Blazing New Trails - Connexions

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CRITICAL ISSUES IN SCHOOL IMPROVEMENT
Experiences with PTELL in Six Illinois School Districts:
Leadership Perceptions and Student Performance
Keven D. Forney
Neil Sappington
Guy Banicki
The discussion of public education funding has been acrimonious, controversial, and is
sure to be debated well into the future. The State of Illinois has a complex formula for
computing State Aid for school district funding but the percentage of state revenue to schools
has decreased and local property taxation has been the majority source of funding for public
education. With the economy being in recession, there is no discussion of increasing State
revenues to increase funding for our schools.
In 1991 the Illinois General Assembly passed legislation that limited the amount of
local property taxes that may be levied for all municipal forms of government, which included
public school districts. The legislation was known as the Property Tax Extension Limitation
Law (PTELL). This legislation limited the amount of property taxes that could be levied
based upon the lesser of either a maximum of 5% or the Consumer Price Index, which most
recently has remained under 1%. The PTELL legislation permitted counties to conduct
referenda to decide whether to impose this tax cap or not. Currently, 39 counties of the state’s
102 have approved tax caps for their municipalities including local school districts. These 39
tax-capped counties contain over 52% of the school districts of the state (Olsen, 2001, July
23).
When compared to other measures enacted earlier in the “modern era” of property tax
limitations, Sokolow (1998) characterizes PTELL as a “cautious and limited” approach to
property tax limitation. PTELL attempts to limit the increase in taxes extended (paid) to a
taxing body in successive years to the lesser of either five percent or the percentage of change
in the Consumer Price Index for urban consumers (C.P.I.-U). The central feature of PTELL is
calculation of the “limiting rate,” which is the multiplier that is applied to the previous year’s
total extension (taxes paid to the taxing body) to calculate the maximum extension for the
current year (Illinois Department of Revenue, 2001). PTELL exempts from limitation any
property in the first year it appears on the tax rolls. Therefore, a taxing district experiencing a
relatively high level of new property each year could realize growth in the tax extension that
would be greater than either five percent or the change in the C.P.I.-U (Illinois Department of
Revenue).
Since 1991, when tax cap legislation was passed, numerous studies have been done
analyzing the consequences of this new law. In 1997, a study of the highly affluent counties
of Will, Kan, Du Page, Lake, McHenry, and Cook found a limited effect on school district
operating expenditures but no effect on school district instructional spending (Dye &
McGuire, 1997). Another 1998 study of school districts in the Chicago area revealed limited
evidence of any effect of tax caps on student performance ( Downes , Dye, & McGuire,1998).
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Keven D. Forney, Illinois State University
Neil Sappington, Illinois State University
Guy Banicki, Illinois State University