TaxLevyandAssessmentExplained

[macrockett]

I copied this post from another thread as it is relevant to tax information. In January 2010 the BLS will post the inflation # used for tax purposes.

The consumer price index used for property tax purposes is the "All Urban Consumer Price Index" and can be found here www.mrsc.org/subjects/finance/cpiu.aspx or the BLS (Bureau of Labor Statistics) www.bls.gov/news.release/cpi.t01.htm (table 1 of the CPI release). Next release is December 16.

It is the December 2009 number (not released yet) which is used for the levied amount in 2010 collected in 2011.

The .01 was Dec 2008, on taxes levied in 09, and collected in 2010.

Want to know more about this? Go here cnx.org/content/m18338/latest/

[macrockett]

Below is the 2008 Table 1. release by the ISBE last year (this comes from the BLS)

www.isbe.state.il.us/nutrition/pdf/consumer_price_index.pdf


Based on the number released today by the BLS, www.bls.gov/news.release/pdf/cpi.pdf inflation is tracking 1.8% over last year (see table 1, top line).

This number does fluctuate somewhat so we will have to wait to see the December #, released in January.

Based on the above, what this means is the county will give the School District approx 1.8% increase in it's tax request. So on $280 million (approximate), that would be about $5 million. So for the 2011 referendum D204 can pare back it's request to taxpayers as they are getting it automatically, due to inflation, rather than having to ask for it, hat in hand from you and I. This affects the out years as well which would increase automatically by this amount.

But remember, what you pay out of pocket will go up about $7.5 million per year, each and every year, whether D204 has to request it in a referendum or is allocated the money automatically due to inflation.

If you wonder why the Fed will keep interest rates low as long as possible, one possible explanation is to encourage investment and spending. Another is, eventually it generates inflation to keep all these "institutions," with tax caps from continually having to go back to the taxpayer in the form of a referendum. Call me cynical.

[macrockett]

In looking at this further, the CPI-U will come in around 2.9% (216.330-210.228)/210.228. The 216.330 is Novembers index and the 210.228 is Dec 08 index. That would boost the tax cap about $8 million for 2011. Nice job Bernanke!

[macrockett]

www.bls.gov/news.release/pdf/cpi.pdf

The y/y cpi came in at 2.7% v my estimate of 2.9 above. What this means is the District will be allowed to increase the 2010 levy by 2.7% over the 2009 levy + growth from new property. This is for taxes paid in 2011.

Doing the math, 2010 budget of $284 million x 1.027 = $291.7 million. So the tax cap for 2011 taxes will be approximately $291.7 million + the growth factor from 2010.

If you want to look at the detail go here: www.bls.gov/CPI/#tables


Bottom line, the minimum addition to the 2011 budget over 2010 will be just under $8 million.

[macrockett]

The BLS all-urban CPI came in on Friday at 1.5% y/y:

www.bls.gov/news.release/cpi.t03.htm

That means that the tax cap, re inflation, can rise 1.5%. Quite a bump for one month (.5 %)...

[macrockett]

Here's an interesting anomaly. While counties and municipalities are allowed to raise our taxes under the tax cap by 1.5% colas for social security and veterans get nothing! Why? They are calculated under different CPI figures, CPI-U v CPI-W and using different calculations.

CPI-U, December/December increase on an annual basis.

CPI-W using a smooth average of the third quarter months/same for previous year. www.ssa.gov/cola/2011/2011faqs.htm#q2

[warriordiva]

Aug 10, 2009 9:27:21 GMT -6 notasoccermom said:

We'll see where the taxes are at after they mail out our "Letters" on the 14th.

I was talking with a woman in TG last weekend who was fuming mad about her kids having to go to WB and was planning on fighting her assessment as a result.

Seriously? Her reason for fighting her assessment is that her kids have to go to WV and that makes her "fuming mad"? She should fight her assessment because she thinks it is too high based on the sliding property values in the area. I'm a realtor, her assessed value has nada/zippo/zilch to do with what specific school her kids go to, and in this market, the specific school has very little to do with your property value. Everyone is experiencing declining values at the same rate in our area. I thought we were past the WV bashing?

[Arch]

Holy 17 month old post to reply to, Batman!

[warriordiva]

Ha - I haven't been on in so long, I didn't even look at the date!!! My bad!