Community voices: Many factors go into calculating your property taxes

Halloween has come and gone, and soon, Jack Frost will be nipping at our noses, reindeer will be prancing about, sleigh bells will be going ring-ding-dingle-ling, and you know what’s next. Yep, you guessed it. It’s tax levy time!

In late December, communities across the Sauk Valley region will adopt property tax levies for property taxes to be collected in 2025.

I recently spoke with the Sterling township assessor, Marcy Lawrence, who explained how the property tax process begins. I also talked with the city of Sterling finance director, the Sterling city manager and the supervisor of assessors of Whiteside County about how the property tax process ends. Let me tell you about my conversations with these folks.

Lawrence told me that the property tax process starts with a property tax budget the city provides her, which shows where the collected property taxes will go and how much is needed. Let me stop there. Just so you know, there is a library full of state statutes, rules and regulations that govern the setting of tax rates, amounts to be collected from property taxes, and what they can be used for. Your township assessor, city manager, administrator or finance director does not just pick a number out of thin air and say, “This is what I need for property taxes next year.” Our legislators in Springfield tell them how much they can ask for and how much they will get either by state statutes or by setting the amount of property taxes needed to pay for pensions, legal fees, public safety, etc., with oversight provided by the Illinois Department of Revenue. And the amount of property taxes collected is based on a mathematical calculation that uses the property tax rate of a taxing body and what is known as the equalized assessed value.

The EAV is calculated by multiplying the total value of your property by 0.333, as directed by state statute. The amount that this calculation comes to is then used to calculate the total amount of property taxes to be collected from you, the property owner. If your home has an assessed value of $150,000, it will have an EAV of $50,000, which is the amount used to calculate the property taxes to be collected. This is how the taxable value of your property is determined and how much property taxes are to be collected.

On their property tax statement, Sterling property owners will find that eight taxing bodies collect property taxes from them. Each of these taxing bodies has numerous items funded by property taxes. The city of Sterling alone has 14 such items. The property taxes collected for the city of Sterling are then distributed among these 14 items. These items include pensions, the library, the municipal band, public safety, tort and more. Every property owner will find this information on their property tax bill. Look to see how many taxing bodies are on your bill, and you’ll know who benefits from your property taxes.

Now, why are your property taxes getting higher? If homes in your neighborhood sell at a price above your home value, then your home value will rise, and so will your property taxes. The cause of this increase isn’t the assessor’s fault. Blame inflation, high demand, low housing inventory and the state for your higher property taxes. But don’t blame the township assessor.

A high demand for housing and a low housing inventory will produce higher home prices and values. And we in Sterling and across the Sauk Valley region are currently experiencing a high-demand, low-inventory housing market, and the more homes bought and sold, the higher the state’s multiplier rate.

The state multiplier currently sits at 1.0 in Sterling, which means that the house that sold across the street for $20,000 more than my home is worth just increased my home value by $20,000, and I will be paying higher property taxes because of that increase in its value.

The state multiplier is based on the number of sales within the community. If that number was lower and the multiplier was set at, say, 0.5, that $20,000 difference in home values between mine and the one sold would be half as much, and my home value would increase by $10,000, which would raise my property taxes, but only half as much as a 1.0 multiplier would have made them.

So, what can be done to lower your property taxes? There are several steps that property owners can take. You can file for the Homestead, Senior, Senior Assessment Freeze and other exemptions available for homeowners through the Sterling Township offices. Doing this will reduce the EAV of your property, which will help reduce your property taxes. Please visit the Sterling Township website to learn if you qualify for these exemptions.

It also would help to convince our state legislators to reduce the EAV calculator to a figure lower than 0.333 and the state multiplier to a rate of 0.5 or lower. This would most certainly help keep seniors in their homes and make housing affordable for younger families.

This past Tuesday, we elected a state senator who advocates for property tax reform, among other things. Here’s wishing him the best of luck in getting legislation through Springfield that will do just that one day. Sen. Li Arellano, please help us keep property taxes low. We’re counting on you.

Jim Wise is a Sterling alderman.