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Once again, something stinks *** Updated x3 ***
Monday, Oct 2, 2006 - Posted by Rich Miller The governor’s office was not happy that Eric Krol and Kristen McQueary wrote stories about the governor’s property tax assessment, but there appears to some there there. The reason for the stories was that the guv’s assessment rose by just 1 percent this year, while his neighbors’ assessments skyrocketed. The assessor’s office claims that the reason for the low assessment increase was because he was hit harder than his neighbors three years ago. But that doesn’t appear to be the case. * Krol: A look at the 156 residential properties nearest Blagojevich’s Ravenswood Manor house — the east-west streets of Wilson and Sunnyside avenues and the north-south streets of Richmond Street and Sacramento Avenue — shows the average assessment increase was 36.7 percent this year. The other 155 properties all had at least double-digit increases. Homes of the same real estate class as Blagojevich’s — one-story homes 1,801 square feet and up — rose an average of 22.8 percent. […] * McQueary: In an environment of climbing assessments and amid a push by Cook County Assessor Jim Houlihan to control wildly increasing home values, it seems strange that a chic 3,817-square-foot home, the governor’s, would dip in assessed value. No way is his market value $424K. Not in that neighborhood. No way. I hear that Assessor Houlihan plans to hold a press conference today to rebut the allegations in the two published stories. Stay tuned. *** UPDATE *** There won’t be a Houlihan press coference. *** UPDATE 2 *** Rep. John Fritchey (D-Chicago) had some harsh words about the governor’s property taxes on his blog today in a post entitled “Must be nice.” The Governor lives in the north end of my district, about 3 miles away from me. And I can tell you that I don’t know of ONE person between my house and his that wouldn’t give a limb for a 1% increase in their assessment. My constituents (and I) are getting pounded by property taxes, and we are getting no help from the Governor’s office in trying to find a solution to this issue. *** UPDATE 2 *** AP: …Jay Stewart, the executive director of the Better Government Association and resident of the city’s northwest side, said the governor’s property tax assessment is enviable. *** UPDATE 3 *** I received a response from Lucio Guerrero the spokesman for the Cook County Assessor’s office, but most of it was so full of red herrings and misdirection that I won’t put it here. However, to show you what kind of push-back there’s been on this story, I am including one paragraph. Unfortunately, the reporters didn’t let the facts get in the way of their “scoop.†The reality is, this story has been shopped around for weeks and most responsible journalists took the time to educate themselves on the process and opted to take a pass. What a jerk.
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- property tax appeals expert - Monday, Oct 2, 06 @ 8:34 am:
the so-called “market value” the assessor gives for properties is actually MUCH LESS than the actual market value for ANY given property. Look at random properties. A better way to determine real market value is to take land + improvement Assessed Valuation and multiply by 10. This is the real market value . This is the case for every home in cook county. Does anyone ever get an estimated market value from the assessor that is not woefully under the true market value ? This is a public relatoins bamboozle done to every homeowner.
- Wumpus - Monday, Oct 2, 06 @ 8:45 am:
Wow, the gov can’t/won’t pay his “fair share”? It may not be the big scandals (federal investigations) that do him in, but the simple things. Things that people can relate to, although more minor. Next, re-assess Merchendise Mart.
- VanillaMan - Monday, Oct 2, 06 @ 9:09 am:
Like so much that happens under his watch, this stinks too. Had enough?
- leigh - Monday, Oct 2, 06 @ 9:23 am:
This is the kind of thing that the “average” voter gets really angry about. Rutan and Veteran preference are complex issues but $1500 birthday checks and cheating on your property taxes- everyone gets that. Was it Machevelli that said if your going to tell a lie tell a big one, more people will believe it. It is the small stuff that will kill you.
- Truthful James - Monday, Oct 2, 06 @ 9:24 am:
If a Democrat Assessor can’t help his democrat friends, what is politics for.
But seriously, folks, you ain’t seen nothing yet. The system is Cook County is so far out of kilter that teh State, reviewing Sales ratio studies for the prior year gets to apply an Equalization Factor. It is the Equalized Assessed Valuation against which the Tax Rates are extended. It is applied to all classes of property, hiding the true assessments from the lower ones and the commercial assessments from the residential.
Cook County rates an amazing equalization factor to bring everything to 33 1/3 percent of “estimated market value.”
Reflecting continuing mismanagement in the assessor’s office and the wisdom of employing politically connected lawyers, including Judge Burke’s husband and Fast Eddie V, the Equalization Factor for Cook County properties is now above 2.60x
To use some simple but ridiculously low numbers:
A house with land are assumed to have a market value of $100,000.
If it were outside Cook County, the Assessor would assign a value of $33,333. If all his work were equally precise, the State would sign an Equalization Factor of 1.0 and the EAV would reflect that value.
Inside Cook County is another conundrum. For a long time the Assessor was valuing residential property at 10% instead of the County law requiring 16%. He has now been required for other reasons to restore the assessment to its staututory ratio of 16%.
The taxpayer property above receives an Assessed Valuation of $16,000, provided the market value estimate is correct.
Now comes the Equalization Factor of 2.6, setting the taxable (Equalized) Assessed Valuation at $41,600. Ouch!
If the State adheres to the constitutional standard applied to all counties this means that the estimated market value of the property by the State is $124,600 (the EAV times 3.)
This is 24.6% above the estimated market value assigned by Cook County. But is it above the real value in the marketplace?
But a breakout in Assessment levels dows not mean a huge increase in taxes. Most taxing bodies are limited by a combination of maximum tax rates and by limits on the amount of dollars which may be included in the annual tax levy.
But that is another story. The purest methodology would be to set Assessed Values and do not let tehm increase until improvements were made or the property was sold. Value all properties for taxation at 100% of estimated market value. Get the State outy of the Equalization business except for its own need to distribute money, most certainly not to corrupt the tax base.
- Anon - Monday, Oct 2, 06 @ 9:37 am:
Absolutely, un-FREAKIN-believeable!
I own a house in Chicago, a couple of neighborhoods over from the governor. I’m supposed to get my reasessment notice next month, and will be ecstatic if it’s anything less than 40%. In the past 15 years that I’ve been a homeowner, my reassessments have ranged from 35 to 50% increases each time.
The process is out of control and the numbers don’t correspond to market value, but that says nothing about whatever happened with the governor’s house. The First Lady runs her own real estate business - if there was a problem with the assessment she would have known and would have appealed it.
The official statements remind me of Luis Gutierrez a few years ago. He built a new house on a vacant lot, but the assessment stayed the same as when it was vacant. His response was that he just paid the bills and didn’t notice that it didn’t go up. Yeah right.
This one will really resonate, as hundreds of thousands of homeowners in Chicago and elsewhere are really hurting from these tax increases. This one will hit home.
- Northside - Monday, Oct 2, 06 @ 9:51 am:
This one could be the bombshell. I’m a Dem homeowner and absolutely furious over this. He can dismiss friendly contracts. He can blame a few bad apples for corruption. But don’t tell me I’m getting screwed on property taxes while that weasal gets a sweetheart deal on property taxes. This one will resonate with anyone that’s opened up an assessment that increased by 45% and it’s not going to be pretty for him. Can’t wait to hear how he spins THIS one.
- Bill - Monday, Oct 2, 06 @ 9:52 am:
Anon,
It won’t hit home because there is no substance to it. See Truthful James’ excellent explanation of the EAV and market value. $424k for a home worth about $1.2 million is about right.
I expect this kind of cr@p from Krol but I am dissapointed in Kristen. She is usually better than this.
- OneMan - Monday, Oct 2, 06 @ 9:56 am:
Seriously Bill can anything involving this governor be at all negative to you.
Keep digging for that pony you find it one of these days.
- fed up - Monday, Oct 2, 06 @ 10:31 am:
My assesment went up by %33 this guy is a crook plan and simple selling jobs and contracts and now cheating on taxes this guy makes Ryan look small time. Flash a smile refuse to talk to the press and throw a few million dollars worth of negative ads he knows how to stay in office, but the feds are going to get him.
- Anon 9:37 - Monday, Oct 2, 06 @ 10:41 am:
Bill-
You missed the point. As I said, the system is messed up. But if the governor’s house is properly assessed, then all of his neighbors are over-assessed by about 40%. I’m not sure which scenario is the greater sin.
It’s not the assessed values that mean anything in a situation like this, it’s the relationship to comparable properties that matters.
- Little Egypt - Monday, Oct 2, 06 @ 10:43 am:
It’s no surprise Houlihan won’t have a press conference today. The first, last and only debate is supposed to be tonight. All of Elvis’ boys are hunkering down until tonight’s onslaught is over. Gee perhaps there will be no “Press Conference Of The Day” either. Buddies taking care of buddies is all this is. It’s not right, but that’s all it is.
Pingback IlliniPundit.com » Blog Archive » Gov. Blagojevich’s Property Taxes - Monday, Oct 2, 06 @ 10:44 am:
[…] By the way, with all the local talk about property tax assessments and rates, you may be interested in this: The governor’s office was not happy that Eric Krol and Kristen McQueary wrote stories about the governor’s property tax assessment, but there appears to some there there. The reason for the stories was that the guv’s assessment rose by just 1 percent this year, while his neighbors’ assessments skyrocketed. The assessor’s office claims that the reason for the low assessment increase was because he was hit harder than his neighbors three years ago. But that doesn’t appear to be the case. […]
- Truthful James - Monday, Oct 2, 06 @ 11:11 am:
Bill –
Sorry, you may choose to remove the word excellent from my report, but you came to a different number.
I am confused that Krol’s report indicated an AV of $57,365 but that did not include the land. Normally the AV reported is all in — land and improvements. But anyway, let’s consider that the AV three years ago was $67,231. Increasing 1% per year brings it to $69,249. If the AV was as above and the assessment ratio was done close to the legal rate of 16%, the Assessor’s market Value estimate would be $452,799.
The State Equalization Factor of 2.6 raises the Equalized Assessed Valuation to $180,042. If that were the 33 1/3%, the State’s concept shows a market value of $546,187. That is estimated market value, Bill
What looks wickedly funny at the County levelis that there is a difference in the assessment ratios applied to different properties.
In gross it is easily concealed, but individually it all comes out. If, as you say, Bill, the house has a true market value of $1.2 Million, aimple arithmetic shows that the number divided by the resultant AV provides, as County Assessment Ratio a dividend (no pun intended) of 5.77%.
That low assessment ratio, applied to a favored group, mitigates the effect of the high State Equalization factor.
Finally, the Krol article indicates that there was, generally, a huge jump in County applied AV for all properties three years ago: 40% for the governor, 43% for the rest. What happened was twofold.
The County had to get their valuations in line with their own statute. The de facto use of a 10% valuation for every resident (but not for the more favored) put the assessment ratios for commercial property in jeopardy.
Large property owners were convincing the State Property Tax Control Board to lower valuations and rebate taxes previously collected because the assessment ratios used by the Assessor exceeded the ratios permitted under the State statute.
I estimate that twenty percent was related to partially realign the County’s valuation and the remainder was due to inflation.
- Guy Fawkes - Monday, Oct 2, 06 @ 11:14 am:
Eeny. Meeny. Meiny. WHOA!
More lies, excuses, etc.
Suppose this is Ryan’s, Topinka’s or Whitney’s fault/doing?
- Bubs - Monday, Oct 2, 06 @ 11:21 am:
Tellin’ ya Rich, the house, the house.
- Wheres the leadership??? - Monday, Oct 2, 06 @ 11:32 am:
I see a new JBT commercial for Chicagoland….HAD ENOUGH???
- Animous - Monday, Oct 2, 06 @ 11:33 am:
I’m not always a real wiz with numbers, especially property tax calculations (and neither is the voting public).
Can anybody give an estimate of how much actual money the Blago family is shorting the local tax base???
- Carl Nyberg - Monday, Oct 2, 06 @ 11:45 am:
Conceivably Blagojevich may be innocent of wrongdoing in a technical sense on this one. If someone in Houlihan’s office did RB a favor without telling him….
But what’s the point of doing someone a favor if you don’t get credit for it?
If Blagojevich did ask for a favor on this, it’s sorta like the check scandal. Presumably Blago can pay his property taxes no problem. So he just wants to live better because he feels he deserves it.
- Rep. John Fritchey - Monday, Oct 2, 06 @ 11:46 am:
Rich,
Thanks for the mention. Let me clarify that I am not insinuating that the Governor did anything wrong with respect to this particular situation.
What I am saying though, is that this is an issue that his neighbors will take notice of, and that it will not sit well with them.
As some of your commenters here and on other threads have correctly pointed out, it is the simple things that will resonate with the electorate, and right now, few issues resonate as loudly in my community as does their property tax bill.
- Wumpus - Monday, Oct 2, 06 @ 11:55 am:
Well, when the neighbors get wind of this, I expect a lot of JBT/birkett signs to go in their yards. A priceless campaign pic if it happens.
- Truthful James - Monday, Oct 2, 06 @ 12:15 pm:
Animous,
It is hard to tell how much teh Governor cost. The whole set-up is so jerry built (perhaps purposefully), so gamed by the special interest lawyers that it is hard to tell,
If the ratio is supposed to be 16% and one house has a true ratio of 5.77% and others have higher ratios (say a true ratio of 10%) one must go to the relative tax rates to determine how the Governor profited. Without going further, one must look at the taxes of each house and subtract the difference to show the net savings to the former and thus the net cost to everybody else.
The Cook County system lends itself to corruption. The only solution is the one I proposed earlier.
- Rep. John Fritchey - Monday, Oct 2, 06 @ 12:18 pm:
The best solution would be acquisiton-based assessment.
- Rep. John Fritchey - Monday, Oct 2, 06 @ 12:20 pm:
Or ‘acquisition’ even
- Carl Nyberg - Monday, Oct 2, 06 @ 12:35 pm:
Rep. Fritchey, what do you mean by “acquisition-based assessment”?
One of the many problems with the property tax is that any given property could sell for a wide range of prices on any given day, depending on the sellers or buyers involved.
So one can always debate the value of property.
- Rep. John Fritchey - Monday, Oct 2, 06 @ 12:51 pm:
Carl,
The Reader’s Digest version is that assesssments would be pegged to purchase price, capped at a small percentage increase per year, but not fundamentally readjusted until the next sale of the property, which would then provide a fair-market value of the property. Obviously, safeguards must be in place to protect against sham transactions, but it’s very doable.
It provides fairness, predictability, and for reasons to lengthy for me to type right now, much greater transparency in the process.
Give me some time, I’m working on the issue.
- Rep. John Fritchey - Monday, Oct 2, 06 @ 12:52 pm:
too
- Animous - Monday, Oct 2, 06 @ 12:56 pm:
Truthful,
Thanks. I guess my point is that if nobody can boil this issue down to a clearly understandable monetary amount, it really becomes a non-story…
I.E.: “The Blago family got a $2,000 tax break (or 500, 5,000 , or 10,000)” sounds like a better story than “The Blago family got a break on their Taxable Equalized Assessed Valuation increase rate”…
- Carl Nyberg - Monday, Oct 2, 06 @ 1:48 pm:
Rep. Fritchey, it sounds like your proposal would discriminate against recently purchased properties and for properties that have been owned for a long time.
This isn’t necessarily a bad thing.
- Rep. John Fritchey - Monday, Oct 2, 06 @ 2:08 pm:
One of the trickier aspects is how to implement a complete revision of the process. It’s easier on a going-forward basis but you have to figure out the appropriate baseline for homes already owned and occupied.
- Little Egypt - Monday, Oct 2, 06 @ 2:22 pm:
Truthful, I agree with Animous. Please put this into a figure we can understand. I don’t understand fair market value and multipliers as much as I understand the difference in last year’s tax bill and this year’s. I’m probably not alone in this thinking. Can you come up with a dollar amount which Blogo is underpaying his taxes? PLEASE!
- Bluefish - Monday, Oct 2, 06 @ 2:29 pm:
Rep. Fritchey - doesn’t the acquisition-based assessment impact the ability for people to obtain “affordable housing” by both creating an artificially high tax burden on the newly purchased housing unit and providing an economic incentive for people to not sell their property for fear of losing their lowered assessment?
- Rep. John Fritchey - Monday, Oct 2, 06 @ 2:39 pm:
Not at all, upon a sale, property is assessed (as it should be) based upon the market value of the property. And from a seller’s standpoint, once they sell, the new assessment on their old property is irrelevant to them. There are loopholes that need to be addressed, but I think that the concept is a sound one.
- DOWNSTATE - Monday, Oct 2, 06 @ 2:39 pm:
Since Blago has turned this into the Capitol Building it should be exempt.
- DOWNSTATE - Monday, Oct 2, 06 @ 2:40 pm:
Since Blago has turned this into the Capitol Building it should be exempt.We don’t pay taxes on the old Governor’s mansion in what use to be the capital of Illinois.
- Truthful James - Monday, Oct 2, 06 @ 2:55 pm:
Little egypt –
Dollar savings to the governor?
see the first paragraph of my last post.
- Squideshi - Monday, Oct 2, 06 @ 4:02 pm:
I saw McQueary at a Green Party fundraiser in Chicago about a week and a half ago. She talked with quite a few people and asked a lot of questions. She seems to investigate just fine.
- cermak_rd - Monday, Oct 2, 06 @ 4:31 pm:
Someone keeps bringing up Clinton, Stubbs, and Franks. OK, let’s look at them:
Clinton–Monica was 22 years old–clearly an adult. She has never claimed at any time that this was not a consensual relationship. She was also not a page, but an intern.
Stubbs–Began his relationship with a page in 1973–fully 9 years prior to the investigation that brought that out to the public. He and the young man who had been 17 at the time of the relationship and was now in 1983, 27 came out and admitted to the relationship and both averred that it had been a consensual one.
Franks–the only scandal I could find on him was consorting with a male prostitute (adult) and maybe erasing some parking tickets for the guy.
Stubbs is the only one who comes close to this case, but there are important differences:
1. at 17 the lad in question was beyond the age of consent and
2. the guy still believed that it was a consensual relationship 10 years later.
In the interim, legislation has been passed (promoted, ironically, by Foley) to make sending lurid messages to people under the age of 18 illegal.
Also, one of the kids was creeped out enough by the messages to inform his parents–thus raising questions of consent and harassment.
- cermak_rd - Monday, Oct 2, 06 @ 4:31 pm:
Ooops, wrong topic!
- Anonymous - Monday, Oct 2, 06 @ 7:11 pm:
Are people really stupid enough to believe that only the governor of Illinois deserves a 1 percent increase and everybody else deserves 20, 30, 40 and 50 percent? That little move will save him thousands of dollars.
- Little Egypt - Monday, Oct 2, 06 @ 7:18 pm:
RealClear, let me help you come back into our midst. In my county, the tax assessments are listed in the newspaper. That would be the quarterly (re)assessments and then yearly changes based upon building permits and changes by the Board of Review. I can tell you there are many busy-bodies who make it their sole function to use a magnifying glass and go over the multiple full newspaper pages to see who is assessed at what. Multiply that by 3 and you can figure out at what value houses are priced. It doesn’t take long to find out if one of your neighbors has done extensive remodeling, put in a pool, etc. and their tax assessment has not gone up one dime. And that’s when a neighbor with a similar house without the improvements marches down to the Board of Review and challenges their own assessment and rats out their neighbor. No one is going to complain if they are underpaying their taxes. But there are a lot of people who will know that and will report it. And I don’t blame tax snitches. Because as unfair as real estate taxes are, we all should pay our fair share of them and then try to get guys like Rep. Fritchey to change the system.
- Verbal Kint - Monday, Oct 2, 06 @ 9:59 pm:
Would Milarod’s sudden good fortune with the Assessor have anything to do with the recent change of Executive Directors at PTAB, which has been a pain in the ass for Jim “Keyser Soze” Houlihan for some time now?
- In the Sticks - Monday, Oct 2, 06 @ 11:23 pm:
Maybe the ISP car parked in front of the house 24 hours a day for the last almost 4 years has had a significant negative impact on the value of the house.
- RealClear - Tuesday, Oct 3, 06 @ 1:29 am:
I don’t know why my earlier post was deleted, but I’ll say it again. There is NO issue here unless someone has evidence that Blago used his office in an inappropriate way to lower his property taxes. There’s no evidence that Blago did anything other than get his property tax bill (which totalled a lot) and paid it.
I understand that some people hate Blago and want him to lose. But shouldn’t we stick to issues where there is at least a shred of evidence? Why don’t we just go back to a couple of years ago when these same blogs were recklessly predicting the coming forward of the love child.
Relax, it will all be over in less than 40 days. The state workers who hate Blago so much might want to consider looking elsewhere for a new job and a new boss, if they are so unhappy.