* Second in the Tribune’s series…
Working with the Center for Municipal Finance at the University of Chicago’s Harris School of Public Policy, the Tribune examined appeals on more than 2.7 million residential parcels and found that, in every year from 2009 to 2015, the industry’s statistical measures of fairness got worse after the appeals process.
That inequity has placed a financial burden on those who can least afford to pay more, the U. of C. study found. On average, even after appeals, people who own homes in the bottom 25 percent of values paid nearly $500 more a year in property taxes than they would have if the system were fair, the research shows.
The reason: Wealthier neighborhoods appealed at much higher rates and regularly received significant assessment reductions even though homes in those areas were more likely to be undervalued. In poorer neighborhoods, homeowners not only are more likely to have their properties overvalued by the assessor, they are less likely to appeal. […]
As previously reported in this series, a Tribune analysis found that the county’s assessments have been riddled with errors. Berrios had a chance to improve the property tax system by implementing a new computer model that would produce more accurate assessments and reduce regressivity, or the tendency to overvalue low-priced homes and undervalue high-priced ones.
But he failed to do so — despite issuing a news release claiming he did.
…Adding… The full study is here.
*** UPDATE *** Press release…
The Cook County Assessor’s Office is again concerned about false statements, misleading claims and inaccurate information recently put forth about property assessment and taxes. Assessor Joseph Berrios has issued this statement:
“Having grown up in Cabrini Green and becoming the first minority ever to serve as Assessor, I would never allow this office to unfairly assess property and cause minorities to pay more taxes than they should.
It is important to respect all homeowners, especially those with homes at the lower end of the market. I have felt this way since I was the first Hispanic-American elected to County-wide office on the Board of Review and, before that, the first Hispanic-American to serve in the Illinois General Assembly.
The property assessment system is not ‘rigged,’ as a few have recently claimed. The appeal process is open and fair to all, contrary to the opinion of the Tribune. No one is required to use an attorney to appeal; in fact, the majority of appeals filed do not use attorneys. Still, the success rate for all appeals to my office is 50%.
We have done everything to encourage all people in Cook County to appeal their assessments. 77% of the community assessment and appeal seminars done by my office are in areas with lower-market homes.
The Tribune’s sales ratio study was not conducted by certified or otherwise experienced appraisal professionals.
In violation of industry standards, the Tribune included in its study countless non-fair-cash-value transactions such as estate sales, which drive down prices. But the Tribune didn’t even note their inclusion.
Court rulings state that sales ratio studies are not technical or scientific facts, but merely studies whose methodology and results are subject to interpretation.
The Tribune’s advocacy of the new Probit assessment model is in complete disagreement with internationally-recognized property assessment experts. Probit has proven highly unreliable.
This Office assesses property, not people. It does so accurately and practices equality.”
- Rocky Rosi - Thursday, Jun 8, 17 @ 10:45 am:
The system will never change. The system enriches the politicians/lawyers/lobbyists. Sad the the wealthy take from the poor.
- Ron Burgundy - Thursday, Jun 8, 17 @ 10:47 am:
As a casual observer, it’s hard to find any evidence that Assessor Berrios gives a rip about anything other than preserving his power and employing his family. Customer service and treating average taxpayers fairly doesn’t seem to even register.
- Retired Educator - Thursday, Jun 8, 17 @ 10:54 am:
The Cook County Assessor employs numerous individuals to be field inspectors to visit and evaluate properties, but they seldom do so. The Assessor’s office seems to rely upon recent sales figures and building permit applications rather than sending people outside to visit actual locations.
- Juvenal - Thursday, Jun 8, 17 @ 11:56 am:
It’s a good response from Berrios.
It appears this is all part of the Rauner-IPI-Tribune effort to take a wrecking ball to the Democratic Party and the middle class.
Look for Rauner and IPI to retweet the biased reporting. RIPIT Inc. Has established a fine echo chamber.
- anon2 - Thursday, Jun 8, 17 @ 12:00 pm:
The facts are that the property tax is regressive, and Illinois relies upon it to fund education moreso than any other state. Oh, and education funding is also more regressive in the Land of Lincoln than in almost all states.
- Cassandra - Thursday, Jun 8, 17 @ 12:35 pm:
Clearly, if 50 percent of appeals to his office are successful, that indicates a systemic problem right there. Berrios, for whatever reason, doesn’t seem to be planning to make any substantive changes.
We live in the world we live in, and Cook County residents choose to live in Cook. So it’s appeals which are the individual homeowner’s principal line of defense against a predatory tax system.
- NW sider - Thursday, Jun 8, 17 @ 12:39 pm:
The interesting thing about these studies is that they actually make against Rauner’s tax freeze proposal- it seems evident that the wealthy are paying too little, and therefore they shouldn’t see a freeze at all.
Frankly, if you have an error rate of 50% (of those asking to have their assessments checked, which is admittedly a self-selected pool), there’s something wrong with your assessment methodology. The fact that to get to a “fair” tax rate you basically must appeal- that’s a built in assumption of an error- something’s wrong here. The burden shouldn’t be on homeowners to come up with a solution.
- Benniefly2 - Thursday, Jun 8, 17 @ 12:46 pm:
The property tax investigative report is a fantastic piece of journalism. Jason Grotto did a great job researching the piece. I recommend everyone read it. I have yet to hear a compelling argument that the conclusion of the article is anything other than accurate.
Whereas it is true that anyone can appeal, most don’t understand the process. Even when some of the lower income folks do appeal, as noted in the story, the assessed value of their actual purchase price $75k house only goes from like $130k to like $113k. It will save them a couple of hundred bucks, but it still isn’t a true assessment of the value of the property. Besides, as noted in the story, multi-million dollar homes are being chronically under valued and then the homeowners have the already undervalued assessment appealed and lowered by hundreds of thousands of dollars more. As noted in the stories, other large metropolitan areas like New York and San Francisco and such don’t seem to have these kind of issues.
- Perrid - Thursday, Jun 8, 17 @ 12:55 pm:
Berrios response smells like bull to me. His office has not implemented a new model that is more accurate, so to be assessed accurately people have to take action. Yes most appeals that get filed are granted, but putting the onus on the people to be taxed anywhere near appropriately is incredibly irresponsible, and is clearly taking advantage of ignorance or apathy on the part of his victims. As far as his claims trying desperately to discredit the Tribune’s methods, the Tribune included in their articles that Berrios’ office had objected, and said that their research did meet standards. I don’t know who is right there, dueling experts and all that, but I know who has a vested interest in discrediting the audit. Sure his response sounds good if you don’t look too deep, but once you do it’s clearly lead with gold paint.
- Ron Burgundy - Thursday, Jun 8, 17 @ 1:02 pm:
–Clearly, if 50 percent of appeals to his office are successful, that indicates a systemic problem right there.–
Right. You’d think if the primary function of your office had a 50% rate of overcharging people, maybe, just maybe, you’d find a way to fix that up front so people didn’t have to fix it themselves through appeals one at a time.
- Responsa - Thursday, Jun 8, 17 @ 1:22 pm:
Berrios does not have a ready reservoir of respect and good will to withstand this series of deeply researched and fact-documented articles.
- Illinois O'Malley - Thursday, Jun 8, 17 @ 1:23 pm:
@Ron, your analysis is flawed. We need to know what % of homeowners appealed before looking at appeal results.
- City Zen - Thursday, Jun 8, 17 @ 1:24 pm:
Sincerely,
Joe Berrios
First Lieutenant, First Property Tax Infantry Division, First Berrios Family Brigade Team
- Responsa - Thursday, Jun 8, 17 @ 1:38 pm:
I have a Cook County home owning friend who is a regular and successful “appealer”. In dealing with a series of these assessor’s office people over the years the thing that aggravates my friend most about the whole thing is that he truly believes the whole appeals process is a make work situation to boost employment in the assessor’s office. These articles give some credence to that theory.
- Chicagonk - Thursday, Jun 8, 17 @ 4:50 pm:
@Responsa - It’s definitely make work for Berrios and his family and friends. Not to mention the law firms that make easy money copy pasting property appeals for a “small success fee.” The only minorities Berrios cares about are his friends and family.
- Anon Downstate - Thursday, Jun 8, 17 @ 5:04 pm:
“The Tribune’s sales ratio study was not conducted by certified or otherwise experienced appraisal professionals.
In violation of industry standards, the Tribune included in its study countless non-fair-cash-value transactions such as estate sales, which drive down prices. But the Tribune didn’t even note their inclusion.
Court rulings state that sales ratio studies are not technical or scientific facts, but merely studies whose methodology and results are subject to interpretation.”
———————
Joe, you know (or SHOULD know)that The IL DOR, Property Tax Division (or whatever it is called these days) uses sales-ratio studies to calculate the levels of assessment for all assessment jurisdictions across the State of Illinois.
Those studies use a 3 year weighted average to determine assessment levels for non-farm properties.
OTOH, looks pretty clear to me why you really aren’t interested in addressing many of the issues.
For example, IF you decided to turn loose your high powered digital appraisal system to reset assessed values for most of the lower/middle class housing in Chicago based upon the most current IL DOR sales ratio studies, you would see the effects of all those foreclosure/bank sales that IL DOR now includes in their sales-ratio studies.
You would lose a whole lot of valuation, but even more importantly, you would have a whole lot of properties with mortgages/HEL’s which would magically see value melting away. Can you say “potential underwater mortgages”?
Just think of some of the effects that come with that.
Might want to think HARD about that……
- Robert Wiliams - Thursday, Jun 8, 17 @ 9:31 pm:
Wow! This sounds terrible. HOW did Bruce Rauner’s State Department of Revenue, which has total authority over ALL assessments statewide, FAIL to notice and catch this? Was this failure of State oversight due to Rauner’s “All-Star” hires from the corporate world? And WHY did Bruce Rauner’s State Department of Revenue watchdogs APPROVE Cook County’s assessments for TWO YEARS running???
- Anon Downstate - Thursday, Jun 8, 17 @ 10:19 pm:
“HOW did Bruce Rauner’s State Department of Revenue, which has total authority over ALL assessments statewide, FAIL to notice and catch this?”
————–
Not factual. IL DOR only has the responsibility to require submission of the PTAX series of assessment /equalization reports. That occurs from all assessment jurisdictions state wide.
Once received, IL DOR generates updated assessment level reporting (by assessment district/political township and property class). It’s pretty much all statistics.
Eventually (after BOR is finished), completed BOR assessed valuation abstracts, Re-Class reports, and BOR Equalization reports are submitted by Cook County (and all the other IL Counties) to IL DOR for adjustment of the previous (County Assessor/Supervisor of Assessments)levels of assessment.
Once those changes are completed, a final Countywide equalization factor is generated by IL DOR and certified to the County Clerk. That multiplier (Equalization Factor) will be applied to all the non-farm assessments.
IL DOR does not have ‘approval’ rights for a County’s assessments, or how they are generated.
IF you really know your stuff, you will remember that back in Dick Ogilvie’s time, IL DOR did it’s first (and last, as it turned out) actual in-depth audit of how real estate taxes were processed by the Cook County RE Tax System. IIRC, that was back in the day of ‘PJ ‘Parky’ Cullerton.
Very unpleasant.