McHenry County Property Taxes: School officials point to bonds, other factors to explain tax rates

EDITOR’S NOTE: This is one half of part two of our series Property Taxes: Follow the Money. Read the other half on townships. For Illinoisans, property taxes are a sore spot. Illinois has the second highest property taxes in the nation, and McHenry County is in the top 10 for highest property taxes in the state. Illinois also ranks first in the country with nearly 7,000 taxing districts, which makes examining one’s tax bill a confusing exercise. While taxpayers are annoyed by the price tag, property taxes are also a primary source of revenue for local taxing bodies. This series examines some of the issues in Illinois for residents and taxing bodies.

In 2014, 16 percent of Woodstock Community Unit School District 200’s property tax rate accounted for monies – almost $10 million – that went toward paying off voter-approved bonds.

District 200, which recently approved a tentative flat 2016 levy, last year had one of the higher school district tax rates in McHenry County, when including bond and interest extensions. However, without that voter-approved component, District 200 falls in the middle of the property tax rate scale.

“A lot of it has to do with our debt service tax rate being high, being about 1.36 percent,” said Risa Hanson, District 200’s chief financial officer. “Our operating tax rate was about 6.85 percent.”

The debt was issued after voters passed a referendum in 2006, which allowed borrowing for the construction of Woodstock North High School, Prairiewood Elementary School and Creekside Middle School, Hanson said.

With a bulk of property taxes going to public education, bonds issued for such projects represent only one of the factors to consider when looking at school district tax rates as they can make up, sometimes, a significant portion of the aggregate rate, school officials say.

In order to compare tax rates as equitably as possible, the Northwest Herald combined high school districts with their respective feeders. Notably, factors that play into tax rates, such as equalized assessed value, will differ between districts that have been combined.

The McHenry County rates that fell above District 200’s, including bonds and interest, were those of McHenry School District 15 and McHenry Community High School District 156 (8.74 percent); Fox River Grove Consolidated School District 3 and Crystal Lake-based Community High School District 155 (9.41 percent); and Wonder Lake-based Harrison School District 36 and McHenry District 156 (10.55 percent).

INFOGRAPHIC: 2014 McHenry County school tax rates

School officials’ criticism of a deadbeat state has become commonplace at various board meetings across the county. Officials often refer to local revenue, property taxes, as the largest and most stable source of funding.

But the burden is becoming too heavy, said 17-year Woodstock resident Barb Gessert, who currently has kids in school.

“We want the greatest benefit that we can get from education ... but we want that with the least expense,” she said.

District 36 Superintendent Susan Wings and District 3 Superintendent Tim Mahaffy attributed relatively high rates to a lack of industry in the area.

“District 3 gets 83 percent of its revenue from local sources,” Mahaffy wrote in an email. “Because we do not have a large commercial base in our village, Fox River Grove property owners account for 86 percent of the tax revenue collected.”

This differs from districts such as Algonquin-based Community Unit School District 300, where commercial property is more prevalent throughout Algonquin, Lake in the Hills and Huntley, said the district’s chief financial officer, Susan Harkin.

When explaining high tax rates, many school district officials also are quick to point to year-after-year declines in equalized assessed value, which represents one of the components used to determine a tax levy.

“The tax rate continues to rise even more when our EAV has declined so much,” Wings wrote in an email, later adding, “We should see a decrease in that tax rate this year with an increase in EAV as well as a decrease in the levy.”

According to an analysis of school districts’ rate-setting EAVs between 2008 and 2014, District 36 did see the most dramatic decline, about 49 percent between the two years.

With a majority of most school districts’ budgets directed toward salaries and benefits, other school officials have indicated most taxpayer dollars go toward paying the people educating and working with McHenry County students.

In the case of District 3, Mahaffy said last year it was a cost that increased by 3 percent in salaries and 14 percent in insurance over the previous year.

To the south in District 300, which had one of the lowest aggregate tax rates in McHenry County, keeping those costs down can be easier when faculty and staff are part of the same salary schedule.

That’s the benefit for taxpayers in unit districts such as hers, Harkin said. Costs for things such as salaries, transportation and education programs fall under one umbrella.

“There’s one superintendent, and administrative costs are centralized and spread out over a bigger portion of students,” she said. “I do think it has to do with the fact that you are more streamlined and more efficient.”

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