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*** UPDATED x1 - Mendoza backs off plan *** Mendoza floats “tiered” property tax system

Tuesday, Jan 8, 2019

* From Chicago mayoral candidate and Illinois Comptroller Susana Mendoza’s “Future Now” plan

Susana will work with Assessor Fritz Kaegi to make our property tax system more progressive by advocating in Springfield for a tiered approach to property tax assessments, similar to what is in place in a number of other states. Under this approach, properties with lower assessments are taxed at a lower rate than more expensive properties. As mayor, Susana will support making the necessary changes in state law to allow Assessor Kaegi to make these changes in Cook County.

* Greg Hinz followed up

In an interview, Mendoza said she envisions “maybe three or four tiers,” with the assessment rate rising with the value of the property. Mendoza, now the Illinois comptroller, said she doesn’t yet know what those rates should be, but confirmed that she’s “especially focused on residential rates” because of recent reporting that the current system resulted in homes in poor, minority neighborhoods tending to be valued at relatively higher figures than in many wealthier sections of the city.

Kaegi, who just took office, has vowed to change that practice over time, effectively shifting more of the property tax burden to higher-priced areas. But Mendoza’s change would be on top of that—meaning residents of areas with higher-than-average home prices (be it Lakeview, Lincoln Park, Jefferson Park, the South Loop or Beverly) would pay the higher property tax pushed through by outgoing Mayor Rahm Emanuel as well as the higher assessments Kaegi wants and Mendoza’s new tiers.

Asked if that’s fair to residents of those neighborhoods, Mendoza said, “I don’t look at it that way.” The way she looks at it, she says, is that some areas of the city were devastated by a property tax system “rigged” to favor the more well-off, so now the latter may have to pay “a little bit more” to make amends. “This would create more fairness in the system.”

Mendoza said she’s also open to another idea that’s been circulating, to impose an extra real estate tax on the sale of properties worth more than $1 million. But the idea would have to be enacted by referendum, and advocates for the homeless and other groups have been debating who would get the proceeds.

Thoughts?

*** UPDATE *** Mendoza now as an op-ed up on the Crain’s website backing away from her idea

One of the most important aspects of effective, elective leadership is to listen. I recognize my fellow Chicagoans want us to focus on creating a fair and transparent assessment system. Altering or tiering rates, as my plan suggested, may not be the best way to get there. I’m not afraid to propose bold ideas. And at times I might miss the mark, as I did on this proposal. But when I do miss the mark, I won’t be afraid to consider alternative points of view and amend those ideas.

To be clear: Chicago already has a rigged two-tiered system that leaves the wealthy and well-connected paying less, while working class families pick up the tab. This was a serious proposal on a complex issue to help fix our deeply broken property tax system. Right now, many high value properties are assessed at rates that are lower than they should be, while low value properties are assessed at rates that are far too high, creating a regressive tax on our neighborhoods.

I support the work Assessor Fritz Kaegi is doing to collect better data and build an assessment model that works for all families in every corner of Chicago. The best plan for this moment would be to build on his work, create a system that is fully transparent and fair without altering rates, and continue finding further ways the city of Chicago can work with the Assessor’s Office to fix our broken property tax system.

- Posted by Rich Miller        

60 Comments »
  1. - Anon - Tuesday, Jan 8, 19 @ 11:03 am:

    Rich - not sure where to post this, but the “yesterday’s posts” link is broken (sorry for falling behind)


  2. - wordslinger - Tuesday, Jan 8, 19 @ 11:05 am:

    –In an interview, Mendoza said she envisions “maybe three or four tiers,” with the assessment rate rising with the value of the property.–

    Sounds like a property tax appeal lawyer’s dream.

    And a disincentive to keep up or improve your property.


  3. - Not It - Tuesday, Jan 8, 19 @ 11:05 am:

    How does this impact condominium buildings? Individually a unit can be worth very little, but the assessment is calculated for the building as a whole.

    Also, a lot of small businesses are taxed as commercial and that is making life very hard for those businesses just getting by. The owners of my neighborhood gym say the property taxes (which they pay due to their lease) are more than their monthly rent.


  4. - Groucho - Tuesday, Jan 8, 19 @ 11:06 am:

    —-Asked if that’s fair to residents of those neighborhoods, Mendoza said, “I don’t look at it that way.”—- I think the voters in those neighborhoods will look at it that way.


  5. - Anonymous - Tuesday, Jan 8, 19 @ 11:08 am:

    A tax on millionaires (properties valued at)? Didn’t we already try that concept and it was approved and ???? Guess knowing what the citizens want wasn’t “looked at that way” by millionaires.


  6. - Anon - Tuesday, Jan 8, 19 @ 11:09 am:

    I’d imagine it will be tiered in a way that gradually increases, as in the first $100k is taxed at the $100k bracket level, value between $100k-$200k is taxed at that level, etc. That way there isn’t a larger incentive to try and keep your property from hitting a threshold.


  7. - Anonymous - Tuesday, Jan 8, 19 @ 11:10 am:

    Way too ambitious. The State is about to come down hard for increased revenue. If the City doubles down on revenue, its going to absolutely squeeze folks.

    Further, the slash to mortgage reductions are hitting Chicago homeowners.

    Something has to give there.

    It does sound like a real estate tax lawyers dream.

    I love Mendoza but this is just ill-advised. A progressive income tax os coming to IL and it by necessity will raise more revenue than the current system. It will be a tax hike, regardless of whether it is “fairer” .. Chicago isnt located in a vacuum.


  8. - Six Degrees of Separation - Tuesday, Jan 8, 19 @ 11:12 am:

    A multi-tiered property tax rate might also be a stimulus to redevelopment in the south and west sides, which could conceivably be rebuilt and taxed more cheaply…but I wonder if it would lead to more gentrification, as middle-income residential areas keep pushing the poor outward to the bordering Cook suburbs.


  9. - The 5th - Tuesday, Jan 8, 19 @ 11:18 am:

    This is a good policy idea.

    Many high net worth individuals are choosing to move to Illinois/Chicago because of its high functioning government and tax environment.

    Recent statistics bear this out.

    Chicagoans are very elastic with taxes and are willing to pay substantially more given the very good outcomes they are getting from their schools, police services and infrastructure.


  10. - Perrid - Tuesday, Jan 8, 19 @ 11:21 am:

    I’d have to see the tiers and have some understanding of how it will work before taking a strong stand, but my initial thoughts are a flat percentage should be good enough for property taxes. It’s not like income, which is liquid and so the tax is based directly on ability to pay.

    The cynic in me also agrees with wordslinger, this would add an even bigger incentive to fight assessments, and probably make the whole deal even more complex, which can only help the lawyers.


  11. - notsosure - Tuesday, Jan 8, 19 @ 11:22 am:

    It’ll require a constitutional amendment, won’t it?


  12. - Sue - Tuesday, Jan 8, 19 @ 11:22 am:

    I have two responses to Mendoza’s proposals. (1)Illinois/Chicago is already not only the second highest taxed jurisdiction in the US in terms of refl estate and one of the weakest markets in terms of price appreciation; and (2)Mendoza’s friends and supporters are responsible for the absolute corruption in the tax/appeal scam which created this mess. The existing attempt to correct valuations should be given the chance to prove itself before any “soak the rich” attempts suggested by the little Princess


  13. - Whatever - Tuesday, Jan 8, 19 @ 11:23 am:

    Article IX, Section 4(a) of the Constitution says that “Except as otherwise provided in this Section, taxes upon real property shall be levied uniformly by valuation ascertained as the General Assembly shall provide by law.”

    Subsection (b) says the GA may let counties with populations over 200,000 to classify property, with the rates uniform within each classification, but that leaves out a lot of counties.


  14. - Whatever - Tuesday, Jan 8, 19 @ 11:23 am:

    Notsosure beat me by a nose.


  15. - ChicagoVinny - Tuesday, Jan 8, 19 @ 11:25 am:

    I’d prefer a graduated city income tax.


  16. - wordslinger - Tuesday, Jan 8, 19 @ 11:26 am:

    To the Update:

    Well, moving on then…..


  17. - Anonymous - Tuesday, Jan 8, 19 @ 11:26 am:

    With her house worth over $400,000 and a property tax of $4,700, I need her tax lawyer.


  18. - Independent - Tuesday, Jan 8, 19 @ 11:27 am:

    Though Mendoza quickly walked this one back Preckwinkle, Daley, and Chico are no doubt grinning. Interviews on the campaign trail are bad places to brainstorm. Do that behind closed doors.


  19. - Oswego Willy - Tuesday, Jan 8, 19 @ 11:28 am:

    Half-baked ideas rarely rise anyone’s chances.

    So many moving parts floated, too many loose ends damaging.

    Not a great thing… it did try to change the conversation, so there’s that.


  20. - IrishPirate - Tuesday, Jan 8, 19 @ 11:29 am:

    Next up Mendoza will propose a soda tax.

    I’m not quite sure who the top tier candidates are in Chicago’s “Marepalooza”, but those not named Mendoza, Chico, or Preckwinkle have to be having a good week.


  21. - Merica - Tuesday, Jan 8, 19 @ 11:32 am:

    Dear Comptroller Mendoza, thank you for backing off that plan. A system that accurately determines fair market value, applies the correct tax rate and exemptions, and considers legitimate appeal claims is what we currently lack and need. Just having an accurate system will bring in billions in additional revenue.

    If we need more money, the State should look at a statewide tax on crop land. 80% of this State is crop land, and it’s taxed at the lowest rate in the Midwest.


  22. - AnneBancrupt - Tuesday, Jan 8, 19 @ 11:37 am:

    I’m with anonymous. She purchased her home for 471k and is paying about 4700. Who else is paying 1%?

    She’s starting to sound like one of those Presidential candidates way back when: I was before the war before I was against it.


  23. - Sox Fan - Tuesday, Jan 8, 19 @ 11:37 am:

    ===If we need more money, the State should look at a statewide tax on crop land. 80% of this State is crop land, and it’s taxed at the lowest rate in the Midwest.===

    I dont think that will be an effective campaign position for someone running for Mayor of Chicago


  24. - Belden Ave. - Tuesday, Jan 8, 19 @ 11:40 am:

    “I love Ed Burke”
    “Who’s Ed Burke?”
    “I want to raise taxes”
    “What, me raise taxes?”

    Flip…Flop….Flip…Flop

    Susana you are getting sloppy


  25. - OneMan - Tuesday, Jan 8, 19 @ 11:48 am:

    With her house worth over $400,000 and a property tax of $4,700, I need her tax lawyer.

    If that is correct I would suggest Chicago get it’s tax rates in line with what I pay in Aurora and all their budgetary problems would be solved.


  26. - west wing - Tuesday, Jan 8, 19 @ 11:50 am:

    One thing is clear, Chris Kennedy was right about the property tax racket. All the candidates are jumping on the Kennedy bandwagon, decrying the rigged property tax system.


  27. - Sue - Tuesday, Jan 8, 19 @ 11:51 am:

    It would be amusing to investigate whether Mendoza has ever appealed her tax assessment AND who she used to do it.


  28. - Regular democrat - Tuesday, Jan 8, 19 @ 11:57 am:

    Wow that was quick. I like her enthusiasm but this is not a way to run a campaign. It does get reporters off her back for a day ot two about burke.


  29. - Anon - Tuesday, Jan 8, 19 @ 12:02 pm:

    Wait until people in those neighborhoods see the impact the SALT repeal has on their taxes this year.

    All the same people that the cities and states want to soak are going to already have been hit with a big tax hike based on SALT being capped at $10,000.

    That doesn’t help the state, but to pretend it isn’t happening is delusional.

    There just isn’t going to be the appetite for all of these different layers of progressive taxation at the city/state level on top of the big hit folks with high taxes took with the new cap on State/local deductions at the federal level.


  30. - qualified someone nobody sent - Tuesday, Jan 8, 19 @ 12:03 pm:

    SUE: “Amusing to see…” CookCountyAsssessor.com has that public record on their site. Address or “PIN” number is all you need!


  31. - Steve - Tuesday, Jan 8, 19 @ 12:03 pm:

    The more complicated the property tax system becomes , the more unfair it will become. Anyway, it sounds like some politicians have plans for higher taxes on real estate.


  32. - Anonymous - Tuesday, Jan 8, 19 @ 12:07 pm:

    Glad to see Mendoza back down on this horrendous idea.


  33. - Anonymous - Tuesday, Jan 8, 19 @ 12:08 pm:

    OUr State Comptroller doesn’t know a lot about property taxes.

    County government assesses property, not city government.


  34. - Amalia - Tuesday, Jan 8, 19 @ 12:09 pm:

    sure, talk about homeowners because talking about the real tax scam….loop office towers/connected pols who do tax law work….would be too problematic.


  35. - cdog - Tuesday, Jan 8, 19 @ 12:11 pm:

    I find it ironic that “the middle class” is sanctified by Democrats when it comes to state employees’ wages, and their benefits and pensions, but when “the other middle class” of property owners that worked hard and invested in their home, neighborhood, and school systems are successful at this Game of Life exercise, they are targeted to support the former.

    (This situation gives Illinois national ranking in high property taxes, outbound residents. I suspect flat real estate prices above the median.)

    It would be nice to hear something about the expense side of the property tax problem, not just the revenue side.

    Dems and Repubs, at all levels of government which lean on property tax levies, need to tighten their belts and make some value choices about where all this money goes.


  36. - Anonymous - Tuesday, Jan 8, 19 @ 12:23 pm:

    cdog, agreed, but we may be waiting a long text for that unfortunately. This state loves taxing and spending. The sad thing is that we really don’t get very much for the high level of taxation.


  37. - Sonny - Tuesday, Jan 8, 19 @ 12:26 pm:

    Sue, did someone do something to your cereal this am? This isn’t even accurate —Berrios and the property tax appeal industry have been and are with Toni.


  38. - OneMan - Tuesday, Jan 8, 19 @ 12:31 pm:

    Sonny…
    Toni barely knows Berrios….


  39. - Anonymous - Tuesday, Jan 8, 19 @ 12:32 pm:

    Meanwhile, UHaul and Moving Companies will see landmark business


  40. - #1 anon - Tuesday, Jan 8, 19 @ 12:33 pm:

    The proposal should be considered - but only if they can determine how to protect long-time homeowners (perhaps retirees) who have seen their house valuation increase significantly. This would further squeeze that group.


  41. - Sue - Tuesday, Jan 8, 19 @ 12:39 pm:

    Sonny- my reference is to Ed Burke- mendoza’s Mentor


  42. - You could say that, I couldn't - Tuesday, Jan 8, 19 @ 1:14 pm:

    Count me with notsosure, whatever, and others. A multi-tiered property tax system based on value (rather than use) violates the constitution.


  43. - "Old Timer Dem" - Tuesday, Jan 8, 19 @ 1:19 pm:

    Mendoza is going to have a problem when her mayoral opponents start running commercials showing her standing on a podium many years ago lauding Ed Burke as her mentor.


  44. - Sue - Tuesday, Jan 8, 19 @ 1:25 pm:

    Burke’s indictment should reinvigorate Vallas’ campaign. How great would it be to have someone who knows finance become mayor. But for the deal Blago cut with Tombstone- Vallas would have been elected Governor in 02 allowing Illinois to avoid all the catastrophes we endured since then


  45. - wordslinger - Tuesday, Jan 8, 19 @ 1:25 pm:

    –Mendoza is going to have a problem when her mayoral opponents start running commercials showing her standing on a podium many years ago lauding Ed Burke as her mentor.–

    Who’s going to do that? Preckwinkle, Daley, Chico? Who are the candidates with money for TV spots that don’t have Burke ties?


  46. - Public Records Reader - Tuesday, Jan 8, 19 @ 1:43 pm:

    @Anonymous and @AnneBancrupt, check the Cook County Treasurer’s website: Looks like her property taxes are jumping from $6,457 last year to more than $7,000 this year.


  47. - Hieronymus - Tuesday, Jan 8, 19 @ 1:45 pm:

    Not a bad idea, if coupled with some sort of reasonable income tax swap to move most of the school funding to the state. Restrict any progressitivity to higher-value, individual residential dwelling units, be they single-family, condos, or whatever. That would then at least capture some revenue from those higher income persons who spend a lot of time in Illinois, but manage to keep their tax home somewhere else.


  48. - Anonymous - Tuesday, Jan 8, 19 @ 2:03 pm:

    Public record reader, the search for 13-17-414-005-0000 which is owned by Susana shows a value of $4716.94.


  49. - M - Tuesday, Jan 8, 19 @ 2:33 pm:

    A 4 or 5 tier system for taxes should be better than what we have now.


  50. - Boone's is Back - Tuesday, Jan 8, 19 @ 3:07 pm:

    It’s an up day for the Mendoza campaign


  51. - Silicon Prairie - Tuesday, Jan 8, 19 @ 3:13 pm:

    The mayor candidates are supposed to come up with ideas about how to lower our property taxes and she comes up with a plan to raise them even higher


  52. - Rich Miller - Tuesday, Jan 8, 19 @ 3:14 pm:

    ===mayor candidates are supposed to come up with ideas about how to lower our property taxes===

    You really need to stop believing in magic dust (or at least stop snorting it).


  53. - FP_J - Tuesday, Jan 8, 19 @ 3:21 pm:

    @Public Records Reader and @ Anonymous: The property in question was assessed at $252,870 in 2017 with a tax burden of $4,716.94. The 2018 reassessment is for $443,910 (and no appeal is on record). If the local tax rate (7.266%) doesn’t change in 2018, the taxes will be $8,829.44.

    The 76% increase in assessed value is high, but all of Jefferson township seems to be getting hit with large increases. My own went up 31%.


  54. - FP_J - Tuesday, Jan 8, 19 @ 3:40 pm:

    I should add: A lot of the people I’ve spoken to in Jefferson Township have had large increases. However, I check the records of some of the more modest homes in my neighborhood and they stayed the same or went down in assessed value.

    So it seems like Jefferson at least is already getting some (big!) corrections to the inequitable residential assessment problem.


  55. - Annoyance - Tuesday, Jan 8, 19 @ 4:18 pm:

    Public record reader, the search for 13-17-414-005-0000 which is owned by Susana shows a value of $4716.94.

    It’s an insult to everyone living in lake view and less than 8,000 for a $560t plus home?

    There should be a disclosure of all candidates running for everything but especially mayor to see what they are paying.

    Smaller home, purchased for less at the same time period as Mendoza and somehow my home has a much higher tax bill for years (9,000) but her bill was going down. Mine projected increase to over 13,000. That’s the problem the assessments are a sham. Loss my vote, now let’s see what the others are paying.


  56. - Anonymous - Tuesday, Jan 8, 19 @ 5:15 pm:

    Glad she backed off - I was not looking forward to ripping out my toilets


  57. - Albany Park Patriot - Tuesday, Jan 8, 19 @ 5:42 pm:

    The “frontrunners” in this race leave a lot to be desired.


  58. - anon2 - Tuesday, Jan 8, 19 @ 7:08 pm:

    Thousands of suburban homeowners with houses about equal in value to Mendoza’s haven’t paid $4,700 in many years. Try double or triple her bill. That’s not her fault, but it reveals how little Chicago home owners pay compared to their suburban counterparts in homes of the same value.

    I’m curious how well or poorly the multi-tier system works in other states.


  59. - Annoyance - Tuesday, Jan 8, 19 @ 7:32 pm:

    Thousands of suburban homeowners with houses about equal in value to Mendoza’s haven’t paid $4,700 in many years.

    So have thousands of Chicago homeowners. Haven’t paid that in at least 10 years. And I have no backyard. The problem seems to be that a section of the city is being strangled
    While others are not paying the right amount.


  60. - Silicon Prairie - Tuesday, Jan 8, 19 @ 9:29 pm:

    Hey Rich - as long as your bringing snorting and drugs into the discussion you should lay of the drug references in your own colume


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