beware of BS on property taxes

Adam Andrzejewski, Republican candidate for governor, posted the following to his Facebook page. I responded but my response quickly “disappeared”.

Adam Andrzejewski thinks that Illinois property tax is our most opaque tax. Most citizens have difficulty coming to grips with the complex terms, methods of determination, and appeals process. Furthermore, since many taxing bodies are represented on the same property ...tax bill, there is a lack of fiscal accountability. My objective is to create understanding through simplification and instill accountability through financial caps.

Property taxes weren't always so high. Forty years ago we had higher income taxes (and inheritance taxes) and low property taxes. Now the United States has lower federal income taxes, but Illinois has higher property taxes.

The Republican agenda at the national level has been to cut the federal income tax and devolve services to state and local government in the name of “local control”.

(At least part of the “local control” movement has its origins in the racist “state's rights” movement. “State's rights” was the battle cry of the segregationists who objected to the federal government using its power to enforce civil rights for African-Americans.)

In this expanded format, I will acknowledge the Democratic Party didn't resist the push to cut federal income taxes (and the inheritance tax) significantly. The Democrats now hold strong majorities in the U.S. House and Senate and aren't pushing to undue the tax policies of the Republicans.

The property tax has problems. If you buy a bicycle for $250, it's pretty clear what one should pay if the sales tax is 11%. If you make $50,000, it's pretty clear what one should pay if the income tax is 3%.

But how much tax should one pay on a piece of property? The same house could sell for a wide range of prices on any given day depending on the eagerness of the buyer and seller.

Andrzejewski is absolutely correct that the system of determining property taxes lacks precision. The Cook County Assessor has a secret formula. Based on my experience preparing hundreds of property tax appeals, the formula is pretty good. But assigning values to properties that haven't sold recently... it's a best guess.

Andrzejewski's second objection is bullshit. So what if multiple taxing bodies are on the same bill?

If Andrzejewski has concerns/objections about lack of accountability in government spending money he should advocate for laws that end the practice of paying taxes to one unit of government and then having that unit of government give grants to other units of government. This practice undermines accountability far more than having multiple line items for elementary school district, high school district, county, village, etc. on one tax bill.

Andrzejewski wants to simplify property taxes. In most tax systems simplicity is in tension with fairness. There are various programs that make property taxes more complicated: the senior exemption, the senior freeze and the homeowner exemption. Also, commercial and residential properties are taxed differently. Is Andrzejewski advocating elimination of any of the special programs? Perhaps advocating residential and commercial property get taxed the same way?

Or maybe Andrzejewski wants to have a flat tax where every homeowner in a community pays the same tax rate?

Republicans get so used to peddling bullshit that sounds good, sometimes it seems they can't have serious discussions about policy.

Capping property taxes is one of those ideas that sounds good until you get into the details.

Local government needs more money to operate from year to year. While I haven't done an analysis, I'm pretty sure this is driven by a few factors.

1.Health care costs increase faster than the rate of inflation
2.Schools are expected to do more (smaller classes, more special needs obligations)
3.TIF districts diminish the tax base forcing the remaining tax base to pay more
4.Government uses tricks to raid future revenue to delay the need to raise taxes (The City of Chicago leasing parking meters for 50 cents on the dollar is an egregious example of getting the money now while raiding the revenue stream for 99 years.)

The system isn't set-up so that local units of government can make do with the same amount of money from year to year. The system forces local units of government to raise taxes periodically.

I've met Andrzejewski. He invited me to take a trip to Kankakee with him. He's a nice guy. And sincerely concerned about reducing corruption. But just because someone's heart is in the right place doesn't mean that the policies s/he's advocating will work or are good policies.

you should appeal your property tax assessment

Last night I attended a meeting with Proviso Township Assessor Michael Corrigan and a representative of Larry R. Rogers, Jr., one of the three members of the Cook County Board of Review. The meeting was at the Forest Park Public Library and organized by Citizens United in Forest Park.

First the news you can use: Rogers is pushing to have a policy of automatically reducing property assessments to the 2006 level. If this policy is adopted you will lose out if you do not appeal your assessment to the Board of Review.

Each property in Cook County gets assessed a value. This value is based on the value of the property.

From the assessed value, the “equalized assessed value” (EAV) is calculated. The EAV takes into account the homeowner exemption, senior exemption, senior freeze and other special programs that are connected to the specific owner.

The EAV is then used to determine how much of the bill for local government the owner is responsible for. The cost of the taxing body (high school district, elementary school district, village, county, park district, library, etc.) is spread around based on the EAV. If the taxing body is entitled to one million dollars in taxes and you property is 1/100,000th of the EAV for the area covered, you owe $100 to that taxing body.

Reducing one's assessment indirectly reduces one's EAV. However, for middle-class, single-family homeowners there are already programs to limit the year-to-year increase of the EAV. So, reducing the assessment to the 2006 levels isn't quite as good a deal as it might be, but it will probably reduce your tax bill at least somewhat.

And remember since the taxing bodies are going to get their money, you are at a disadvantage if you don't apply for the reduction and your neighbors do.

And to reiterate, the automatic reduction has not been approved as policy, but Rogers is pushing for it. And it may be worth your time and effort to appeal your assessment to the board of review whether the automatic reduction is made policy or not.

Other news you can use: Proviso property owners have until November 24th to appeal assessments to the Cook County Assessor. There are multiple stages to the property tax assessment appeals process. First the Cook County Assessor sets a value on the property. The first level of appeal is to the Cook County Assessor. The next level of appeal is to the Board of Review. The final level of appeal is to the Property Tax Appeal Board (PTAB).

Recommendation: If you are appealing because your property is assessed more than comparable properties I recommend you file an appeal with the Cook County Assessor. After the Cook County Assessor grants and denies appeals for Proviso Township I recommend you do a new search for comparable properties. If the Cook County Assessor reduces the assessment on properties similar to your property you want that data include in your appeal to the Board of Review. You should submit a further appeal to the Board of Review. They are elected officials and they like to make people happy by granting at least small symbolic reductions.

If you are merely hoping for the automatic reduction Rogers is advocating, don't bother with filing an appeal with the Cook County Assessor.

delinquent property taxes

Forest Park Review, and I assume other local newspapers, published the list of people who are delinquent on their property taxes.

The Cook County Treasurer has the following explanation:

Annual Tax Sale Background Information

Under Illinois law, the Treasurer's Office is required to conduct two types of tax sales in which delinquent property taxes are sold.

The first is the Annual Tax Sale, held once a year, sometime after the Second Installment. If property taxes for the immediately preceding tax year are delinquent on a parcel, they are offered for sale to tax purchasers at the Annual Tax Sale. The sale might be held any time from the fall of that year to the spring of the following year.

Those interested must meet a set of qualifications to participate in the annual tax sale. They must complete registration materials and provide collateral or a bond. The registration materials include rules for the conduct of a tax sale.

The biennial Scavenger Sale (conducted in odd-numbered years), offers taxes on properties that have delinquencies on two or more years that were not purchased at the annual tax sales. In Cook County, the sale has traditionally taken place in the fall or early winter months.

For a complete understanding of the distinctions between these sales and how to proceed to tax deed, read 35 ILCS (Illinois Compiled Statutes) 200/1-1, et. seq. This information can be found in any law library.

Click here for information on what to do if taxes on a property you own were sold.

legislature overrides Blagojevich veto, extend 7% property tax increase cap

Oak Park Journal:

SPRINGFIELD, IL – Illinois State Senator Don Harmon (D-Oak Park) announced that legislation extending the 7% property assessment cap for an additional three years will become law. Senator Harmon joined his colleagues in both the Senate and the House recently to override the Governor’s veto of House Bill 664....

With the Governor’s veto overridden by both the House and the Senate, the last hurdle remaining for the proposal is approval by the Cook County Board, which is expected to meet on the issue soon.

I have an inkling that this issue is more complicated than extending cap good and not extending cap bad.

But I need to get more info to explain it.

Brookfield will raise taxes to provide recreation opportunities to disabled

Suburban Life (Dan Petrella):

A few months after joining a recreation association for residents with disabilities, Brookfield is considering levying an additional property tax — up to $25 a year — to pay for its membership.

In April, the Village Board voted to join the Downers Grove-based South East Association for Special Parks and Recreation – better known as SEASPAR – and to pay for the annual $60,000 membership fee out of the village’s general fund. But now other village projects are running over budget, and the board is expected to vote at its Monday, Aug. 13, meeting to approve a special recreation tax.

Cook County stuff

County Board President Todd Stroger (D-8th Ward) is considering a property tax increase. See CBS2 (Dana Kozlov).

Commissioner Tony Peraica (R-Riverside) is using his website for video clips to make his critique of Stroger. (h/t Bill Baar's West Side by way of Illinoize.)


Also, Kevin Robinson (Chicagoist) has a county roundup that includes Cook County billing a correctional officer for being stabbed by an inmate, allegations of patronage hiring in the Recorder of Deeds office and discussion of Peraica's "no confidence" vote on Todd Stroger.