By Alex Haglund
The State of Illinois Department of Revenue made an announcement on Tuesday, April 19, that due to a tax allocation error going back to 2014, they had overpaid the state’s many taxing districts (about 6,500 are affected) by a total amount of about $168-million from the Personal Property Replacement Tax Fund (PPRT).
Most of Washington County’s taxing district are also affected to one degree or another. A few of these include:
• Washington County, $25,330.09
• City of Nashville, $1,573.57
• West Washington Schools, $11,279.83
• Nashville Elementary School District, $25,592.11
• Nashville Community High School District, $32,228.86
“The county really has no control over that,” said County Board Finance Committee Chairman Gary Suedmeyer. “Ours, it’s going to be significant for us….I guess I just don’t understand how they could make that big of a mess up on there. This is just one fund there. I wonder how many other places have the same issue.”
“It says there that they’re going to work on this,” said Suedmeyer. “My feeling is, and don’t take this to be gospel, but they’re probably just going to withhold portions of that for the next year or two.”
“My understanding is, they’re going to recoup it over time…they’ll simply start prorating what we receive in personal property replacement taxes until they’ve recouped what they owe,” said NCHS Superintendent Ernie Fowler.
Nashville Primary School Superintendent Mike Brink stated that schools might be an even more complicated case than other taxing districts, effectively because the amount they receive in PPRT disbursements is figured into their formula for general state aid.
“CPPRT money is a huge factor in the general state aid formula,” Brink said.
What this means is that an overpayment in PPRT funds means that for the same amount of time, a school district would be underpaid in their general state aid. Add onto this the general budget tightness (and even more recently, Illinois’ complete lack of a budget), as well as the fact that general state aid payments are currently prorated, or even skipped, depending on the year, and the scope of the mess becomes even more clear (or less, depending on how you look at it).
Brink ran the numbers for District 49 and said that when you compare what they were overpaid from the PPRT fund and what that meant they were underpaid in general state aid, “It should be a wash.”
Does this mean that the districts, particularly the school districts, won’t need to pay back PPRT funds because they were underpaid elsewhere due to the error? Not likely, said Brink.
“I can’t foresee the state going back and refiguring those general state aid formulas. But if we’re talking about what should be and what’s right, if they overpaid on the CPPRT formula, we were underpaid and it should be a wash. But there is no way that’s going to happen, realistically.”
“We are certainly sensitive to the impact recouping these funds will have on some of our taxing districts,” said Connie Beard, Illinois Department Of Revenue Director.“We will be working with the impacted taxing districts to establish a plan to recapture the funds over an extended period of time.”
The Illinois Department of Revenue press release that announced the error and overpayment stated that the problems occurred due to the discontinuation of one type of tax form and revisions to two others. The release also stated twice that the error initially occurred “under the prior administration.”
An update by the IDOR from Monday, April 25 stated “IDOR has requested the Auditor General review our findings before finalizing a plan to recapture the funds over an extended period of time. Director Beard has announced that the earliest the department may begin to recoup the overpayments would be the January 2017 allocation.”
Locally, Washington County Taxing Districts did not do anything to cause this and have little recourse regarding whatever the IDOR decides for repayment. PPRT funds are not only distributed, but are calculated and computed all at the state level. This did occur due to any error, but it was not at a county or local level.
For the IDOR press release on the error and overpayment, please go to tax.illinois.gov/AboutIdor/PressReleases/PR-2016-04-19.pdf
An Excel File with all of the affected taxing districts, sorted by county, can be found at tax.illinois.gov/LocalGovernment/Disbursements/PPRT/PPRTAllocErrorReport.xlsx
The Nashville News will put the full information regarding Washington County Taxing Districts onto www.nash-news.com, and onto The Nashville News Facebook page.