Shorewood Schools Stand to Benefit from Assessor's Error

In an ironic twist, that has village officials scrambling to avoid an $2 million artificial increase in Shorewood's property tax levy could actually result in an increase in state aid to the school district.

Shorewood schools stand to see a hike in state education funds in the coming years because of an error that overstated the value of the village's Tax Incremental District No. 1.

While state aid is already set for this year, Business Manager Mark Boehlke said the district will see an increase in aid next year because of the error. And even when that aid drops in subsequent years to compensate for next year's increase, Boehlke noted that there is a 15 percent cap on state aid decreases in any given year.

This is because state officials use the value of the village, excluding the special taxing district, when calculating the district's state aid. And while the total value of Shorewood is overstated because of the error, the value excluding the special taxing district is actually understated, resulting in the increase of state funds, Boehlke said.

“It should benefit the levy next year. We should have to levy less because we are getting more state aid,” Boehlke said.

But after talking with the state Department of Public Instruction, Boehlke said it's possible that state officials may find a way to avoid increasing aid to Shorewood because it would give the district an unfair advantage over other districts.

Other than state aid, the error, made by Mark Brown of Associated Appraisal Consultants, Inc. which values the special taxing district as $77,000,000 rather than its true value of $77,000, doesn't affect the district outside of giving officials an exaggerated tax rate. The district wouldn’t ask property owners to pay any more on their tax bills because of the error, Boehlke said.

School officials use the total value of property in Shorewood, which it now skewed due, to the error to determine what the tax rate will be each year, but as the value is incorrect, so is the number officials are getting.

Boekhle said an analysis by the village's financial consultant, Ehlers and Associates, would have the school district's tax rate at $13.29, a 19-cent increase from last year, as opposed to $14.00, a figure calculated using Shorewood's equalized value.

Property owners can expect an extra $57 on the tax bill of a home assessed at $300,000, from last year's bill, on the district's portion of the tax bill.

The School Board recently approved an $18.29 million tax levy, an $88,573 or .05 percent increase from last year and a $21.78 million budget.

While the district can benefit from the error, village officials have been proactive in addressing the mistake because it forces them to levy an additional $2 million.

Village officials follow a similar route when setting their tax levy but taxing districts have their own levies, which are calculated through a formula, village Finance Director Stephanie Walker said. They have no choice but to increase their levy due to the mistake.

However, the village hopes a will solve their levy issue. last week.

Additionally, the village , an arm of the state Department of Revenue, arguing that Shorewood shouldn’t be forced to harm property owners with additional taxation.