operate the department for a year. The sheriff includes money for payroll including benefits for deputies and staff, money for gasoline for patrol cars, money to operate the jail, money to replace equipment, whatever is necessary to do his job. This dollar amount is then added to the amounts needed to run other county departments and provide other county services. The County Board then sets the budget for the coming year. Once the total amount is determined, let's say, for example, $100,000, a small amount of money is levied from each property owner, in proportion to the property they own and the value of that property. Again, to greatly oversimplify matters, use the example of 1,000 property owners. If all 1,000 had property exactly alike, each worth $10,000, for example, it would be easy to assess each property owner $100, to cover the $100,000 amount of taxes levied by the county. But, that's not the case. Almost every parcel of property in the county is different in some way from every other parcel. It's the job of the Supervisor of Assessments to place a value (set by state statute at one-third the Fair Cash value) in the case of most property. There is a slightly different value placed on farm ground, the value of which is determined by its productivity. See the Supervisor Of Assessments Page for a more detailed explanation of the assessment process. Because our 1,000 property owners listed above have different houses worth different prices because they were built at different times, are different sizes, on different sizes of lots, the property owners who have larger, more valuable properties will pay a larger percentage of the $100,000 being assessed by the County. It is then the job of the County Clerk to take the "percentages" or values given by the Supervisor of Assessments to all properties and extend that over the $100,000 total tax bill. Remember, this is a very simplified version. There are actually thousands of pieces of property in the county. Plus, we are only dealing here with one taxing district, Montgomery County. This same procedure will apply to every school district, city or village, park district, fire protection district, ambulance district, township, community college, and others. Once the various levies from all of the different taxing bodies are determined by the County Clerk, these amounts are given to the County Treasurer who prepares the bills that are sent to all the property owners in the county. The Treasurer has the job then of collecting the tax money and distributing it to the various taxing entities, the townships, fire protection and drainage districts, the park districts, and many others, including the county. Then, according to the budget the County Board adopted, that $100,000 (from our example above) is divided among the various departments and offices that serve the county, including, as mentioned above, the sheriff's department. It's also the job of the treasurer, if a property tax payer does not pay his bill, to proceed according to law against that person to collect the taxes. Now The Tax Bill Itself: When you look at your tax bill, there are several entries of interest. At the top right of the Tax Bill The Property Index Number is at the top along with the class, which indicates information about the property. The legal description is indicated (this happens to be in Litchfield) and the assessed value of the property, $1,899 for the lot and $3,814 for the building for a total of $5,713. This represents one-third the fair cash value of the property. Exemption amounts are also shown if they apply. Department of Revenue multipliers are shown here also. Further down is noted the date the first installment is due (July 31, 2001) and the amount due at that time ($260.65), and the second installment and the amount due then. List of taxing bodies In the middle of the tax bill is a listing of Taxing Districts. On the left is the 1999 rate, the 1999 tax, the name of the Taxing District, in this example the County is the first listed, the 2000 tax rate, the percent of the total tax bill, the 2000 tax and the Illinois Municipal Retirement Fund pension which is included in the total district amount. It may be difficult to read on your screen, but on this particular tax bill, the Taxing Districts include, from top to bottom, Montgomery County, North Litchfield Township, Litchfield Community Unit School District #12, Lincoln Land Community College, Litchfield Park District, Litchfield Corporation (the City of Litchfield), Litchfield Airport Authority, Litchfield Ambulance Service, North Litchfield Road District and the University of Illinois Cooperative Extension Service. Again, it may be difficult to read on your screen, but Montgomery County's portion of the $521.30 total tax bill is 10.8%, or $56.22, North Litchfield Township's portion is $13, or 2.5% plus the North Litchfield Road tax below which is $15.58, or 3% of the total. The school district receives 52.6% of the taxes collected on this piece of property, $274.42. The bottom of the tax statement has two stubs to be submitted when the tax payments are made. Each carries the Property Number, the taxpayer's name, the due date of the installment and the amount due. We hope this brief exercise has given you a basic understanding of how your tax bill is determined. All of the levies extended and the dollars collected have been set by locally elected officials. They have a great responsibility and work to do their best jobs. Remember, they, too, are residents of the taxing districts in which they vote to levy taxes. When a County Board member or park district trustee or city council member votes to raise taxes, he or she is also going to pay his share of the bill. Taxing bodies often receive other money for operations, including sales tax dollars and state and federal grants. The amounts listed on the property tax bills are only a portion of what it takes to operate schools, for example, or the county health department, or a city or village. Local elected officials, most often your neighbors, will be glad to answer questions about the operating budgets of a township or park district or village or school district. Any more questions? The office of Treasurer Ron Jenkins is located on the first floor of the Historic Courthouse, Hillsboro. Phone number is (217) 532-9521. Fax number is (217) 532-2404. Mailing address is: P.O. Box 596, Hillsboro, IL 62049.