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Additional information about HB 186 and the ICC
HB 186, effective March 20, 2026, was one piece of several recently passed property tax reforms. The bill caps property tax growth on voted levies to inflation for school districts or JVSDs at the 20 mill or 2 mill floors, respectively. The ICC calculation is inflation-based by capping property tax growth to the rate of inflation as measured by a federal index. The credits are to be recalculated every three years when a county goes through a reappraisal or update.
The state was to reimburse school districts for credits given relating to tax years 2023 and 2024 in counties that had reappraisals or updates (districts that went through reappraisal or update in tax year 2025 are not impacted by the reimbursement provision). However, the ICC amounts given to taxpayers within a school district and reimbursement amounts provided to the school district in most cases did not match. This is because, instead of simply matching the district’s reimbursements to the ICC payments made, the law required separate calculation formulas for each. These calculations yielded differing results.
In concept, the reimbursement was to ensure that, until they went through a reappraisal or update, districts would not receive less property tax revenue than they received in tax year 2024. However, the reimbursement calculated “taxes charged and payable” in the current year versus tax year 2024. This calculation does not account for what may have happened in the interim, such as levies going on or off and budget commissions refusing to collect an otherwise approved levy.
As a result, some districts have received less reimbursement than the ICC withdrew from their revenues. And some districts received more reimbursement than the ICC withdrew. A preliminary analysis indicates the net result statewide was nearly $39 million in overpayments and $15 million in underpayments.
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