A Naperville resident, who has lived in the city for the past 19 years, is no stranger to property tax increases. Over the years, he and his family—his wife and their two teenagers—have lived in several homes within the city. While he had grown accustomed to seeing his annual property tax bill rise gradually, this year’s increase caught him off guard. His property tax bill for 2023 totaled $22,374.60, a stark contrast to the previous year’s bill of $18,061.32. The nearly 24% jump, or $4,313.28, left him questioning what caused such a sharp increase.
What’s Driving the Property Tax Hike?
The resident wasn’t sure exactly what was behind the large tax hike. Was it an increase in property values? Or perhaps the rising costs of local services, like schools or parks, which rely on property taxes for funding? Naperville collects property taxes to support various local government units, including school districts, park districts, and the city itself. In recent years, these bodies have been requesting more tax revenue to cover increasing costs, and that might be a major factor behind the larger bill.
How Property Taxes Are Calculated in Naperville
Property taxes in Naperville, as in other parts of Illinois, are based on a combination of factors. Every year, property owners in DuPage and Will counties receive their tax bills in the spring. These bills show how much money each local taxing body needs to operate for the year. Taxing bodies include groups like Naperville School District 203, Indian Prairie School District 204, the Naperville Park District, and others. Each taxing body calculates its share of the total tax bill based on the value of the property and the services it provides.
The tax bill reflects how much revenue each taxing body has requested, based on the taxable value of the property. The money collected from property taxes helps fund services and pay employee salaries. With rising costs in recent years, many local government bodies have increased their property tax revenue. However, how much each resident pays in taxes depends on the location, tax rates, and how their property is assessed.
The Role of Inflation in Tax Increases
Illinois has a law, known as the Property Tax Extension Limitation Law (PTELL), that has been in place since 1992. This law limits how much taxing bodies can raise property taxes each year. The cap is set at 5% or the rate of inflation from the previous year, whichever is lower. For many years, inflation stayed below the 5% limit, so tax increases were relatively modest. However, over the past couple of years, inflation has been higher, allowing taxing bodies to raise taxes up to the full 5% allowed by law.
Several local bodies, including Naperville School District 203, Indian Prairie School District 204, and the Naperville Park District, have taken advantage of this higher limit and increased their tax levies to a maximum of 5%. Officials from these taxing bodies argue that the increases are necessary to keep up with rising costs. Inflation has affected everyone, including local government organizations, from employee wages to the cost of materials and services.
Understanding the Bigger Picture of Property Taxes
Although large increases in property tax bills impact some residents, not everyone feels the effects equally. Property value and location play a big role in determining how much an individual’s taxes increase. A property located in a highly desirable area or one that has appreciated significantly in value over the past year will likely see a larger tax increase, even if tax rates have remained the same or dropped slightly.
For instance, if a home’s value has risen, the tax rate applied to it might still lead to a larger tax bill, even if the rate itself has not gone up. In DuPage County, property values increased by about 5.1% in 2023, while in Will County, the increase was even higher, at around 7.7%. These higher property assessments contribute to the overall rise in tax bills for many residents.
Taxes Help Fund Community Services in Naperville
Local officials, including the Will County Treasurer, encourage residents to consider the services that their property taxes help fund. Schools, parks, libraries, and other community services rely on this revenue to operate. While paying higher taxes can be frustrating, these officials remind taxpayers that property taxes are essential for maintaining the quality of life in the community. The question they pose to residents is: Which services would you be willing to give up in exchange for a lower tax bill? From education to recreation, property taxes support many of the things that make Naperville an attractive place to live.
In conclusion, while higher property taxes are difficult for many homeowners, the funds they generate are critical for the community’s well-being. With inflation on the rise, many local governments are raising taxes to keep up with the cost of providing essential services. As property values continue to rise, so too will property taxes, making it important for residents to stay informed about how their tax dollars are being used.
