Below are scenarios when a taxing unit other than a school district or a water district is required to hold an election to approve the tax rate:
- A special taxing unit or a city with a population of 30,000 or more adopts a rate that exceeds the voter-approval rate;
- Any taxing unit other than a special taxing unit or a city with a population of less than 30,000 regardless of whether it is a special taxing unit adopts a rate that exceeds the greater of its voter-approval rate or de minimis rate. 17
Automatic Election to Approve the Tax Rate
Step 1: Order an election
The governing body must order the election to be held on the uniform November election date for the tax year. It must adopt the tax rate no later than the 71st day before the election date and order the election no later than the 78th day before the election date.
The election ballots must contain statutory language that permits voting for or against a proposition to approve the adopted tax rate. 18 While the Comptroller's office provides a Ballot to Approve Tax Rate, governing bodies should consult legal counsel for guidance.
Step 2: Act on election results
A simple majority is necessary to approve the tax rate in the election. 19 If the tax rate is not approved by a majority of voters, the taxing unit's tax rate for the current year is their voter-approval tax rate. 20
Petition for an Election to Reduce Tax Rate
In only certain circumstances, if a taxing unit other than a school district adopts a tax rate that exceeds the voter-approval tax rate but is less than or equal to the de minimis rate, voters in the taxing unit may petition for an election on the tax increase. 21 The taxing unit’s de minimis rate and adopted tax rate must meet specific requirements. 22 The election process is different when voters petition for the tax rate election.
Step 1: Determine if the petition is valid
The petition must state that it is intended to require an election to reduce the tax rate for the current year. 23 While the Comptroller's office provides a Petition for Election to Reduce-Tax Rate, persons who are considering circulation of a petition for an election to reduce the tax rate or a governing body that is considering the validity of a petition should consult legal counsel for guidance.
The taxing unit's governing body is responsible for determining if a petition for election to reduce tax rate presented to it is valid. Once the governing body determines that a petition is valid, it must adopt a resolution regarding its validity within 20 days of receiving it. If the governing body takes no action within that time, the petition is automatically valid. 24
Step 2: Order an election, if petition is valid.
If the governing body for a taxing unit determines the petition for election to reduce tax rate is valid, the governing body must order an election be held on the next uniform election date that allows sufficient time to comply with legal requirements. 25
The tax rate may not be adopted later than the 71st day and order calling the election may not be issued later than the 78th day before the next uniform election date. More information about election dates may be obtained from the Election Division of the Secretary of State's Office. 26
The election ballots must contain statutory language that permits voting for or against a proposition to reduce the tax rate for the current year from the adopted tax rate to the voter-approval tax rate. 27 While the Comptroller's office provides a Sample Petition Election Ballot to Reduce Tax Rate, governing bodies should consult legal counsel for guidance.
Step 3: Act on election results
A simple majority is necessary to approve the proposal to reduce the tax rate in the election and the tax rate for the current year is the voter-approval tax rate. 28 If the proposal is not approved by a majority of voters, the taxing unit's tax rate for the current year is the tax rate that was adopted by the governing body. 29
Tax collections
If after tax bills for the taxing unit have been mailed, the results of a tax rate election reduce the tax rate, the taxing unit's tax assessor must prepare and mail new tax bills. 30
Refunds
If the taxing unit has begun collecting taxes at the time of the election, some taxpayers may have paid taxes under the original adopted tax rate. If the tax rate is reduced to the voter-approval tax rate, the taxing unit must refund the difference between the taxes paid under the original tax rate and taxes levied under the voter-approval tax rate. 31
A taxing unit sends refunds resulting from an election if the refund amount is $1 or more. If the amount is less than $1, the taxing unit shall refund the difference upon the taxpayer's request. The taxpayer must apply for the refund of less than $1 within 90 days after the date the refund becomes due or forfeit the right to the refund. 32
After 60 days, taxing units must pay interest on refunds. 33 The interest is 1 percent per month, or part of a month, from the date that the election results were certified to the date the refund is mailed. 34