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The Tax Tab: Low income, high taxes

Round Lake has among the highest in area

Round Lake residents have a higher tax burden but a lower median household income than other places in the area.
Round Lake residents have a higher tax burden but a lower median household income than other places in the area.

Round Lake has its economic struggles. Its median household income is among the lowest in this part of Lake County.

Its property tax bills, though, are on the high end.

Lake County Suburban Life looked at the tax bills of area towns, using a house assessed at $100,000 as the benchmark, assuming no exemptions.

The tax bill for that house is $4,920 in Round Lake and $4,716 in Round Lake Beach. Only Grayslake is higher at $4,991. But Grayslake's median household income is considerably greater than the Round Lake area's, meaning that Grayslake residents are more likely to handle the higher bills.

Gurnee has the lowest tax burden in the area, with a $3,315 bill. That's because Gurnee is loaded with high-value real estate – Great America, a mall, plenty of stores. These businesses generate a lot of sales tax revenue, so the village government assesses no property tax at all, which is not unusual in retail-heavy towns. The tax bill for its elementary and high school districts amounts to $2,356, compared with $3,138 in Round Lake Area School District 116.

Statewide, schools typically make up 60 percent or more of a property owner's tax bill.

In 2009, Forbes magazine reported that Lake County had the highest property taxes in the Midwest and 17th nationally. Lake County's property taxes were 413 percent above the national average.

'Schools are the biggest culprit'

The Round Lake Area school district covers an area with less property value than others. One part of the community with a lot of value – the retail district on Rollins Road in Round Lake Beach – is largely in Grayslake's elementary and high school districts.

"That goes back to 100 years with the boundaries there," Round Lake Beach Mayor Richard Hill said. "We have students who go to the Grayslake schools who benefit from those retail developments."

Like Round Lake, the village of Grayslake lacks a major retail district; the county fairgrounds and the College of Lake County, both in Grayslake, don't pay property taxes.

Round Lake's school district has among the lowest numbers for property wealth – $68,148 per student, according to 2010 data from the Chicago-based Illinois Policy Institute, a conservative think tank. That compares with Gurnee School District 56 ($266,025), Lake Villa's Community High School District 117 ($486,500), and Fox Lake Grade School District 114 ($285,973).

The assessor for Avon Township, which handles the Round Lake area, Hill said, has lowered property values for years.

"I'm not sure why the assessments have dropped so much," he said. "[The township] dropped the values several years in a row. The first couple of years, I could see, but to continue it? There are some kind of rules they are following."

Assessor R. Chris Ditton hasn't returned calls for comment.

Hill also pointed to the schools.

"The schools are the biggest culprit. They continue to give increases to their staff not based on the economic times. That's always a problem," the mayor said.

In 2010, the average teacher salary in the Round Lake district, according to the Illinois Policy Institute's data, was $64,133, which was higher than Gurnee School District 56 ($60,008), Fox Lake District 114 ($51,100) and Grayslake School District 46 ($55,847), among others.

Bill Johnston, the Round Lake school district's assistant superintendent for business, said teachers' pay raises can't be blamed for rises in property taxes. He noted that Lake County is under the Property Tax Extension Limitation Law, which limits the total amounts that taxing entities can levy property taxpayers to the consumer price index. That was 1.7 percent last year and 1.5 percent this year, he said.

When teachers' salaries increase, Johnston said, the district has to cut other spending or find revenue elsewhere.

Constance Collins, superintendent of the Round Lake district, said the district is large with its student population, but has a small tax base.

"We don't have a lot of big businesses in the Round Lake community," she said. "There are a lot of concerns at the state level about funding of education. There are inequities. Our district is highly dependent on state funds. Each year, we wait with bated breath to find out what percent of funds we receive."

'Take pride in keeping tax rates low'

Grayslake Mayor Rhett Taylor said he could only speak for the village government's taxes, noting that the taxing bodies differ depending on the side of town.

The village government, he said, has been debt-free for at least 6 years.

"Being debt-free helps us be competitive in seeking bids for projects," the mayor said. "We have done cost containment. There's a head count we're not filling."

Fox Lake has a relatively low tax bill – $3,555 for a $100,000 house.

Village Administrator Anne Marrin said word has gotten out about the low tax bills.

"I have had calls from residents in other towns. They are asking about any new buildings [for housing]. Many of them are 55 and older," she said. "Fox Lake is a close-knit community. [The taxing bodies] think about their tax rates. We take pride in keeping tax rates low."

'Taking money from people who can't afford it'

Richard Longworth, the Chicago-based author of "Caught in the Middle," which is about the Midwest's troubled economy, said he opposed the way Illinois funds its schools.

"Anyplace where schools are financed by property taxes, someone is going to get screwed," he said. "Poorer communities have fewer assets to tax. Their houses aren't worth as much. They don't have as much industry or retail. To keep money coming into the schools, they have to keep taking money from people who can't afford it.

"Let's say you want to sell your house in Round Lake. They find out your property taxes are high. That makes your house less valuable," Longworth said. "That's a perpetuation."

Money means a lot in education, Longworth said, so underfunded poorer districts likely provide a substandard education.

"The kids who come out of these schools are less likely to go to college compared to wealthier towns. In college, they get the training they need to move to a better school district," he said. "Funding our schools through property taxes is guaranteed to perpetuate inequality. The legislature and others could change that, but they pay attention to the people who fund their campaigns."

And those people, he said, come from the wealthy school districts.

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