Village Property Tax Information
Where do my property taxes go?
The Village’s tax rate represents 6% of the total property tax bill (McHenry County). A home valued at $250,000 pays $8,052 in property taxes. The Village receives $494 of that amount. Property tax dollars are used for general municipal purposes, which include police protection, street maintenance, insurance, pension and retirement costs, and other municipal purposes.
Property Tax Levy Rules in Illinois
The Village adopts its property tax levy annually.
The levy adopted in a given year will result in property tax receipts for the following year.
Under the State of Illinois tax cap law, non-home rule municipalities (like Fox River Grove) cannot increase the overall property tax levy by more than the amount of the consumer price index (CPI) for the previous year or 5%, whichever is less, plus any new property on the tax rolls. New property includes new construction or development that is added to the tax rolls and does not increase property taxes to all other taxpayers.
Why do taxing bodies subject to the tax cap law increase taxes?
The Village’s annual adjustments to property tax are attributed to maintaining the property tax revenue stream to keep pace with inflation and to avoid losing the opportunity for any given year’s annual adjustment forever. That is because any increases in taxes (whether due to CPI or new property) can only be captured during the year they are first available to a non-home rule municipality. For a small community like Fox River Grove, foregoing a single property tax increase could significantly impact the municipal budget during periods of economic uncertainty or difficult financial times. Given that the Village regularly faces cost increases or revenue reductions out of its control, it would be fiscally challenging to forego important revenues without the ability to get them back, just in case they’re needed someday.
This year’s tax levy
The increase on the 2022 levy (paid in 2023) is 8.63% ($84,544). As referenced above, the Village cannot levy for CPI above 5%, even though the CPI for 2021 is 7%, and the Village is facing cost increases in several areas well above 7%. The Village is adjusting property taxes the full 5% ($48,956) allowed for under the tax cap law. The remainder of the increase (3.63%) is associated with the closure of TIF #1 and other new property being added to the regular property tax rolls which does not impact all other property tax payers. The increase for this year equates to $24.72 in property taxes for a home valued at $250,000. Because of action taken by the Village Board, the property tax adjustment will be more than offset by a 40% reduction ($53,000) in the municipal electric tax.
What is the Village doing to help residents as they face cost increases?
The Village has been committed to finding ways to offset cost increases faced by our residents. Steps taken in recent years include abating portions of property taxes collected for general obligation bonds (2016, 2017), paying off bonds early (2018) to eliminate bond payments and associated interest expense, the elimination of vehicle stickers (2021), and a reduction in the municipal electric tax (2023).