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Commercial property taxes dropped by $122 million in the south and southwest suburbs, while residential taxes jumped 20 percent

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Illinois

* The full study is here. Cook County Treasurer press release with emphasis added by me…

Homeowners in many south and southwest suburbs will have to pay a lot more in property taxes as the median tax bill jumped a record 19.9% in the region, according to an analysis released today by Cook County Treasurer Maria Pappas.

The biggest increases in homeowners’ tax bills occurred in 15 south suburbs where taxes soared 30% or more. Of those 15 suburbs, 13 have mostly Black populations. In two towns, Dixmoor and Phoenix, the median tax bill more than doubled.

“Many homeowners are going to be shocked and angry when they get their bills,” Pappas said. “South suburban homeowners already pay some of the highest property taxes in the county, and these increases will make paying those bills even more difficult.”

A research team created by Pappas released its Tax Year 2023 Bill Analysis, a detailed examination of nearly 1.8 million bills to be mailed to property owners July 2 and due a month later on Aug. 1.

This year’s Second Installment bills include a new feature, “Where Your Money Goes,” that breaks down the amounts of money billed by each taxing district and shows whether taxes went up or down.

Among key findings of the analysis:

• Across Cook County, property taxes rose about $706 million, climbing from $17.6 billion to $18.3 billion. Homeowners are shouldering an extra $611 million, or nearly 86% of this year’s increase, while commercial properties owe an extra $102.9 million and taxes on vacant land dropped by $7.8 million.
• In the south and southwest suburbs, where all properties were reassessed, taxes rose a total of $265.4 million. The median south suburban residential tax bill increased by 19.9%, the largest percentage increase in at least 29 years, according to Treasurer’s data. Homeowners bore the brunt of the increase as their taxes rose $396.8 million while taxes on commercial properties dropped by $121.6 million.
• In the north and northwest suburbs, taxes rose $213.7 million from $4.06 billion to $4.27 billion. Residential taxes increased $109.8 million while taxes on commercial properties increased $103.1 million.
• In Chicago, taxes increased by a modest 2.6%, largely because of an increase in the Chicago Public Schools tax levy and bill increases in many tax increment finance districts. In the north and northwest suburbs, overall taxes rose by 4%, with slightly bigger percentage increases for businesses than homeowners.

Homeowners in the south and southwest suburbs are being hit hard because new assessment shifted 4% of the overall tax burden from businesses onto them. The financial shift was caused by elimination of the 10% COVID-19 assessment reduction enacted in 2020, higher home selling prices and the success businesses had appealing their assessments at the Board of Review, which handles appeals of valuations made by the Assessor’s Office.

Particularly hard hit were homeowners in Park Forest, where the median residential bill rose by 56% to $7,152. In Dixmoor, the median bill increased by 122%, to $1,950. And in Phoenix, where nearly all of the village is in a tax increment finance district, the median bill shot up by 107% to $1,744.

Nearly 4,200 south and southwest suburban homeowners who paid no taxes last year will get bills this year. That’s because the value of their exemptions no longer exceeds the higher assessed values of their homes. The median for those bills was $1,115.

Across the county, more than 1.3 million homeowners must pay more in property taxes, while about 251,600 were billed less. Taxes for more than 88,000 commercial properties increased, while nearly 28,000 went down.

State law allows school districts to hike taxes by the prior year’s increase in the Consumer Price Index, or 5%, whichever is less. Because the CPI increased by 6.5% in 2022, school districts were allowed a 5% increase. But the overall percentage increase was higher, partly due to a provision called recapture.

Recapture is a 2021 provision in the Illinois tax code that allows school districts and many local governments to recover money refunded to property owners who successfully appealed their taxes the previous year. Recapture led to an additional $136.3 million being tacked onto bills this year. That’s $51.9 million less than was added to property owners’ bills last year.

Significant increases in the amount of money the city of Chicago and Chicago Public Schools said they needed to operate, coupled with recapture and higher tax increment financing district bills, boosted the overall property tax burden in Chicago by $221.8 million. That broke down as a $116.6 million increase on commercial properties and a $103.9 million increase on residential properties.

* Sun-Times…

“But because of the shift of assessed value from commercial to residential in the south and southwest suburbs, less than a third of businesses in that region received higher bills for tax year 2023,” treasurer’s officials concluded. “Even though tax rates in the south suburbs declined, in some cases significantly, the 19 highest tax rates in Cook County are still in Chicago’s south suburbs, where the population is primarily lower-income Black residents — demonstrating once again the stark inequities in the Illinois property tax system.”

* Tribune…

In Park Forest, where the median bill is up by $2,567 to $7,152, Mayor Joseph Woods called the increases a “catastrophe” for homeowners and said the village is working to influence policy changes at the county and state levels while seeking out grant funding to avoid having to levy more taxes at the village level.

“We know that there seems to be an unfairness or inequity in regards to the way, you know, properties are assessed,” Woods said in an interview Wednesday. “So we’re looking at every option and trying to lobby everyone.”

The village is split between Cook County and Will County. Woods said the difference in taxes is stark depending on which side of the border people live.

* Daily Herald…

Pappas urged state lawmakers to take action.

“This is the 30th year in a row everything’s increased,” she said. “You can’t keep studying the property tax system and keep saying it doesn’t work then do nothing about it. It’s time for Springfield to make changes.”

posted by Rich Miller
Thursday, Jun 27, 24 @ 11:05 am

Comments

Chicagoland needs the land value tax system which does not penalize property improvements in the way that the property tax system does.

Comment by LVT Enjoyer Thursday, Jun 27, 24 @ 11:13 am
Park Forest - Average bill is $7,152.

Via Redfin, the average home price was $150k in Park Forest. So, they are paying 4.7% of their home’s value in property taxes.

By comparison, in my rural community, I’m paying about 2%

Comment by Downstate Thursday, Jun 27, 24 @ 11:14 am
Whatever the institutional means used, the institutional means used seems to have targeted black citizens, if 13 of the 15 suburbs that saw +30% increases are majority black.

This is how institutional discrimination works. It does not have to be intentional. It is the outcome that demonstrates disparate effects along ethnic lines.

If for example, unequal earnings and segregation leads minority citizens to buy homes in lower priced neighborhoods, and then those neighborhoods are shown to have been reassessed at higher rates of increase relative to other neighborhoods, then the effect impacts minority citizens more, through no fault of their own. Institutional discrimination becomes institutional racism.

The policy needs to be reviewed.

Comment by H-W Thursday, Jun 27, 24 @ 11:32 am
===Park Forest - Average bill is $7,152.

Via Redfin, the average home price was $150k in Park Forest. So, they are paying 4.7% of their home’s value in property taxes.

By comparison, in my rural community, I’m paying about 2%===

In comparison, a commercial property valued at $150k in Park Forest will see a tax bill of approximately 17,880. The Assessor’s desire to shift an even higher burden onto the commercial tax base is criminal.

Comment by Sox Fan Thursday, Jun 27, 24 @ 11:32 am
>> “This is the 30th year in a row everything’s increased,” she said. “You can’t keep studying the property tax system and keep saying it doesn’t work then do nothing about it. It’s time for Springfield to make changes.”

They did. Then the Illinois electorate said No.

Comment by ZC Thursday, Jun 27, 24 @ 11:33 am
Does anyone report, by taxing authority, how much property tax revenue is “foregone” for senior citizens, disable veterans, whatever else?

Comment by Anyone Remember Thursday, Jun 27, 24 @ 11:41 am
At some point, we have to address that Fritz Kaegi and his staff overassess a lot of property.

Comment by Rahm's Parking Meter Thursday, Jun 27, 24 @ 11:43 am
Tell lawmakers not to file Senoir freeze legislation like SB2030 - which would have increased the income eligibility to 75K versus the current 65K- the senior freeze while a well-meaning feel-good program creates a huge tax burden shift to other resident taxpayers.

Comment by Donnie Elgin Thursday, Jun 27, 24 @ 11:48 am
“where nearly all of the village is in a tax increment finance district”

This is an expected feature of what happens when places turn their town into a TIF, not a bug.

For reference, my approx prop tax rate is 1.4%, based on an appraisal that was coincidentally done last week, and current year taxes paid.

Comment by TheInvisibleMan Thursday, Jun 27, 24 @ 11:49 am
Its a strange world when Maria Pappas can be right on policy issues. Maybe hiring all those former Tribune reporters worked.

Comment by Bohemian Rap City Thursday, Jun 27, 24 @ 11:50 am
“In comparison, a commercial property valued at $150k in Park Forest will see a tax bill of approximately 17,880.”

Yikes. Buying property in an area like that can be “catching a fall knife”. Someone that’s willing to pay $7k/year in property taxes, typically doesn’t want to live in a $150k house.

If prices don’t increase, but local spending does, then even higher taxes will be needed.

Interesting to note on Realtor.com the number of homes for sale at less than $200k. One house, at $200k with 6 bedrooms has an annual tax bill of $12k. That’s 6% of it’s offer price.

Comment by Downstate Thursday, Jun 27, 24 @ 11:52 am
===we have to address that Fritz Kaegi and his staff overassess a lot of property===

Or that the Board of Review reverses too many commercial tax increases.

Comment by Rich Miller Thursday, Jun 27, 24 @ 11:52 am
- Sox Fan - Thursday, Jun 27, 24 @ 11:32 am:

You’re reading level is about as good as the Sox winning percentage. Try again, this time for comprehension:

== In the south and southwest suburbs, where all properties were reassessed, taxes rose a total of $265.4 million. The median south suburban residential tax bill increased by 19.9%, the largest percentage increase in at least 29 years, according to Treasurer’s data. Homeowners bore the brunt of the increase as their taxes rose $396.8 million while taxes on commercial properties dropped by $121.6 million.==

Heck, Rich even bolded the last sentence!

Comment by Google Is Your Friend Thursday, Jun 27, 24 @ 12:01 pm
===Or that the Board of Review reverses too many commercial tax increases.===

Per your reporting, the recapture provision tacked on an additional 136M to the property tax levy. If the BOR sustains all of the CCAO’s commercial values and property owners seek relief at PTAB, we likely end up in the same place (or worse when factoring in the interest on those elevated refunds).

Comment by Sox Fan Thursday, Jun 27, 24 @ 12:01 pm
Any comment from the Property Tax Relief Task Force?

Comment by City Zen Thursday, Jun 27, 24 @ 12:02 pm
“Does anyone report, by taxing authority[…]”

GPT can probably do it for you.

Identify the source of the info, likely at the township level. Also potentially can be gained through a county GIS system portal, but will take a little more complex of a prompt. Then feed that into GPT as the source. You can probably even use the url directly in the prompt instead of setting it up as an external datasource.

I haven’t done this myself, but you’ve sparked my interest enough to light a fire of motivation that I will be doing it with my local GIS this weekend.

Comment by TheInvisibleMan Thursday, Jun 27, 24 @ 12:07 pm
I live the Village of Riverdale (not the Chicago neighborhood by the same name). Assessor raised my value from 45K to 95k in ONE year. On appeal they “lowered” it to 81K. Board of Review went to 71K. I’m now before the PTAB asking for a value of 55K, because that was the only offer I got on my house in 2022. But hey, commercial properties didn’t go up in value like my house did in a year?? It’s farcical.

Comment by thisjustinagain Thursday, Jun 27, 24 @ 12:10 pm
-Google is your friend

I’m not sure what I said that you’re taking issue with. The facts are that commercial property is assessed at 25% of its market value and residential at 10%. So a commercial property assessed at the same market value will pay a tax bill 2.5X higher than a residential property with the same market value. If you don’t believe me, Google it.

Comment by Sox Fan Thursday, Jun 27, 24 @ 12:12 pm
This is dealing with the extremes, but this same thing happens in every town. Granted to a much less severe degree. How many people look at the local tax rolls to see this though? I’m sure I can count the number on one hand.

While your residential assessment will change every single year, commercial properties will stay locked at the same assessment for years. Even without being in a TIF.

I have a GIS tab already open, and looking at a specific nearby to me example, the local Steak and Shake has a property assessment this current year of 2024 set to 464k, with 35k of property taxes due. In 2019, their assessment was… 464k. With 35k of property taxes due. Yes, they are paying less property taxes in 2024 than they paid in 2019, even with the exact same assessment in both years.

Like I said, the cases presented here are the extremes, but that same framework exists everywhere. Personally, I think everyone should know how this works, but in all honesty nothing is stopping anyone from seeing this themselves. The data is all public and extremely easy to get to.

Comment by TheInvisibleMan Thursday, Jun 27, 24 @ 12:19 pm
For a breakdown of tax bills by taxing district, go to Cook County Property Tax Portal (website from Pappas’ office) and type in the property PIN and you can get all taxing districts, their rates and their percentage increases.

Comment by Joe Bloe Thursday, Jun 27, 24 @ 12:23 pm
The Assessor issues assessments, not the Board of Review. It wasn’t uncommon for residential increases by his office to be upwards of 100% for south and western suburban homeowners during the reassessment last year. How does a family budget for that?

Comment by Boone's is Back Thursday, Jun 27, 24 @ 12:25 pm
Thanks Rich for the additional coverage on this since I commented about this part on the morning briefing earlier.

I don’t know how prevalent these issues but it definitely isn’t only a Cook County issue. (Reposting part of my earlier comment) “I’m in the city of Kankakee and our 2023 residential assessments rose by 14% while industrial/commercial value was flat. The city requested a 3% increase in the tax levy but that resulted in a 9% increase in the city portion of the taxes for residential owners while commercial/industrial are getting a reduction.” When I bought my house 2 years ago, my first property tax bill was about 3.5% of my purchase price. Now my second property tax bill (correcting for the 14.25% increase in assessments) is now about 3.8% of my assessed FMV.

A big part of my issue with the property tax system in my county (and Illinois) is how opaque the process is and the lack of any easy way to find properties to use in an assessment appeal. Sure I can try to look at Zillow and Redfin to see square footage and beds/baths but that won’t do any good for the large number of homes that haven’t sold on 20+ years. The tax bills are online but they don’t contain any info about the actual house that is useful for filing an appeal. If I compare recent sale prices to the assessed value then a large majority of houses are assessed at lower (or much lower) than the 1/3rd of the value of the house. Meanwhile my house is assessed at 1/3rd of what I paid for it so I’m paying higher taxes than houses that are worth quite a bit more than my house.

I need to try talking to my assessor again about this but last time I talked to him he acted like he was doing me a favor by bringing my assessment down to exactly 1/3rd of what I bought the house for. I don’t want to try to get out of paying taxes that I owe, I just don’t want to be paying comparitively more in taxes than almost everyone else in my neighborhood.

Comment by Aaron B Thursday, Jun 27, 24 @ 12:26 pm
=== How does a family budget for that? ===

They can’t. He is literally screwing over families.

Comment by Hannibal Lecter Thursday, Jun 27, 24 @ 12:28 pm
From the study: “The biggest TIF tax decline in the south and southwest suburbs was in the Interstate Crossings TIF district, home to an Amazon distribution facility in Markham, which is billing $5 million less than last year, for a total of $15 million.”

So property was put into a TIF because it was blighted, tax money from the property in the TIF was targeted to support the development of an Amazon distribution facility and the tax bill for the TIF went from $20m to $15m “because the assessed value of the properties in those districts dropped below where they stood when they originally were formed.” Imagine the drop in the assessed value without the Amazon distribution facility.

Comment by Two Left Feet Thursday, Jun 27, 24 @ 12:33 pm
—The Assessor issues assessments, not the Board of Review. It wasn’t uncommon for residential increases by his office to be upwards of 100% for south and western suburban homeowners during the reassessment last year. How does a family budget for that? —-

This right here. Kaegi will point his fingers at everyone else (Board of Review, PTAB, tax rates, Berrios, etc…) but the reality is he has no idea what he is doing. His office is very good at PR but terrible at assessing.

The Trib story has houses in Phoenix Illinois (not Arizona) seeing assessment increases of 170%. You can talk about commercial properties and tax rates all you want, but in what world can you justify a 170% assessment increases in Phoenix Illinois?

Comment by Timzilla Thursday, Jun 27, 24 @ 12:37 pm
People really need to stop misusing the word “literally.”

Comment by Ugh Thursday, Jun 27, 24 @ 12:37 pm
==They did. Then the Illinois electorate said No.==

There is no plausible reason to believe that property taxes would have decreased, or not increased, at any point over the past four years had the Fair Tax passed.

Comment by Garfield Ridge Guy Thursday, Jun 27, 24 @ 12:49 pm
==- Sox Fan - Thursday, Jun 27, 24 @ 12:12 pm:==

Fact: “taxes on commercial properties dropped by $121.6 million.”

Comment by Google Is Your Friend Thursday, Jun 27, 24 @ 12:52 pm
“They can’t. He is literally screwing over families.”

Absurd.

I budgeted for my property taxes to be 100% higher by the time the house would be paid off, when I first bought my house.

Even with regular inflation you should expect a doubling of prices, including property taxes, every 23 years or so. That’s a shorter amount of time than most mortgages. Why would people not budget for that? Sure, the 100% came sooner than expected but that’s why its budgeted in the first place, to give you time to find another place to live when that limit is hit.

Not every personal problem is the governments fault.

Comment by TheInvisibleMan Thursday, Jun 27, 24 @ 12:58 pm
Hat tip to Treasurer Pappas on her work in this area.
These property tax increases are really unfortunate.

Comment by Back to the Future Thursday, Jun 27, 24 @ 1:04 pm
With Madigan and Burke out of the picture, who has the legal services property tax concession? Whoever they are, they must be making a killing in legal fees.

Comment by Huh? Thursday, Jun 27, 24 @ 1:33 pm
Rich, just saw your comment, also fair.

Comment by Rahm's Parking Meter Thursday, Jun 27, 24 @ 1:36 pm
“I budgeted for my property taxes to be 100% higher by the time the house would be paid off, when I first bought my house.”

Do you have any other budget items that increased by 56% from one year to the next? That’s what Park Forest homeowners are facing. There’s no reasonable forecasting that would ever account for that.

Comment by Downstate Thursday, Jun 27, 24 @ 1:43 pm
==There is no plausible reason to believe that property taxes would have decreased, or not increased, at any point over the past four years had the Fair Tax passed.==

Yep. Case in point: California. Despite having the most progressive state income tax in the country, highest tax bracket in the country, and repeatedly increasing their highest tax brackets over the years, unions keep trying to repeal Prop 13. And it’s not like CA has the lowest property taxes to begin with.

Comment by City Zen Thursday, Jun 27, 24 @ 1:50 pm
“There’s no reasonable forecasting”

Yes there is, if you are budgeting properly. With a 56% increase in one year, while certainly a large hit, you should still have a 44% cushion in your property tax budget.

The only accelerating variable in this situation is the timeframe, not the amount.

Comment by TheInvisibleMan Thursday, Jun 27, 24 @ 1:54 pm
Totally unsustainable state wide and it will lead to many city bankruptcies state wide (no choice) during the next major downturn, which will be here soon due to inflation. Enjoy the pension cuts.

Comment by Nothing Thursday, Jun 27, 24 @ 1:59 pm
=== Not every personal problem is the governments fault. ===

I have been in my home for less than 5 years, or less than 2 full assessment cycles.

Comment by Hannibal Lecter Thursday, Jun 27, 24 @ 2:11 pm
“Enjoy the pension cuts”

Nope. Constitutional protected. This has been argued on this blog ad nauseam.

Comment by Huh? Thursday, Jun 27, 24 @ 2:13 pm
===many city bankruptcies===

They have to approved by the state.

Comment by Rich Miller Thursday, Jun 27, 24 @ 2:15 pm
Aren’t we kinda taxed to death in this region?

Comment by Old IL Dude Thursday, Jun 27, 24 @ 2:17 pm
Nothing, in September of 2015 - almost 9 years ago - you wrote “I am so lucky to be leaving this state. Any of you morons that stick around will surely wish you hadn’t soon enough.”

And yet, here you are 9 years later with the same IP address.

Moron.

Comment by Rich Miller Thursday, Jun 27, 24 @ 2:21 pm
Even if assessment’s went down or stayed level wouldn’t real estate taxes still go up because the various taxing agencies are the ones asking for the money, not the assessor. In essence assessment gets lowered the taxes increase because pension, schools, forest preserve, etc. needs?
I don’t agree with my assessment but we also have to look at what the money is actually going to.

Comment by BigLou Thursday, Jun 27, 24 @ 2:26 pm
==Even if assessment’s went down or stayed level wouldn’t real estate taxes still go up because the various taxing agencies are the ones asking for the money, not the assessor. ==

Yes, taxes will still go up since the various agencies are usually requesting increases. At least some of the difference is that some areas are increasing the tax burden disproportionately on to home owners while lessening the burden on commercial property. In the City of Kankakee, the city requested a reasonable 3% increase in their levy. That 3% increase resulted in me paying 9% more to the city because residential assessments increased 14.25% last year and the commercial/industrial assessments were flat.

Comment by Aaron B Thursday, Jun 27, 24 @ 2:43 pm
Infuriating

Comment by Anthony Thursday, Jun 27, 24 @ 2:55 pm
… unions keep trying to repeal Prop 13. And it’s not like CA has the lowest property taxes to begin with.”

Not exactly.

Lloyd Bridges’ children “own” their father’s house. Because of Prop. 13, in 2018 they paid $5,700 property taxes on a $6,800,000 residence. If sold in 2018 (resetting Prop. 13’s calculator), new owners would pay over $76,000. (Google Search on “jeff and beau bridges property taxes” – 2018 LA Times story should appear first).

As advisor to Arnold Schwarzenegger, in 2003 Warren Buffett pointed out property taxes on his $500,000 home in Omaha were $14,401, but on his $4,000,000 home in Laguna Beach were $2,264. (Berkshire Hathaway link below.) Simply for raising the issue, Buffet was run out of CA (although Arnold’s media people said he was fired). CA’s property tax rates are “hit or miss” … .

https://www.berkshirehathaway.com/wsjstory.pdf

Comment by Anyone Remember Thursday, Jun 27, 24 @ 3:21 pm
I love it when Rich throws down the receipts.

Comment by Lagartha's Shield Thursday, Jun 27, 24 @ 4:02 pm
Tax rates are a big factor in the south suburbs where they are 3 to 4 times higher (21-25%) than in Chicago (7%).

Part of the difference is the relative scarcity of high value properties compared to the City.

Another part is that all these south suburbs have their own police departments, fire departments, and public schools. Combining some of these districts into larger area-wide districts would reduce tax rates. But that would also reduce the number of jobs that local elected officials want to control through their ability to appoint grateful supportive patrons.

Comment by JRM Thursday, Jun 27, 24 @ 5:54 pm