Your property tax bill just went up. Here’s what’s behind the increase

By Kevin Haas
Rock River Current
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ROCKFORD — Thousands of property tax notices were mailed out in Winnebago County last week, delivering news of bigger bills for the overwhelming majority of taxpayers.

The total property taxes being collected by all government bodies in Winnebago County this year is $549.9 million, according to Winnebago County Treasurer Theresa Grennan. That represents a 4.9% increase from a year ago.

Larger tax bills generally follow when local governments decide to collect more, although the amount can vary depending on how many new tax-generating homes and businesses were built year to year. This year, the median tax bill in the county increased 5% from a year ago, according to a calculation from Winnebago County Supervisor of Assessments Tom Hodges.

The larger bills are a combination of increasing property values and the decision from most taxing bodies to collect more money this year than last year.

The total value of all property in Winnebago County rose 13% last year to a record $7.27 billion. In Rockford, eight of the 11 government agencies that make up your property tax bill increased the amount they collect.

The only three that didn’t take an increase were the city of Rockford, Four Rivers Sanitation Authority and Rockford Township, although the township did increase its road levy. Four Rivers and Rockford Township each had reductions of less than 1% year over year.

The city, which makes up about 20% of the amount you pay on your bill, has left its property tax levy essentially flat since 2017. In fact, the city is the only of the 11 taxing bodies on your bill that has a lower levy now than it did a decade ago. The city’s levy — the total in property taxes it collects — is nearly 2% less today than it was in 2015. Rockford is collecting $48.2 million this year compared to $49.1 million in 2015, according to a Rock River Current review of a decade of tax levy data.

Still, studies have shown the Rockford metropolitan area has among the highest effective tax rates for homeowners in the country.

“We have been incredibly cognizant of the property tax burden that they’ve been carrying, and we have been very disciplined in our approach to respecting the taxpayer dollar,” Mayor Tom McNamara said of his administration’s decision not to increase its property tax collection.

How property taxes are set

Taxing bodies — ranging from cities and libraries to schools and fire districts — determine how much they plan to collect in late fall and early winter.

State law limits how much local governments can increase those levies. That limit is set at 5% or the rate of inflation, whichever is less, plus the additional value of new construction. The max increase was set at 3.4% this year under the Property Tax Extension Limitation Law.

Governments can decide to collect up to that much, or they can collect the same or less to try to give relief to taxpayers.

Several have done so over the years. Winnebago County, for example, left its rate unchanged from 2016 to 2019, and captured only the value of new construction in several other years. The Rockford Public Library left its collection flat from 2015 to 2022, according to our review of data going back to 2015.

Taxing bodies typically set their levy in the fall or early winter. The Winnebago County Clerk’s Office then calculates the rate based on those levy requests and property values. Rates will fall as property values increase, but you could still see a bigger bill depending on how much your property’s value changed year to year. For example, this year the city of Rockford’s tax rate fell to 9.47%, the lowest rate since 1989. But most bills increased due to growing property values.

Funding education

This year, Rockford Public Schools opted to capture its allowed inflationary increase for the first time since 2011. Before this year it had either reduced its levy or increased it only by the value of new construction.

The decision is significant because the school district is the largest portion of a Rockford taxpayer’s bill at 50.5%.

The district’s overall property tax collected had dropped from $156.5 million in 2015 to $154.8 million in 2018 as it paid off debt. Then, in 2020, it started collecting additional taxes based on the value of new construction. Doing so adds revenue to the school district without putting an additional burden on existing taxpayers.

“The district was really just trying to do right by taxpayers and really try to hold the line and live within existing tax levies that had been in place,” said Greg Brown, chief financial officer for Rockford Public Schools. “The district successfully did that for many, many years.”

This year, the Rockford School Board’s levy is a 3.1% increase, slightly below the allowed 3.4% cap. The total increase was about $8.2 million, with $1.1 million of that coming from new construction.

The district decided to capture that increase after seeing its share of state revenues taper off, while its expenses including everything from employee salaries to food and transportation costs continued to grow.

“Our revenue growth just wasn’t keeping up with our expense growth,” Brown said. “We’ve finally gotten to the point where we really had to do something to help offset the lag of the revenue not keeping up with our expenses.”

More real estate: Inventory of homes for sale hits new record low in the Rockford region

Rock Valley College, which serves six counties including Winnebago, also increased its property tax collection this year. The college has three primary sources of income: property taxes, tuition and state revenue.

A portion of the college’s levy, like other taxing bodies, is dedicated to debt payments. Rock Valley has opted to keep that portion flat and only take on new debt, like it’s doing for its new downtown facility, when old debt expires.

It tries to strike a balance in funding education between tuition and property taxes.

“The board does not like to assess any more than we have to, but they realize property taxes is one of three sources of revenue for the college’s operations,” said Ellen Olson, vice president of finance and CFO for the college. “Do you keep tuition low and maybe ask for a little bit more in property taxes. Or do you increase tuition?”

Olson said Rock Valley provides a return on taxpayers’ dollars by training individuals for future careers that bolster the region’s economy.

“I wish people would think of it as an investment in a community asset,” Olson said. “We are training individuals in things like aviation maintenance and welding, and CNC and other fields that will help them earn more income and be able to contribute back into the economy here.”

What’s next?

The first installment of property taxes is due June 6, with the second payment due Sept. 5, according to the Winnebago County Treasurer’s Office.

Property owners will learn how much the value of their home or business has changed when the next slate of assessments comes out in late summer. That’s expected to generate another record high in countywide property values as home sale prices have continued to increase in the region.

For taxing bodies, it’s too soon to determine how they’ll set their tax levies toward the end of this year. What they determine can depend on a variety of factors from expected costs to the level of state and federal funding that will come to the Rockford region.

Rockford Public Schools, for example, is keeping an eye on the shakeups unfolding in the U.S. Department of Education to see how it will affect the flow of dollars here. Most school funding comes from the state and local property taxes, but federal funding does provide key support for special education programs and transportation, Brown said.

“We really don’t know what’s going to happen with that,” he said. “We really are truly trying to be responsible with those dollars, but there’s just an awful lot of uncertainty out on where the state and federal resources are going to come in for the next budget year.”

This article is by Kevin Haas. Email him at khaas@rockrivercurrent.com or follow him on X at @KevinMHaas or Instagram @thekevinhaas and Threads @thekevinhaas