Relationship of Tax Rate, Tax This article attempts to explain in very basic terms the

Levy, and Assessment relationship between Tax Levy, Tax Rate, and Assessed
Table of ContentsValue. The Tax Levy is the amount of money the elected

board members of the various taxing bodies listed on your

tax bill request from the Property Tax. The Total

Assessed Value is the sum of all the Real Property

Assessments in a Taxing Jurisdiction.

The Tax Rate equals the Levy divided by the Total

Assessed Value. Example: Levy = 6,300,000, Total

Assessed Value 90,000,000 and the Tax Rate =.07 or 7%.

Your property’s equalized assessed value multiplied by

the Tax Rate = your tax bill amount.

Now if everyone was under assessed by 10% the Total

Assessed Value would be 81,000,000 (90,000,000 x.90). If

the Levy remains constant the Tax Rate would equal 7.8%

(6,300,000 divided by 81,000,000). Note the Tax Rate

increased to extract the same tax dollars from the lower

Total Assessed Value.
Table of Contents

Many property owners have asked, how come the new

growth does not lower the property tax? Up until 1997 the

Tax Rate in our 3 tax rate areas had been dropping about

2 tenths of a percent per year for the last five years. In

1997 a fourth tax area was added to our township. Also,

only the Tax Rate for the Peotone High School District

portion of our township continued to drop.

The following shows the effect of the Tax Rate on your

tax bill using 1997 rates for all tax code areas. Example:

Given a property with a Total Assessed Value of 65,000

located in each Tax Rate area.

1. Tax Code 1401 Manhattan Village Lincoln-Way H.S. Tax

Rate = 7.6265% (65,000 x.076265 = $4,957.

2. Tax Code 1402 Manhattan Township Lincoln-Way H.S.

Tax Rate = 6.8035% (65,000 x.068035 = $4,422

3. Tax Code 1403 Manhattan Township Peotone H.S. Tax

Rate = 5.2924% (65,000 x.052924 = $3,851

4. Tax Code 1404 Manhattan Village Peotone H.S. Tax

Rate = 6.1154% (65,000 x .061154) = $3,975

Now back to the original question. If the Levy does not

increase too great amount compared to the increase in the

Total Assessed Value plus the addition of the new

property the Tax Rate will decrease. This is the best

scenario because the decreasing Tax Rate will help

minimize the impact of increased assessed values due to

changing "Market Value."

The Tax Cap Law helps to some extent but it really

depends on the taxing body’s board member's attitude

toward budgeting. Do they budget for what is needed or
Table of Contents
do they set the Levy high to get the highest tax rate the
page 1 of 2
law allows. Often we read where a taxing body is going
Next to view page 2
to spend more money but their tax will not increase so the
First Previous Next Last