A question has been raised by an Oak Park resident, as well as the township assessor, about the accuracy of District 97’s April 5 referendum ballot question and whether it underestimates how much property owners will actually pay in added taxes if it passes.

Oak Park Township Assessor Ali ElSaffar insists that it does underestimate the impact, because the question does not factor in the state equalizer, a number used by the Cook County Assessor each year to help calculate local tax bills. The law firm that helped draft District 97’s ballot question, however, said it followed state law that dictates how such ballot measures should be written. The law, the firm says, does not specify using the equalizer.

The Oak Park elementary school district is seeking a $6 million increase April 5 which will bring its total levy to $48 million if it is approved. The district estimates the cost will be an additional $38 for every $1,000 in property taxes currently paid by property owners. The district is actively using that formulation to explain its request for a tax hike to voters. All sides agree that is a fair representation of the impact to a local taxpayer. The problem is that it is not the formulation that appears on the ballot question.

By not factoring in the state equalizer, ElSaffar insists that Dist. 97’s ballot question is inaccurate. Oak Park schools though are not alone in this situation. In at least nine other municipalities or school districts with referendum ballot questions on April 5, the same formula was used, ElSaffar says.

Chicago-based law firm Chapman and Cutler, which specializes in this field of financial law, helped Dist. 97 and many of those other municipalities draft their ballot questions.

Lynda Given, a partner with the law firm, maintained that her firm followed existing statute in each instance. She stressed that the statute does not include the equalizer.

ElSaffar acknowledged that point. But he said the statute, which was amended in 2006, does not state that the equalizer should be ignored altogether. In addition, it also doesn’t specify using any kind of tax rate, he says, yet, the firm does use a tax rate in drafting the question. As such, there’s nothing stopping the firm from calculating the equalizer as well, ElSaffar argues. Not doing so, he says, is wrong with respect to accurately estimating one’s taxes.

“If a taxpayer called me and I did not include the equalizer, they’d be furious with me; because if we forget the equalizer, the bill would be a third of what they’ll actually have,” ElSaffar said. “They’d be justifiably upset with me because I would have given them some bad information.”

ElSaffar doesn’t think Dist. 97 is intentionally trying to mislead voters. In fact, he says the district has been accurate in its public campaign but thinks its law firm misinterpreted the statute. He also sees no other problem with the ballot question as written.

Given, however, insists that her firm did not make any interpretation but simply followed the law explicitly.

District 97 board President Peter Traczyk said the district stands by the law firm, adding that the board did question the wording and numbers but ultimately accepted the firm’s counsel.

Since the board began deliberating last fall on the referendum and what form it should take—the board eventually settled on a rate hike option on Jan. 18—members insisted on having a clear message to voters. Members believed that the $38 per $1,000 in property taxes figure was the clearest way to state the impact on voters.

Traczyk added that the board vetted their numbers with their financial consultant, PMA Financial Network, and ElSaffar before drafting the ballot question. Traczyk said his board always felt that the actual ballot question would be confusing to voters no matter what numbers they used. That’s why the board has focused their campaign around explaining the actual impact, he said, and not relying just on the ballot question.

Kevin Peppard, an Oak Park resident, first contacted Wednesday Journal about the ballot question, threatening to sue the district if it passes. He’s since backed off that threat but still thinks it could face a legal challenge. Peppard, who opposed the district’s 1988 rate hike referendum (it failed that year but later passed in 1989), believes the district was given bad legal advice.

ElSaffar, himself a lawyer, thinks someone could potentially challenge the referendum in court, but referred back to language in the statute concerning “errors” within the question—”Any error, miscalculation, or inaccuracy in computing any amount set forth on the ballot and in the notice that is not deliberate shall not invalidate or affect the validity of any proposition approved.”

ElSaffar doesn’t think Dist. 97 deliberately made an error.

Speaking to Wednesday Journal Monday, state Sen. Don Harmon, who co-sponsored the 2006 law, maintained that the statute is clear and unambiguous as to how to calculate the impact on voters. He also noted that Dist. 97 has been accurate in its public campaign concerning the referendum.

“The law requires a taxing body to state the expected increase in taxes for a single family home with $100,000 of fair market value,” he said. “So if I have a home worth $300,000, and this referendum passes, how much am I going to pay in taxes?”

Ballot question

Shall the limiting rate under the Property Tax Extension Limitation Law for Oak Park Elementary School District Number 97, Cook County, Illinois, be increased by an additional amount equal to .374% above the limiting rate for any purpose of said School District for levy year 2009 and be equal to 2.600% of the equalized assessed value of the taxable property therein for levy year 2010?

(1) The approximate amount of taxes extendable at the most recently extended limiting rate is $41,049,718, and the approximate amount of taxes extendable if the proposition is approved is $47,946,660.

(2) For the 2010 levy year the approximate amount of the additional tax extendable against property containing a single family residence and having a fair market value at the time of the referendum of $100,000 is estimated to be $37.40.

(3) If the proposition is approved, the aggregate extension for 2010 will be determined by the limiting rate set forth in the proposition, rather than the otherwise applicable limiting rate calculated under the provisions of the Property Tax Extension Limitation Law (commonly known as the Property Tax Cap Law).

So what's the impact of D97's referendum?

As explained by Oak Park Township Assessor Ali ElSaffar, the state equalizer helps homeowners calculate their tax bills. A formula to do that is routinely printed on tax bills. He uses that formula to calculate the impact of Dist. 97's referendum on a property using the equalizer.

So, take a home, for instance, with $100,000 in market value and multiply that amount by the level of assessment, or 10 percent. That then gives you an assessed value of $10,000. That amount must then be multiplied by the equalizer—3.3701 as of tax year 2009, ElSaffar says. The equalized assessed value (EAV) of the home is calculated as $33,701. Next, take the estimated tax rate increase—in Dist. 97's case, it's a .374 percent increase—and multiply that by the EAV. That would bring the estimated tax increase on this particular homeowner to $126.04 per $100,000 of home value, according to the formula.

A. Market Value – $100,000

B. Level of Assessment – 10%

C. Assessed Value (Market Value x Level of Assessment, or A x B) – $ 10,000

D. State Equalizer (3.3701 is the state equalizer for tax year 2009) – 3.3701

E. Equalized Assessed Value (Assessed Value x State Equalizer, or C x D) – $ 33,701

F. Increase in Tax Rates (2010 Tax Rate with referendum minus 2009 Tax Rate, tax cap fund only) – 0.374%

G. Increase in Tax Bill (Equalized Assessed Value x Difference in Rates, E x F) – $126.04

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