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Appellate Court Clarifies Truth in Taxation Law

Property Tax Publications

Last week the Illinois Appellate Court ruled that the Truth in Taxation Law does not require a taxing district to document its estimated property tax levy and that a public hearing is not required if a proposed levy is less than 105% of the taxing district’s prior year extension. This resolves two frequent questions taxing districts have when adopting property tax levies. First, the estimated levy required by the Truth in Taxation Law does not need to be in a formal document that is presented to the board. Second, if the levy is increasing by less than 5%, no public hearing is required.

Under the Truth in Taxation Law, not less than 20 days prior to adopting its levy, any unit of local government, school district or community college district with the power to levy taxes must determine the amount of money estimated to be needed from property taxes for that year. If the estimated property tax levy is more than 105% of the prior year’s extension, the taxing district must publish notice of its intent in a newspaper and hold a public hearing. The notice must appear in a newspaper of general circulation in the district, not more than 14 nor less than 7 days prior to the public hearing. The notice must include the time and location of the required public hearing, which may not coincide with the hearing on the district’s proposed budget. 

In Mandigo v. Stolman, the plaintiffs objected to the property tax levies of the county and township on the grounds that the taxing districts failed to hold public hearings or produce publicly available documents containing the estimated levies, even though the levies did not increase by more than 5%. The Court flatly refused to read these requirements into the Truth in Taxation Law. Instead, the Court focused on the plain language of the statute and read the law as a whole. The Court concluded that if the General Assembly intended those additional requirements to be part of the Truth in Taxation Law, then such requirements would have been explicitly stated. Since the General Assembly did not write those requirements into the law, the Court declined to do so either.

It is also worth noting how the taxing districts estimated their levies. The county’s estimate consisted of the annual budget, which was approved by the board and made available on the county’s website. For the township trustees and township road district, the estimated levy was simply mentioned at regularly scheduled October board meetings. Ultimately, the mere mention of the estimated levy at a public meeting was sufficient since the adopted levy was not more than 105% of the prior year’s extension.

The Mandigo decision represents another success in taxing districts’ efforts to push back on aggressive legal theories put forward in some tax rate objections. Such objections interpret statutes to include requirements that are not explicitly stated. Thanks to the Court’s rejection of objectors’ legal theory, taxing districts now have clear guidance that they do not need to have formally estimated levies or hold Truth in Taxation hearings when the levy is increasing by less than 5%.