An Overview of the Tax Levy Process

In order to provide services to residents, the Village of Sugar Grove, as all taxing bodies do, relies on various sources of revenues for funding. One of those revenue sources is property tax. To be eligible to receive these funds, yearly all taxing bodies in the State of Illinois must establish their property tax levy, publish the levy, hold a public hearing and then adopt the levy and file it with the County Clerk’s office no later than the last Tuesday in December. During the beginning of the following calendar year, the County Clerk’s office extends taxes. The taxing bodies then receive tax funds from their County in installments in June and November.

The Tax Levy that is published does not accurately reflect the amount a taxing body will receive or the actual percentage change that will be shown reflected on a property tax bill. The following attempts to explain the Tax Levy process and why the levy amount published appears as though property taxes will be increasing by a large amount.

There are two State Statute provisions that affect the Village of Sugar Grove’s Tax Levy process. The first provision is what is commonly known as the “Tax Cap”. In the early 1990’s, State legislators approved the Property Tax Extension Limitation Act, which provides that operating levy increases cannot exceed the Consumer Price Index increase for the prior calendar year, plus new growth. New growth consists of annexations of property and new building activity.

In December, when the taxing bodies must submit their proposed levies, the actual new growth and revised assessments amounts are not yet available from the Assessor's Office. Because of this, most taxing bodies will develop two tax levies. The first being the amount that they actually expect to receive and the second being an over-inflated amount. The taxing bodies do this because if a taxing body’s assumption on growth is too low, the taxing body loses the revenue increase related to those properties forever. This over-inflated amount is the amount that must be published as per the second State Statute provision that affects the levy process , and is what is known as the Truth in Taxation Act .

During the tax extension process, the County reviews the information submitted regarding annexation new growth and revised assessments and adjusts the levy to the maximum amount allowed under the Tax Cap. As a result of this process the actual tax rates go down each year unless a passed referendum or other action results in an increase.

For additional information please visit the Finance Department Link