The Cuba Township Assessor is your liaison to the Chief County of Assessments Office. The Office of the Assessor provides professional help on your real estate assessments and related items. | Cuba Township Home Page | Supervisor | Clerk | Highway Commissioner | Back | Lake County Interactive Mapping Application WebsiteSome services provided are:
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Everyday there is news about the “declining” and “troubled” Real Estate Market. So I wasn’t surprised recently when a taxpayer asked when he could expect his taxes to go down, since home values were obviously going down. The sad truth is, they probably won’t. If market prices decline (and so far, that isn’t apparent in all segments of the market), assessments may go down, but generally tax bills will not. Why? Because taxes are based on spending and if spending doesn’t go down, taxes won’t go down. This fact is the least transparent part of the property tax process and one that many elected officials either do not understand or do not want to admit. Instead, the truth that spending creates the tax bill is clouded by statements similar to the one I recently read in the Village of Libertyville’s 2007 Annual Report, where the administration took credit for the declining tax rate - “…the Village Board consistently works to lower the Village tax rate.” SIMPLY NOT TRUE! The tax rate is nothing more than a calculation that is made by the county and the village does not control it. To understand why, we have to look again at the basic tax rate formula:
_____LEVY_______ The LEVY is the amount of tax dollars that your taxing body requests- The ASSESSED VALUE is the total of the assessments in the taxing district- The TAX RATE is nothing more than a calculation; Taxes go up because LEVIES go up. ASSESSED VALUES and TAX RATES are just the TOOLS used to divide up the total tax burden created by the combined LEVIES of our local taxing bodies. Here’s an example of how it works- Our taxing body requests $100,000 (the LEVY) and total assessments are 2,000,000. The tax rate is .0500 ($100,000 divided by 2,000,000). If your assessment is 10,000, then your taxes will be 10,000 X .05 or $500. Now, going back to the question above, “If property values go down, won’t my taxes go down?” Let’s see… Our taxing body is still requesting $100,000 (the LEVY), but total assessments are 1,800,000, down 10%. The tax rate now is .0556 ($100,000 divided by 1,800,000). If your assessment is 9,000 (down 10%), then your taxes will be 9,000 X .0556, STILL $500. Taxes didn’t change - even though assessments went down - because the LEVY didn’t change. The LEVY drives the tax bill! And, what happens if the levy increases but my assessment goes down? The LEVY is $110,000, 10% more, and assessments are 1,800,000, down 10%. The tax rate is .0611 ($110,000 divided by 1,800,000). If your assessment is 9,000 (down 10%), then your tax bill will be 9,000 x .0611 or $550. Up 10% like the LEVY, not down 10% like your assessment. The LEVY drives the tax bill! Generally, taxes do not go up because of increasing assessments and they will not go down with falling property values. On an individual basis, if the assessments in one area of the township go down and all the others go up, the declining area may see some relief in their taxes – the tax burden has been redistributed. And if one area of the market appreciates while most of the market is stagnant, the appreciating area may see taxes increase while the others stay the same – the tax burden has been redistributed. But, if assessments all decrease by a similar amount, say 10%, there will be absolutely no change in your tax bill - unless the levy changes. LEVIES go up because local government spending goes up and taxes go up because LEVIES go up - even when assessments go down. Assessments and tax rates do not create the tax burden and they do not change the tax burden; they only distribute the tax burden that is created by the levies. The services we want from our schools and local governmental bodies are not free; we pay for them with our property taxes. And when we see a downturn in the economy and housing market and find ourselves having to cut back in our own lives, we want our taxing bodies to do the same. It is up to each of us, as voters and taxpayers, to question how much money is needed by our taxing bodies to operate, because… The only way to control taxes is to control local government spending. Rebecca M. Tonigan, CIAO Cuba Township Assessor| Cuba Township Home Page | Supervisor | Clerk | Highway Commissioner | Back | Updated: 04/09/09 URL: http://www.cubatownship.com/assessor.htm
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