Why two lines on Naperville property taxes will decrease
Residents in many parts of Naperville are set to get some money back from two of the governmental units on their property tax bill - Naperville Unit District 203 and the city of Naperville.
The result means a total decrease of about $116 on the 2016 property taxes owed by the average homeowner, as the school district and the city divvy up $7.2 million in total abatements to taxpayers. Here's a look at why the money is coming back.
District 203
Several times during the past decade, school board members have returned money to taxpayers that had been collected to make debt repayments, and this year is no exception.
The school board voted Monday to give back $3 million from two debt payment levies, resulting in a $40 tax decrease for the average homeowner.
The district collects the money because of tax increases voters approved in 2008 and 2009 to fund facility improvements at several schools.
After winning approval of the tax increases, the district took out a $10 million loan in 2008 and a $33 million loan in 2009. The 2008 loan agreement lasts 20 years, but identifies 2018 as the first year when the debt potentially could be paid back.
Superintendent Dan Bridges said the district is on track to use the early repayment option next spring. Chief Financial Officer Brad Cauffman said $9.5 million has been set aside in the 2017-18 budget to make the final payment and get the 2008 loan off the books.
So this year, school board members decided the $3 million levied from 2016 taxes to help pay back the loans won't be needed. They voted unanimously to return it.
Cauffman said paying off the 2008 loan early also will create a "permanent abatement" for the taxpayers who support nearly 17,000 students.
School board President Terry Fielden said sound financial management led to the abatement and early loan repayment. Officials predicted more positive financial news, even as the district continues to make payments on the 2009 loan and state funding remains uncertain.
"We're anticipating a declining tax rate," Cauffman said. "The district is predicting budget surpluses in the future."
City of Naperville
When city council members approved this year's budget, they committed to keeping flat the tax levy that supports it - and then some.
The city promised to give back $2 million generated from its first home-rule sales tax, which it began charging Jan. 1, 2016, as an abatement on property taxes.
Then the council challenged staff members to cut an additional $200,000 to ensure taxes levied in 2016 would be lower than the $46.4 million collected in 2015.
A procedural move that became official Tuesday allowed these changes to occur as part of a $4.2 million total abatement that brings the city's 2016 levy to $46.2 million.
The move means the owner of a $380,000 house, the average in the city, will see roughly $76 back from the city's component of the property tax bill.