The prospect that a new wave of Fort Sheridan property owners may be applying for a property tax freeze has prompted High School District 113 to consider filing for an exemption from the state’s historic preservation freeze program.
District 113 administrators are recommending the school board ask the Lake County Clerk to exempt the district from the historic preservation tax freeze. North Shore District 112 has been filing for the exemption annually for more than a dozen years.
The state’s Historic Preservation Tax Freeze program allows owners of historic properties to apply for an eight-year freeze in their equalized assessed value if they can document improvements equal to at least 25 percent of the property’s market value. After the first eight years, the full value is phased in over four years, with 25 percent of the higher value added onto the assessment each year.
The governing boards of school districts and other local governments can choose to exempt their taxing agency from the freeze by filing a request with the county clerk by the end of January each year. Such a request means the historic property’s actual value, rather than the frozen value, is used when calculating the homeowner’s individual tax bill and the tax rate paid by all taxpayers.
North Shore District 112 has filed the exemption request annually since 90 historic properties in Fort Sheridan, previously owned by the federal government, changed to private ownership about 15 years ago. The historic properties included former army barracks that became condominiums and the spacious residences of U.S. Army officers near the lakefront. The exemption, however, applies to any homeowner who has applied for the assessment freeze with the Illinois Historic Preservation Agency.
“District 112 brought it to our attention,” said Barry Bolek, assistant superintendent for finance in District 113. Bolek said there are some Fort Sheridan parcels that are opening up or may undergo a change in ownership that involve high equalized assessed values.
If High School District 113 joins District 112 in filing for the exemption, the freeze benefits would be drastically reduced, because the two school districts account for more than two-thirds of the property tax bill. The high school board is expected to vote on the exemption Jan. 26.
District 113 board member David Small asked for information on the financial impact to the district. He noted it was essentially a “zero-sum game” revenue-wise, because other taxpayers make up the difference.
“This is just how it gets allocated across taxpayers,” said Small. Bolek said the school district also realizes additional revenue the year a property or improvements come onto the tax rolls.
District 113 board member Debra Hymen said the freeze program was a matter of considerable discussion when she served on the North Shore District 112 school board.
“It became a chicken and egg discussion,” said Hymen, a local Realtor.
The rationale used by preservation advocates is that the tax freeze provides a financial incentive for homeowners to invest in their properties without being immediately penalized by higher property taxes. Some also felt that people were buying properties in Fort Sheridan specifically because of the tax break.
In the final analysis, North Shore District 112 opted to exempt the district from the historic tax break “because this is how we fund our schools,” she said. District 113 administrators are making the same argument in proposing the exemption.
North Shore District 112 board members voted unanimously, and without discussion Jan. 15, to renew the exemption request.