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CITY OF CHAMPAIGN TOWNSHIP Advisory Referendum February 5, 2008

CITY OF CHAMPAIGN TOWNSHIP Advisory Referendum February 5, 2008. STATUTORY RESPONSIBILITIES. City of Champaign Township Responsibilities. Township is one of 20 Coterminous townships in Illinois Statutory Responsibilities: Appraising Property Values Administering General Assistance.

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CITY OF CHAMPAIGN TOWNSHIP Advisory Referendum February 5, 2008

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  1. CITY OF CHAMPAIGN TOWNSHIPAdvisory ReferendumFebruary 5, 2008

  2. STATUTORY RESPONSIBILITIES

  3. City of Champaign TownshipResponsibilities • Township is one of 20 Coterminous townships in Illinois • Statutory Responsibilities: • Appraising Property Values • Administering General Assistance

  4. Survey of Coterminous Townships Zion Berwyn Cicero Evanston Oak Park River Forest Kankakee Galesburg Macomb City of Peoria Warsaw Bloomington Danville City of Champaign Capital Quincy Decatur Cunningham Madison County Alton Godfrey Granite City Springfield Coterminous State Receiving St. Clair County Belleville Not Coterminous East St. Louis Neighboring 0-50 miles East St. Louis Coterminous and Neighboring June 6, 2006 IL Township Map State Receiving and Neighboring

  5. Who Governs Townships? Although townships are governed by an elected Board of Trustees, townships are also unique in that, it is a grass roots form of government; and gives a unique role to the average voter through the mechanism of the Annual Town Meeting.

  6. ELECTORS GOVERN at ANNUAL TOWN MEETING

  7. How the Annual Town Meeting Works? At the Annual Meeting, usually held on the second Tuesday in April, voters, otherwise known as electors, can take a large number of actions concerning the township.  Township electors can directly authorize through a motion many of the powers that are regularly exercised by the Board of Trustees.  This includes, authorizing an advisory referenda to be placed on the ballot by the County Clerk.

  8. April 10, 2007 Annual Town Meeting The electors, are authorized by majority vote, to place an advisory referenda question on “Poverty” on the next regularly scheduled election in the City of Champaign Township. YES NO

  9. Proposition To Restore the Level of General Assistance Funding “Shall the voters of the City of Champaign Township ask the Township Trustees to restore the level of general assistance funding by actively pursuing any and all means available to them in order to preserve the health and well-being of individuals, children, families and adults living in extreme poverty in our Township?”

  10. What Effects Township Budget? • Tax Caps • Property Tax Levy • Tax Rate • Fund Balances • TIF Districts • Service Needs

  11. TAX CAPS

  12. Tax Caps Became effective with the 1997 tax levy • Advantages • Control the growth of property tax extensions • Disadvantages • A “blunt instrument” • Not well-designed to deal with special situations • Limit the Township’s ability to balance available cash with annual tax levies

  13. What is the Property Tax Extension Limitation Law (PTELL)? • PTELL commonly referred to as "tax caps,“ is designed to limit the increase in property tax extensions (total taxes billed) for non-home rule taxing districts. • PTELL limits increase in tax extensions on existing property, but adds an additional amount for new construction each year.

  14. TAX LEVY

  15. Property Tax Levy • The tax levy is the amount of money requested each year by the Township to perform the mandated Township services. • The levy amount extended to the Township is restricted by the tax rate multiplied by the EAV (equalized assessed value) minus the tax caps, minus the exemptions and minus the TIF district restricted revenues. The Township “Capped” Levy for 2006 was $422,281.00.

  16. Property Tax Levy Equation Levy request divided by EAV=Tax Rate 110,000 divided by 50,000,000 =0.0022 (0.2j2%)

  17. Tax Levies 1995 - 2005

  18. Tax Levies by Fund1995-2005

  19. TAX RATE

  20. Tax Rate Is a percentage applied to each taxing body's assessed valuation which will produce the amount of that taxing body's levy, or, in other words, the levy divided by assessed value equals the tax rate. The tax rate is expressed in terms of "dollars per $100 of assessed value". • Township’s current tax rate=.0357 • Next Year’s Proposed tax rate =.0333

  21. Tax Rate Equation EAV multiplied by Tax Rate=Property Tax Revenues $50,000,000 x 1.50%=$750,000

  22. Tax Rates by Taxing Body2006

  23. YEAR The Declining Tax Rate 1996 – 2007 RATE

  24. Revenue Source Rate Comparisons with Cunningham Township in Urbana2006 City of Champ - Urbana

  25. Tax Rate Comparison2006

  26. TIF DISTRICTS

  27. Tax Increment Financing Districts (TIF) • TIF districts are a financial tool used by the city to help reinvest in blighted areas. Currently there are three TIF districts in Champaign. • TIF districts freeze the EAV for a period up to 23 years and reduces the amount of tax revenues to the units of local governments. • The township’s revenues have been reduced by lost tax revenues of as much as $98,000 over the course of the TIF districts in Champaign.

  28. FUND BALANCES

  29. FUND BALANCES • In 1998, one year after “tax caps”, a lawsuit was brought forth to limit the amount of funds a taxing body could keep in their reserves. In order for the Township not to be exposed to lawsuits, the available funds balances were used to lower the tax rate and the levy amounts. • A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities. • The Township maintains four individual governmental funds.

  30. Limits on Fund Balances • Some taxing bodies carried large fund balances • Some were several times greater than annual expenses • Lawsuits resulted • Court’s decision? Balances too high • City of Champaign Township had to reduce fund balances to prevent exposure to lawsuit Result = Lower tax rates

  31. INCREASE IN SERVICE NEEDS

  32. Fiscal Year Service Need Comparisons 2005 – 2008 City of Champaign Township

  33. GA Case Load Service Need Comparisons with Cunningham Township in Urbana2006 City of Champ - Urbana

  34. OBLIGATION TO SERVE THE POOR

  35. Township has a Legal Responsibility to Serve the Poor Townships are mandated by Illinois State Statutes to provide General Assistance to the poor. Under the Illinois Public Aid Code (305ILCS 5/6-1 and 305 ILCS5/6-1.1),any individual who satisfies the eligibility requirements, such as financial need and residency, is entitled to receive aid through the Township General Assistance fund. 

  36. Obligation to Serve the Poor • Specified in State Statute • Any individual who meets eligibility requirements is entitled to Township General Assistance • Regardless of level of Township Revenues

  37. General Assistance • Often considered the public assistance “of the last resort.” • Administered throughout Illinois by Township Supervisors (except Chicago). • Illinois State Law requires townships to provide General Assistance.

  38. Poverty in the City of Champaign • 13,398 individuals in the City of Champaign (22.1%) live below poverty level (U.S. Census 2000) • Of these 13,398 individuals, roughly 18% (over 2400) are non-student • City of Champaign Township serves roughly 4% of the 2400 poor non-student individuals

  39. Poverty Rates by Race

  40. In Conclusion

  41. Township Revenues • Property Taxes comprise 90% of all Township revenues • Current rate: 0.0357 • $16 for a single-family home with market value of $150,000 • Township receives less than one-half of one-percent of the entire property taxes levied in Champaign

  42. Six Budgetary Constraints Blueprint for a Financial Storm • Tax Caps • Property Tax Levy • Low Tax Rate • Legal limits on fund balances • TIF Districts • Increased Service Needs

  43. The Outcome of PTELL An Inflexible Blunt Instrument • Tax Caps (PTELL) slows revenue • Keeps levy artificially low and cannot be significantly raised • Lowering tax rate • Diminishing Fund Balance Reserves • TIF districts skim much needed tax resources off the top • A surge in service needs Result: A critical financial crisis Long Term Solution = Tax Referendum

  44. The February 5, 2008 Advisory Referendum will be a precursor to a hopeful, successful, and binding referendum on the November 2008 Ballot. It allows the Township a one-time release from the tax cap, to adjust the Township’s rate to a sustainable level with the ability to operate the Township’s mandated services. Advisory Tax Referendum

  45. Conclusion • Township has a clearly defined obligation to provide assistance to the poor. • Obligation does not depend on the availability of General Assistance funds. • Revenue increase is necessary to meet this obligation. • Following increase, the City of Champaign Township tax rate will remain lower than comparable communities.

  46. CITY OF CHAMPAIGN TOWNSHIPAdvisory ReferendumFebruary 5, 2008

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