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* As you already know, the House voted yesterday to override the governor’s amendatory veto of the Cook County assessment cap…
The Senate’s next move is still in question. President Emil Jones (D-Chicago) has pushed to the Senate floor a separate bill that reflects the governor’s higher level of relief.
Sen. Terry Link (D-Waukegan), Jones’ point man on the issue, predicted the Senate will have no trouble passing whatever version of the 7 percent legislation it chooses and predicted a tax-relief package soon would be approved. But the Senate must decide whether to go along with the House, pass the separate legislation now pending on the Senate floor or find a compromise with the House and pass that, Link said.
“I feel very optimistic,” Link said.
* I wouldn’t be too sure of that. House Majority Leader Barbara Flynn Currie made this plea on the House floor yesterday…
“We believe there isn’t support in the chamber across the rotunda to accept the governor’s changes. If I’m wrong, they’ll send us something, and it will be a whole new game. But if I’m right, this is the 11th hour and the only game in town,” Currie said.
* Hendon may have tipped the Senate’s hand…
Yet Sen. Rickey Hendon (D-Chicago), another member of Jones’ leadership team… said the Senate may end up going along with the House action “just to give the people something.”
“If this goes down in flames, there’ll be hell to pay,” Hendon said.
Yep.
* Still, Link emphasized that something would get done by next week…
On Wednesday, state Sen. Terry Link, a Waukegan Democrat leading talks on the issue, said suburban homeowners would not fall victim to Capitol gridlock.
“There will be something done next week,” Link said, “because there has to be some kind of tax relief.”
* The governor’s full statement…
“I’m disappointed that today the Illinois House chose to take property tax relief away from homeowners in Cook County. The House had an opportunity to extend the 7% property tax cap that we passed three years ago. Instead, they voted to take it away and continue a system that places too much of the property tax burden on homeowners while it protects commercial property owners and real estate developers.”
Harsh.
* Part of a press release from the Chicagoland Chamber of Commerce and Building Owners and Managers Association of Chicago…
A permanent cap would be damaging to many school districts. A district that loses tax base from the assessment cap may not be able to maintain its tax
levy.HB 664, passed by both chambers, would implement a three-year phase-out of the program with special income-based provisions for long-time homeowners in gentrifying areas.
Thoughts?
posted by Rich Miller
Thursday, Oct 4, 07 @ 10:01 am
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The Senate’s next move is still in question. President Emil Jones (D-Chicago) has pushed to the Senate floor a separate bill that reflects the governor’s higher level of relief.
Do you have a bill number for this higher level of relief?
Comment by silentk Thursday, Oct 4, 07 @ 10:10 am
As one of those property tax victims in the Cook suburbs ($16 k this year, and that’s after we appealed and won last year) I find myself (sigh)
once again applauding Blago. Appealing your property taxes every year is boring (but necessary) out here in lovely Oak Park.
What is Madigan thinking….does Lisa want to run for office as the daughter of Mr. Property Tax Increase.
Comment by Cassandra Thursday, Oct 4, 07 @ 10:14 am
Yes. My thought is that House Bill 750 would be a far better solution to this problem than the lame band-aid that these legislators are proposing.
Comment by Squideshi Thursday, Oct 4, 07 @ 10:26 am
I don’t see the Chicagoland Chamber complaining about the restriction of the tax base by TIF districts–of course, the difference is that its members benefit hugely from them, both in Chicago and suburban municipalities.
Consistency is for suckers, I guess.
Comment by nitpicker Thursday, Oct 4, 07 @ 10:31 am
Mightn’t the downturn in housing prices make this point somewhat moot? I hate to say it, because I benefit from it, but I support getting rid of the 7% cap. Mainly because it only benefits single home owners which means the other property owners have to make up the difference. Perhaps if the assessments were done in a transparent manner, such that people with ins with the pols or time on their hands to be able to contest their assessments were treated in the exact same manner as other property owners, the 7% cap wouldn’t be needed anyway.
Comment by cermak_rd Thursday, Oct 4, 07 @ 10:32 am
cermak, I like where your head’s at. Madigan’s version of 7% is bad enough, but Rod’s is even worse. For a guy that embraces populism, he’s sure sticking it to the little guy with his version. That higher exemption limit gives the Northside homes that have been blessed with skyrocketing values a huge break at the expense of businesses, rentors, and homeowner’s that aren’t experiencing higher home values (south suburbs).
Kudos to the Tribune Editorial board for a well thought-out examination of 7%, and shame on the Sun-Times for just examining what it would do to their own bills.
Comment by Gene Parmesan Thursday, Oct 4, 07 @ 10:45 am
Cassandra
What Madigan is thinking is there should be some fairness when it comes to taxation.If your current tax bill is $16000 with Blagos proposal you will save $2000 or $3000. The person whose tax bill is $1600 will save $200 or $300. What are you thinking ? Where is the fairness ? Who is more capable of paying higher taxes,?
Comment by MOON Thursday, Oct 4, 07 @ 10:46 am
The percentage of property tax revenue paid by business has been steadily decreasing for years as the percentage paid by single family homeowners has increased greatly as their property values, as computed by the county, have skyrocketted. That is the real truth. For the Chamber and other business mouthpieces to infer otherwise is simply dishonest which has never stopped them before. We need to make sure that rich businesses pay their fair share. If they don’t like the cap, just raise their rate.
Comment by Bill Thursday, Oct 4, 07 @ 10:58 am
Nothing against Sen. Link, but shouldn’t Emil make a Cook County senator his pointperson on this issue?
Comment by Anon Thursday, Oct 4, 07 @ 11:08 am
There you go Bill, hit ‘em with the populist message, that always works. Just make sure not to mention how much Rod’s bill favors wealthy homeowners over less wealthy homeowners. That might make your populist message look disingenous. I’d use the phrase “corporate fat cats” as much as possible too.
Comment by Gene Parmesan Thursday, Oct 4, 07 @ 11:12 am
The numbers that are being tossed around about the amount of relief is not correct. People assume that this is a huge amount and will significantly reduce rich people’s property taxes.
The maximum amount of the relief for anyone is only $1883.00. Take the $40,000 minus the existing $5,000 homeowners exemption x the current tax rate and you get $1,883. So the folks that live in the million dollar homes that have a tax bill of $25,000…the $1883 is no big reduction…but the guy that has a ranch house where the taxes may have gone from $1300 to $3,000 this will mean a lot! Put it in perspective please.
Comment by cook county resident Thursday, Oct 4, 07 @ 11:34 am
Just an FYI for some of your readers regarding the 7% EHE - especially those who seem to be confused about who “benefits” the most.
Our office has done a thorough analysis on which areas of the City benefit the most, and as a percentage of their tax bills - homeowners on Chicago’s South and West sides get BIGGER percentage savings then homeowners in the more affluent areas.
That’s to say, while a homeowner in Lincoln Park may get $2,000 in savings due to the EHE, it’s a small portion of a large tax bill. Whereas, a homeowner in the South Lawndale neighborhood will see a lower dollar amount in savings - say $900 - but their tax bill would be roughly $2,000, giving them an almost 50 percent savings.
Hope that helps.
Lucio Guerrero
Cook County Assessors Office
Comment by Lucio Guerrero Thursday, Oct 4, 07 @ 11:35 am
Bill-Property tax assessments are based on fair market value. The growth in value in Cook County over the past number of years has been in the residential sector, that’s why the overall burden has shifted. Commercial properties are (by ordinance)assessed at 38% of value; industrial at 36%;residential at only 16%. So business already pays at a much higher rate. Outside of Cook all properties are assessed at 33.33%. Politicians should stop demagoging the fair share issue.
Also, do people know there’s a loophole you can drive a truck through in the exemption statute in effect since 2004, and in both new versions? If you buy a house, your base year becomes the year in which you purchase, in which case your exemption drops from $40,000 ($33,000,$20,000, or whatever it winds up being)to $5,000. Welcome stranger!
Comment by letzambranopitch Thursday, Oct 4, 07 @ 11:36 am
Gimme a break, Bill. Cook County homeowners are notoriously UNDER assessed, and commercial taxpayers pay a MUCH greater share of the property tax burden than in other counties because of the classification system. Ask a competent appraiser for help in appealing your Cook County residential assessment, and he’ll tell you, “An appraisal won’t help you - I’ll value your house MUCH more than the assessor did.”
As to people complaining about skyrocketing assessments and an increase in their property tax bill, the only people whose taxes SHOULD be going up are those whose value has increased MORE than other taxpayers. In an “ad valorem” tax system like the property tax, if you’re property value goes up more than other taxpayers, you pay a bigger piece of the tax pie. That’s the way it works. If we don’t like the system, then we have to come up with a different way to pay for local government. Good luck.
Funny, I’ve never heard anyone from Cook complain that their property value has soared when they go to sell their house, or cash in on some of their equity. . .
The other thing most taxpayers don’t think about is that higher property values as a whole do not increase property taxes as a whole. The only thing that increases property taxes is higher local government spending. Period. And Cook County taxpayers should be dealing with that at the local level, not in Springfield.
Comment by Unmitigated Gall Thursday, Oct 4, 07 @ 11:42 am
If there is a 10% cut in any tax, the one paying a larger bill will naturally net a larger savings. This has nothing to do with the property owner’s ability to pay.
Progressivity has never been a part of the property tax code. It is erroneous to say thay any person with a larger tax bill has the same abulity to pay. There are many seniors who have been forced from their lifelong homes simply because they cannot afford the skyrocketing property tax bills. Where is the fairness in that?
Illinois’ reliance on huge property taxes (7th highest in the US I believe, US Census) is the most unfair way to collect revenue possible. One can own a piece of property free and clear, but if you cannot cough up Chicago 1.1% , Crystal Lake 2.04%, Sycamore 2.48%, Cairo 2.96%, Oak Park 2.979% of your property value annually, your property will be taken away from you.
If you want to go on about fairness, why do Chicago residents pay a lower percentage of their value to the tax collector than to those folks in Cairo or Oak Park? If you have a property in Chicago, of the same value as that of Oak Park, why should the tax be 1/3?.
Seems to me that fairness dictates that everyone in the state be able to support their fair, (meaning equivalent) share of property taxes. That burden currently is not equivalent.
So I have to ask Cassandra, what are you thinking? How do you define fairness? and who is to judge as to whether someone is capable of paying higher taxes?
Comment by plutocrat03 Thursday, Oct 4, 07 @ 11:43 am
i pay $6000 in property taxes in Macoupin County - which is ridiculous - i couldn’t sell my property for the fair market value the county has placed on it and home values are much much less in central illinois - salaries also
Comment by central illinois Thursday, Oct 4, 07 @ 11:44 am
Our tax systems, including property tax systems, are so complicated that it is very difficult to say who is benefitting and who isn’t with a Masters in Tax Policy. And I certainly would be happy to see a shift away from property taxes to a truly progressive income tax to fund the schools, but that seems unlikely in Illinois…too many rich pols and their corporate buds would lose out.
But I would point out that an increase in one’s property values (as has, yes, occurred in OP)
doesn’t mean the homeowners can easily fork out
tends of thousands of dollars in property taxes.
The value of one’s property in an ever-shifting property market doesn’t mean the homeowner is wealthy. Or perhaps some commenters are suggesting that we middle class homeowners in high-property-tax areas should simply keep moving
around when our property taxes get too high.
Eternal middle class wanderers looking for a decently priced place to live…for a while.
Comment by Cassandra Thursday, Oct 4, 07 @ 12:18 pm
LUCIO
YOUR CALCULATIONS AND ANALYSIS IS AS INCORRECT AS THE LEVEL OF ASSESSMENTS THAT COME OUT OF YOUR OFFICE EVERY YEAR. WE NEED A NEW AND PROFESSIONAL ASSESSOR WHO DOES NOT HAVE A POLITICAL AGENDA ! HOULIHAN SCEWS UP THE ASSESSMENT PROCESS AND THEN RUNS TO SPRINGFIELD SEEKING COVER ! IF THE TAX BILLS ARE TO HIGH WHY DOESN’T HOULIHAN CALL A SPADE A SPADE? GOVERNMENT SPENDS TO MUCH !!!!!
Comment by MOON Thursday, Oct 4, 07 @ 12:21 pm
Stop all the Byzantine nonsenxe — which is designed specifically to keep the property taxpayers from examining how much is spent by the fat cat politicians. All these caps are designed that way. Stay home and snooze, brother. Stay away from attending board meetings. Don’t look at the bloated budgets giving, among other things, double dippers the ability to contribute more to campaign funds.
Fairness says, freeze everyone’s valuation now. Dump the State multiplier — the first line of deception — in levying property taxes (use it for other purposes if you want.) When you know your valuation straight away, you can directly evaluate the spending going on.
When sold or improved a new valuation will be assigned. The new buyer, if smart, may not offer the fulll inflated value, but just consider that you have gotten by with less taxes while you have owned the house.
Houlihan designed a monster. It is time to slay it.
Comment by Truthful James Thursday, Oct 4, 07 @ 12:25 pm
Hey Lucio. Maybe the Almighty Assessor Houlihan should start assessing property according to real market value. Maybe the Almighty Mr. Houlihan is too busy trying to defend the employee that ran the Freedom of Information department in the Cook County Assessor’s office.
Comment by Cook Taxpayer Thursday, Oct 4, 07 @ 12:27 pm
Letzambronopitch
This is not “welcome stranger ” but rather Houlihans ” welcome to the neighborhood “.
Comment by MOON Thursday, Oct 4, 07 @ 12:39 pm
letzamwhatever,
Assesments are NOT based on “fair market value”. The owner of a frame 2 bedroom cottage on the same block that has new million dollar townhouses popping up will get an drastically inflated (and unfair) assesment. This is what is forcing lower midle income families amd seniors out of their homes and their neighborhoods. Spare us the double speak.
Comment by Bill Thursday, Oct 4, 07 @ 12:43 pm
Lucio
A $2000 savings is greater than a $900 savings………although your analysis is wrong……the guy who saves $2000 benefits more than the guy who saves $900 !
Comment by MOON Thursday, Oct 4, 07 @ 12:45 pm
Wow Lucifer got whacked pertty good. I did not realize what Houlihan was doing with the FOI filly was “defending” thanks for clearing thay one up.
I gotta wonder the price tag on Cassandra’s crib. If the assessment went up $16.000 then I would guess it worth 400K if the tax bill went up 16K I am guessing the number is about $800K.
Wonder if everyone thinks that is who needs tax relief.
Finally can anyone out there explain what the ratio of business tax to homeowner tax has to do with anything? Biz pays what they owe and homes do the same. Who pays more depends whether there are more biz payers or homeowners.
This is the kind of nonsense one hears from Blaggo all the time
It just makes no sense.
Comment by Mr. W.T. Rush Thursday, Oct 4, 07 @ 1:01 pm
Those homeowners who can’t pay their taxes due to increased values, maybe should have paid their taxes instead of buying new cars or paying off credit card debt with their money back refinancing schemes.
Comment by True Comparison Thursday, Oct 4, 07 @ 1:03 pm
Bill —
First time you have been wrong in awhile.
The Twp Assessors tell the lad with the frame cottage what the tax category is for that style and size and age of a residence. They then offer him books to make a comparison with all others with the same category and challenge him to do the comparables and if there are others with lower valuations he gets a drop.
It is the spy on your neighbor method.
And of course if he can show that his actual current purchase price reflects a 16%AV higher than what the Assessor assigned, he can get it reduced.
What he does not know is that the true assessment ratio is well below the statutory 16%, sometimes as low as 10% in the comparables, so as a new purchaser he is bound to screw himself.
In Real Estate Law there is no such thing as a true comparable, enabling a seller to substitute one property for another. I repeat. There is no such thing as two properties being identical.
Freeze the valuations, give the new purchaser the ability to know what his AV will be. The price he will offer should take into account the effect of future taxes higher than his Real Estate broker is willing to disclose.
Comment by Truthful James Thursday, Oct 4, 07 @ 1:11 pm
Bill, assessments are a fractional percentage of fair market value. In Cook County residential properties are supposed to be valued at 16% of their fair market value. They are actually valued at a little less than 10% of their fair market value. I don’t know what you’re talking about there, but the property tax is an ad valorem tax. Check your facts.
Comment by Gene Parmesan Thursday, Oct 4, 07 @ 1:14 pm
Madigan’s 7% cap happened the right way. People put pressure on their legislatures who pressured Madigan to pass the tax relief bill. Blago is playing a ridiculous and ill advised game of one upsmanship to trash the bill and make the Speaker look bad.
Once again he thinks he is smarter than everybody else. People are waiting in dread for their tax bills but the Governor still needs to play games.
Pass the bill already and move on to the next fued.
Comment by Garp Thursday, Oct 4, 07 @ 1:26 pm
What most of the above comments suggest to me is comprehensive reform of the property tax system. It would have to be sustainable, fair, efficient and responsive. It would also need to include meaningful accountability measures for those units of local government - particularly the schools - which rely so heavily on the property tax. We were headed in this direction at the beginning of the 2007 legislative session. There were several organizations that called for such reform and offered siginficant reform ideas (Civic Committee, Metropolitan Mayors Caucus, A+ Illinois, Senator Meeks and Ralph Martire, etc.) There were many legislators in addition to Meeks who would have supported such reforms, too. Unfortunately, the Governor’s intransigence on the GRT and health care as well as his “no income or sales tax increase” folly ruined any chances of any of this happening.
Anybody know how the investigations into the Governor’s office are going at the U.S. Attorney’s shop?
Comment by GA Watcher Thursday, Oct 4, 07 @ 2:17 pm
Gene,
What I am talking about, as you well know, is that property is assesed based on sales of “comparable” properties in an area. It has nothing to do with the actual “market value” which I interperet as what you could actually sell the property for. The assesor has does NOT asses each individual property. He estimates using a series of formulas what he percieves has happened to property values in a given area.
Maybe it is ad valorem but the problem, in many cases, is with the way the valorem is calculated.
Comment by Bill Thursday, Oct 4, 07 @ 2:22 pm
WT,
It does make sense. The IMA and Baise are whining about the cap being an unfair burden on business. Actually, business has been shouldering less and less of their fair share of the tax burden. I’m not suprised that you don’t understand. Stick to thinking up wise cracks abput your co-workers in the capitol. Maybe Goerge W. could use a new flack.
Comment by Bill Thursday, Oct 4, 07 @ 2:28 pm
The one guy who’s missing in action in this fight is Mayor Richard Daley, and he’s got the most to gain or lose. He’s set to raise city property taxes by $108 million at the same time the property tax assessment cap could be lifted. Ouch!
Comment by Up North Thursday, Oct 4, 07 @ 2:45 pm
Bill, you’re correct in that the assessor does not individually value property. He uses a mass appraisal system based on sales and other factors to derive a market value. There are all kinds of “market values” and I have neither the time nor inclination to explain them all and how they relate to assessment. The point is that the assessor is supposed to value properties at a specified percentage of their market value and Houlihan doesn’t do it. He sets the values where he wants and lets the state multiplier clean up his mess. He needs to go.
And all these Cook taxpayers that don’t like what their having to pay for property taxes need to start paying more attention to who they vote for. The County Commissioners, school boards, other local govt entities are responsible for determining how much you pay, the assessor is supposed to just figure out how much your house is worth.
Comment by Gene Parmesan Thursday, Oct 4, 07 @ 2:57 pm
It’s not all on Houlihan, don’t forget the Board of Review. They’ve also done what they could to muddy up this process.
Comment by cermak_rd Thursday, Oct 4, 07 @ 3:15 pm
Bill,
The narrative is easy, it springs from the lips. But please define quantitatively what a ‘fair share’ is for business.
Does it vary, based on number of employees or total sales, or facility size?
Is it a fair share bivined by property taxes per sq.ft.? If so, is a fair share $6.00 per sq.ft. in Cook County as opposed to $2.50 per sq. ft in the collar counties, or under $2.00 pewr sq.ft. in Indiana? Which is fair?
A business is an aggregation of owners, employees and customers. We see the effect of high property taxes in the strip malls and storefronts, as signified by the “For Rent” or “Space Available” signs.
What was fair to the tenant or former tenant, Bill? The ma and pa stores who shell out for the property taxes passed through and they can’t raise prices, because if they do the customers disappear.
What is fair share, Bill, knowing that consumers and tenants pay the property taxes.
What is fair, Bill about the hit upside the head by the State Equalizer of 2.83 times the 38% Assessed Valuation that tthe Assessor throws against every commercial property recently sold. Business pays against the equalized valuation which is 107.54@ of the recent sales price, not 33% in those counties who have a State equalizer of 1.0
Residents on the other hand who are de facto AVd at 12% of estimated market value have equalized values of 34% — whichm by the way is higher than the 33% in other Counties. But homeowners are restricted to 7% increases in taxes per year.
Not so for commercial property.
What makes it feasible for the big boxes and the Michigan Avenues to stay in business? Volume — sales dollars per sq. ft. Your vanilla Wal-Mart dows $450; the ma and pa does $100 per year. Your Michigan Avenues may do $750 and have much higher profit margins. Those are the only reasons they can stay in business while the ma and pa struggle or go out of business.
So what is fair share, Bill? If comemrcial is generating less total property tax dollars compared to residential, as opposed to the past, even though they are paying higher and higher dollars per sq. ft., the answer would be that there are relatively lower growth in commercial sq. ft. than in residential sq.ft. It is as simple as that. And, of course, we are building more and more expensive residential properties, which means higher gross dollars in residential property taxes.
The fact of the matter that, except for you and the old like Democrat reprobates fair share means what one needs to say to be elected.
There is really, really no such thing as fair share. Admit it. When you do we can start to develop a new property tax system, indeed a new tax structure which incentivizes capital, whether commercial or industrial or residential capital to invest in Chicago, in Cook County and in Illinois. We can design public works to attract that capital and make this area the place of choice in which to invest, to work and to live.
Comment by Truthful James Thursday, Oct 4, 07 @ 4:24 pm
What is so special about cook County to have their assessments set at 16% when the rest of the state is set for 33%? I’m surpried that some enterprising barrister has not tried to form a class action in search of fairness!
I have had a good look at the the so called mass appraisal software in use in one county. The problem is that there is no way to answer the question of “why did my assessment rise so much”? They mumble about value increases, but no specifics. I believe that the assessors who use that software have no clue as to what the software is churnig out. As long as the township EAV keeps rising, they are happty
As mentioned by other in this thread, the assessent process is overly complicated with fractional assessments, multipliers, exemption etc. In our area homes are hitting the 200 day realestate marketing time while being listed below what the assessor has the property valued at. Does this mean the assessed value will be expeditiously decreased to reflect the true market value of the property?
I can tell you that in my neighborhood, a property owned by a politically connected family has a per/sq foot valuation at the very bottom of the range (more than 15.00 per/ sf less than the average) of a house of that type in a neighborhood.
I recognize the job of an assessor is a difficult one, but as Willie Sutton said after his capture, Why do you rob the banks —that’s here the money is…. Any attempts at tax reform have to address the unfair assessment system (I know that is what the equalizer is to do, but it does’t)
Ilinois has too many taxing bodies, too many do gooders, too many people who do not want to be bothered with all this nonsense.
Comment by plutocrat03 Thursday, Oct 4, 07 @ 4:32 pm
The talk last night in Springfield was that Houlihan would be making nice with Madigan now that he FINALLY realized that playing ball with Blago was a bad idea. One of his minions (P.H.) was blabbering that he was going to advise “The Assesor” to sit down with Madigan ASAP.
Comment by Springfield Player Thursday, Oct 4, 07 @ 4:46 pm
How can a state have too many do gooders?
Comment by Bill Thursday, Oct 4, 07 @ 4:46 pm
Springfield Player,
Don’t count on Houlihan sitting down with Madigan anytime soon, whatever his “blabbering minion” advises.
Comment by North by Northwest Thursday, Oct 4, 07 @ 6:44 pm
That easy Bill.
In this state a do gooder is a person or entity who/which will espose a good cause, with the proviso that the collective i.e. the taxpayer has to pay for the good deed.
Their concience appears to be eased and the cost to the collective is only a few dollars a week….
Well, the collective in Illinois is struggling with all the good causes. The best donation to the needy is to identify a good cause and to donate to it directly. Running it through govenment filters an immense amount of money away from those who need the help. They lard in so much overhead that I bet that less than 50% goes where it is needed.
Lets start rememembering Jack Kennedy, who said something to the effect of ‘Ask not what your country can do for you, but what you can do for yur country.’
I am ashamed to hear reasonably well off people scheming on how to latch onto a governmental program.
Comment by plutocrat03 Thursday, Oct 4, 07 @ 7:48 pm