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* As if the worldwide financial crisis isn’t bad enough…
Stunned homeowners are lining up at assessor’s offices across Cook County after opening up property-tax bills with whopping increases in recent days.
In a declining real estate market, many mistakenly thought their shrinking home values would lead to a smaller tax bite.
But north and northwest suburban homeowners, along with their counterparts in booming city neighborhoods, are in many cases facing double-digit increases—or worse. In the rest of the county, it’s not quite as bad.
“We have a lot of people who are confused because the current economic circumstances would lead them to believe that their assessment should go down,” said county Assessor James Houlihan. “Their actual tax liability has gone up.”
Fourteen companies statewide are laying off around 2,600 workers altogether, including hundreds from the Chicago suburbs, according to documents filed with the state.
* The region won’t directly receive much federal rescue/bailout money, either…
The U.S. Federal Reserve on Tuesday moved to ease a credit crunch that’s endangering the economy. But an expert says Chicago may not benefit as much as other big cities.
The Federal Reserve said it would buy massive amounts of what’s known as commercial paper. That’s a form of short-term financing that investors provide large companies for day-to-day operations.
Abol Jalilvand, the dean of Loyola University’s business school, says Chicago has less to gain from the Fed’s move than places like New York or Los Angeles. He says that’s because Chicago has relatively few large companies.
* And then there’s this…
Cook County sales dropped 11.94% in one month after the county instituted its new tax, new data released Tuesday shows, but just how much of that drop had to do with the tax is far from clear.
According to sales tax figures from the Illinois Department of Revenue, Cook County businesses reported $3.360 billion in sales in July, the first month the new 1.75% county sales tax took effect. Sales in June, when the county tax was 0.75%, were $3.816 billion.
However, a look at sales tax data from the last five years shows there has always been a drop from June to July, albeit never as large as this year. In 2004 the drop was 4.61%; in 2005, 7.57%; in 2006, 8.56%; in 2007, 6.67%.
What’s in our wallet?
posted by Rich Miller
Wednesday, Oct 8, 08 @ 11:18 am
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Previous Post: Implications of the Rezko letter *** UPDATED x1 ***
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So folks in Cook County are just now figuring out that high taxes and a poor business environment is hitting them in the wallet?
Gee, maybe we should elect a Chicago with similar poor ideas as president!
Comment by VanillaMan Wednesday, Oct 8, 08 @ 11:24 am
Some bumpy road ahead, but it has to happen every 10 years or so to purge the junk out of the system.
What’s in my wallet? Just cash. Credit cards are the worst form of financial crack.
Comment by wordslinger Wednesday, Oct 8, 08 @ 11:26 am
Off the subject but i see that the Rodster has signed SB790
Comment by topgun122 Wednesday, Oct 8, 08 @ 11:27 am
A Capitol One credit card?
Comment by Levois Wednesday, Oct 8, 08 @ 11:27 am
topgun, scroll down a bit. The story was posted here first, despite the SJ-R’s “exclusive” claim. lol
Comment by Rich Miller Wednesday, Oct 8, 08 @ 11:30 am
An overlooked reason why Chicago is getting the short end of the stick from the federal govt is the useless short sale ban. It’s hurting our options trading and some local funds.
Comment by Greg Wednesday, Oct 8, 08 @ 11:33 am
Houlihan and his peeps should be removed from office. He is essentially raping the people of Cook County and fleecing them. Wake up, people!
Comment by Team Sleep Wednesday, Oct 8, 08 @ 11:39 am
Property taxes and assessments being lowered because the value of property and homes has declined?
You would think that this would be the case but in the property tax assessment world, it never seems to happen.
Comment by Louis G. Atsaves Wednesday, Oct 8, 08 @ 11:40 am
Point 1; let us all understand how state law asks assessors to value property. Assessors must value property as of January 1st of the assessment year. By law assessors must use sales of homes from the three years prior to the assessment date. People that are paying taxes this year are paying based on an assessment date of January 1st 2007 which means the assessor was mandated by law to use sales date from 2004, 2005 and 2006. We all know the Real Estate market is much different now than in those three years.
Point 2; all of this is immaterial. If assessments would be cut in half your taxes would not go down. The reality is that taxing bodies are legally able to ask for more money each year up to a certain point. The assessor’s job is to distribute this tax burden across the properties affected. What this means is the tax burden is predetermined by the people that spend the money and not developed by the assessor.
Here is a simple formula to figure this out. Levy (taxes requested) divided by Equalized Assessed Value (add up all the value of the properties in the district) equals tax rate. Levy/Assessed value=tax rate. If the levy remains the same and the assessed value decreases, pure mathematics determine the tax rate will increase. So even if your assessed value decreases the taxing bodies will still get their money because the tax rate will rise to make up the difference.
Comment by Just Asking Wednesday, Oct 8, 08 @ 11:56 am
“Property taxes and assessments being lowered because the value of property and homes has declined?
You would think that this would be the case but in the property tax assessment world, it never seems to happen.”
Just wait - if you are in a Property Tax Limitation County (Tax Cap), it’s going to get worse.
This is actually one of those times where it’s actually better to be in a non Tax Cap county. Seriously.
Here’s why. Two years ago, the GA passed legislation allowing for tax capped tax districts to have greatly increased maximum tax levies, or even on a number of different funds, no limits. Now for the non-capped districts, the existing maximum tax rates still apply.
So the max. tax rates for “capped” tax districts greatly increased. Then, look at how the Tax Cap actually works. For “capped” districts, the formula uses the highest extension of the prior 3 tax years as part of the calculation formula.
So, if 2006 taxes pay 2007 tax bills was the highest of the prior 3 years, then that’s what gets used in the tax cap calculations for that specific “capped” tax district.
So, in combination, even with falling assessments, the “capped” tax districts get to use the highest prior year extension, and with changes to the maximum tax rates for most funds, those tax rates are just going to skyrocket.
Think of it as assessments go down 20% over time, tax rates go up by that much or even more over the same time frame.
In a non-tax capped county, not necessarily the case. The maximum rate limits were not raised, so once they hit those limits, they’re stuck.
So everybody in Cook and the Collars had better suck it up, because not only are we going to be getting hurt on housing prices, but our tax rates will probably be increasing. Nice, huh?
Comment by Judgment Day Is On The Way Wednesday, Oct 8, 08 @ 12:01 pm
The concept of paying taxes on the assessed value of a home is beyond ridiculous. There is no benefit to the homeowner unless he or she sells their house. Perhaps the concept made sense when assessed values increased or decreased gradually over a long period of time, but irrational boom markets completely skew the system for homeowners. But not for politicians. They have gotten drunk on the huge increases in tax revenues. The new money fueled substantial increases in the grease that keeps their power gears humming: lots of new employees, incredible health and retirement plans for their minions, huge deals for the insiders who fund their campaigns. There is no logic to paying for unrealized as a benefit increase assessed home values. You can’t eat the ‘increased value’, your boss does not increase your salary to take into account the machinations of the assessor’s office, it does not pay for your kid’s college unless you take out a second mortgage…It’s time for a tax revolt. California did it. We can do it. It’s time.
Comment by walter sobchak Wednesday, Oct 8, 08 @ 12:46 pm
Housing prices in poorer areas have dropped like a fat man without a parachute. In some towns there are foreclosed homes saturating the market for sale much cheaper than yours, making it nearly impossible to sell in those areas. We had our Cook County home on the market for more than a year. There were more homes on the market than those seeking homes. We took a nasty loss to get out. Our choice was take an immediate hit and lose some dough on the sale, or stay and take hit on the taxes.
Now the tax issue is public, making those houses even less desirable. Those who can afford don’t want to be there. Those who can barely afford the little “affordable” house are the ones buying. They cannot afford the BLOATED taxes. This will lead to many more foreclosures. Hang onto your hats, its gonna be a bumpy ride.
Comment by Say WHAT? Wednesday, Oct 8, 08 @ 12:54 pm
The Republicans have been pushing to reduce the federal income tax since 1981. The effort went into high gear when Newt Gingrich and the GOP took over Congress in 1995.
When the federal government cuts taxes, but not government spending, what they are often (usually?) doing is passing the cost of providing services to state and local government.
In the time since 1981 has your income tax rate gone down? How about your property tax rate?
The Republicans know what they are doing. They aren’t cutting the size of government. Hell, it’s grown under Bush and the GOP Congress more than ever. The Republicans are cutting taxes on the wealthiest Americans (and largest corporations) and leaving it to middle-class homeowners to make up the difference.
Part of the reason the GOP agenda has been so successful is that the Democrats haven’t pushed back. The Democrats think taxes are a losing issue for the party so they don’t talk about taxes.
Our political discourse has divorced the idea of having a program, war or tax cut from the reality of paying for the program, war or tax cut.
You can prop things up with BS for awhile, but eventually the bill comes do.
To bad the @$&holes in the Dem Party and the media who allowed these immature GOP policies to pass unquestioned won’t be the ones suffering.
But I don’t entirely feel sorry for American voters. They bought the con the Republican Party was selling that we could have a war, tax cuts and a prescription drug give-away without paying for it. Somebodies peddling something that sounds too good to be true, it probably is.
Comment by Carl Nyberg Wednesday, Oct 8, 08 @ 12:59 pm
Federal spending has never been constrained by federal tax receipts. They just borrow.
If you really want to identify how the feds have messed up the states, look at all the ways the feds subsidize state-provided services, but with strings attached. For example, we “have to” comply with No Child Left Behind if we want federal funding. What percentage of our revenues come from federal transfers? And haven’t those transfers made the states something like wholey-owned subsidiaries of the feds, rather than independent governments?
It’s also a little questionable to take federal money to run state programs, and then to complain about high federal tax rates, which many state politicians do.
Comment by Anon Wednesday, Oct 8, 08 @ 3:30 pm
I feel for the Cook Co. homeowners. I used to deal with many of them on a daily basis.
Not only are some of the assessments in Cook Co. a bit excessive & non-uniform, getting any relief is next to impossible.
Most taxpayers do not receive any sort of reduction in their assessment when they meet with the Cook Co. Board of Review. If they do receive a reduction (which was rare based on the amount of appeals), it is typically rather modest & not much of a break.
Their next hope is the State of Illinois Property Tax Appeal Board (PTAB).
I once worked for PTAB. The vast majority of the property tax appeals we received were from Cook Co. Roughly 10-15K Cook Co. appeals per year vs. 2K appeals for all 100+ remaining Illinois counties combined.
Our Des Plaines office was closed in 2004, shifting the workload to the Springfield office.
As a result of losing 60+ employees & seeing our workload increase over 5 times the normal volume, we fell anywhere from 2-3 years behind in rendering decisions.
Imagine talking to a homeowner who can barley afford their property taxes & having to tell them that they can expect a 2-3 year wait before any decision is rendered on their appeal.
Thank goodness I don’t live in Cook County!!
Comment by jagsfan217 Wednesday, Oct 8, 08 @ 3:38 pm
Not much left in my wallet. My homeowners exemption decreased from $1,500 to $130 annually. I’m told that the reduction of the exemption is a result of the phasing out of the 7% cap. I’m so glad we have effective legislators.
Comment by James the Intolerant Wednesday, Oct 8, 08 @ 3:49 pm
Although I miss Chicago, I am SOOOooo happy to no longer live there. It is an absolute mess in so many ways!
After 12 years of insider political games, even Obama couldn’t change a thing. And he thinks he can be president? LOL!
Comment by VanillaMan Wednesday, Oct 8, 08 @ 4:00 pm
VMan, you’re like the Walter character in “The Big Lebowski” — no matter the subject or situation, it always came back to Vietnam — “I didn’t watch my friends die face down in the muck of Danang for this.”
With you, it’s Obama.
Comment by wordslinger Wednesday, Oct 8, 08 @ 4:06 pm
“Most taxpayers do not receive any sort of reduction in their assessment when they meet with the Cook Co. Board of Review.”
Respectfully, this is simply 100% not true. Most homeowners who appeal to the Board of Review do receive a reduction. Frankly, it’s really too easy, and their methods are suspect.
The Assessor’s office, on the other hand, is a waste of time for most homeowners.
Comment by Gene Parmesan Wednesday, Oct 8, 08 @ 4:24 pm
Gene, the method of getting a reduction is not suspect at all. You just simply hire Ed Burke or some other clout-heavy lawyer.
It’s all quite in the open, actually.
Comment by wordslinger Wednesday, Oct 8, 08 @ 4:26 pm
Very true wordslinger, can’t disagree with that. But in addition to the niche industry created by campaign contributions in return for reductions, the methodology used by the analysts at the Board of Review is outside of accepted assessment practices. Same for the Assessor.
Comment by Gene Parmesan Wednesday, Oct 8, 08 @ 4:30 pm
I sometimes wonder what goes through the minds of the powers that be in our governmental bodies. The economy is a shambles world-wide, people are working harder with no hope of improving their lot, food is through the roof, taxes, home and otherwise, unbearable. So if these folks running the show see that people can’t afford to pay their mortgages, gas bill, etc., why do they think they can get more money out of them for increased taxes? All they will get is a home with a tax lien on it that they won’t be able to sell either. Net gain to all, zero.
Comment by Disgusted Wednesday, Oct 8, 08 @ 4:31 pm
Re: more newspaper layoffs– the Suburban Journals, a chain of between 22-35 free distribution papers in the St. Louis ‘burbs, just announced they are switching to a subscription-only basis. After cutting 45 jobs recently, Lee Enterprises outsourced ad layout jobs to India. Lee also has a HUGE debt payment due next year— my magic 8-ball keeps coming up “Chapter 13″
Comment by Vote Quimby! Wednesday, Oct 8, 08 @ 5:00 pm
http://blogs.riverfronttimes.com/stlog/
2008/09/sububan_journals_also_
shedding_employees_st_louis_pos
t_dispatch_45_fired_september_26_2008.php
Link to the story—BTW this is fresh signs of newspaper death throes. It’s not pretty yet I can’t look away…
Comment by Vote Quimby! Wednesday, Oct 8, 08 @ 5:01 pm
When I was in Davenport, Lee was golden. Bedrock. It’s a new day.
Comment by Anonymous Wednesday, Oct 8, 08 @ 7:00 pm
So HSBC is moving jobs out of Illinois. Even after BLOGO gave them $14.2 Million in Illinois Opportunity Returns money from DECO in July. http://www.commerce.state.il.us/dceo/News/pr07212008.htm
Comment by jimbo Wednesday, Oct 8, 08 @ 8:54 pm
Speaking of GOP misfires, here is the background on WhackyJack’s attack of Obama earmarks…StatewieTom should be proud….
Adler president to McCain: Sky machine not an overhead projector
ADLER | McCain ripped Obama in debate for backing $3 mil. device
Recommend (8) Comments
October 9, 2008
BY ANDREW HERRMANN Staff reporter/aherrmann@suntimes.com
The president of the Adler Planetarium lifted a black cloth off a familiar schoolroom device Wednesday and declared, “That’s an overhead projector.’’
Behind Paul H. Knappenberger Jr. was an automobile-sized machine. That, he said, is a “planetarium projection system.’’
» Click to enlarge image Adler President Paul H. Knappenberger Jr., talks about the Adler’s Zeiss Mark VI projector in the Sky Theater, clarifying that it is not a simple “overhead projector,” which was brought out for comparison.
(Jean Lachat/Sun-Times)
The overhead, “you can probably get for $10 or so on eBay,’’ said Knappenberger.
But to replace the Adler’s sky machine, which creates stars on a domed ceiling, would cost $3 million to $5 million.
Knappenberger felt obligated to distinguish the two after Sen. John McCain, during Tuesday night’s presidential candidate debate, criticized Obama for trying to win federal support for a new star device, calling it a “$3 million overhead projector” and dismissing it as a “pork barrel earmark.’’
Knappenberger said the mention put the Adler “in front of the American public as having been frivolous or foolish in asking for $3 million for an overhead projector.’’
“I just wanted to clarify that is not the case,” he said.
O
Comment by EmptySuitParade Thursday, Oct 9, 08 @ 7:29 am