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ACLU exploring options to challenge Cook County property tax system

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* The Economist

“We sue the city every year,” says a wealthy Chicagoan who lives in an elegant apartment building in Gold Coast, a North side neighbourhood. If his property-tax lawyer manages to knock $100,000 off the bill for the condominium’s owners, as the lawyer has done in past years, he gets to keep $25,000. It is great business for property-tax lawyers—and a great saving for their clients.

The office of Joseph Berrios, the elected value-assessor of Cook County, America’s second-biggest county with 5.2m residents and 1.8m parcels of land, of which Chicago is part, encourages people to challenge their property-tax bills, arguing that it believes “in their importance as the taxpayers’ voice”. According to the Chicago Tribune, which put Jason Grotto, an investigative reporter, on the case for a year, such appeals tripled under Mr Berrios, who took over in 2010. In 2015 appeals concerning 370,000 parcels of land were filed. About 50% were successful (the success rate in New York City is 16%). Property-tax lawyers earned an estimated $133m from tax reductions they battled for between 2009 and 2015. The Tribune also reports that since 2009 Mr Berrios, who is also chairman of the Cook County Democratic Party, has raised about $5m through three different campaign funds, a record for an assessor in Illinois. More than half of that came from property-tax lawyers. Mr Berrios’s re-election campaign says only that it has $1.6m on hand.

“The system is unfair and corrupt,” claims Fritz Kaegi, a former investment manager who quit his job earlier this year to try to unseat Mr Berrios. Mr Kaegi refuses to take donations from property-tax law firms, especially those employing the state party’s top brass, and promises not to hire any relatives for county jobs if elected. Mr Berrios is an ally of Michael Madigan, the Speaker of Illinois’s House of Representatives, chairman of the state’s Democratic Party—and a partner at Madigan & Getzendanner, which represents dozens of the most valuable buildings in downtown Chicago in property-tax appeals. From 2008 to June 2016 the firm lowered its clients’ bills by at least $70m. Several members of the Berrios family are employed by the county, including one hired under Mr Berrios to work in his own office. […]

The American Civil Liberties Union is preparing a multimillion-dollar lawsuit on behalf of owners of homes in poor neighbourhoods. David Orr, the outspoken Cook County clerk, recently endorsed Mr Kaegi. “No action has been taken to clean up this mess,” says Mr Orr, who thinks that it suits most of his Democratic colleagues to keep things as they are. Still, at least he can count on the support of the party’s machine, including Toni Preckwinkle, the president of the Cook County board. A few months ago she ordered yet another review of the system by the Civic Consulting Alliance, a non-profit organisation, which according to Mr Orr is already stalling.

Emphasis added because I hadn’t seen that reported before. I reached out to the ACLU and was told the article may have overstated its position a bit…

We are looking at the issue and have been exploring a range of possible options.

posted by Rich Miller
Monday, Nov 13, 17 @ 1:29 pm

Comments

  1. Ok. Not a big fan of Berrios but what would be the legal argument for such a lawsuit?

    Comment by Anonish Monday, Nov 13, 17 @ 1:42 pm

  2. –Not a big fan of Berrios but what would be the legal argument for such a lawsuit?–

    Right. Seems more of a political argument than a legal one. Perhaps Equal Protection? By establishing and maintaining an unfair property tax system (as evidenced by the 50% appeal success rate), it unfairly discriminates against residents without the means, sophistication or ability to appeal something that if it was done right they shouldn’t have to appeal in the first place. The fact that some lawyers do these on contingency harms that argument.

    Comment by Ron Burgundy Monday, Nov 13, 17 @ 1:52 pm

  3. Shouldn’t the ACLU, which was appointed decades ago to monitor DCFS, be focusing right now on understanding how they have done such a lousy job keeping kids safe?

    There have to be atleast a half dozen organizations and plenty of clout aimed at reducing the property tax burden in illinois. BOMA doesn’t really need the ACLU to go to bat for them.

    Comment by Juvenal Monday, Nov 13, 17 @ 2:15 pm

  4. ==There have to be atleast a half dozen organizations and plenty of clout aimed at reducing the property tax burden in illinois.==

    Thank goodness there’s nothing to worry about! I guess we should expect everything to be under control in short order.

    Comment by charles in charge Monday, Nov 13, 17 @ 2:35 pm

  5. Grounds for appeal of the overall property tax structure in Cook County would have to be based mostly on metrics. For example, try some of the following:

    Breakdown all of City of Chicago into neighborhoods (86? different neighborhoods):
    - Number of parcels (By category; Residential, Commercial, Industrial, etc.)
    - Start looking at property sales values (by neighborhood) in comparison to prior year assessed values for each property in neighborhoods. Let’s see how accurate the County Assessor’s valuation models actually are (by neighborhood). That will be interesting……
    - Assessed values for each category.
    - Improvements/Lot values for each category.
    - Equalized value for each (after multipliers)
    - Exemption values (each type) for each category.
    - TIF ‘Frozen’/'Increment’ Values for each category
    - Start looking at each TIF district individually. - Start tracking all bond/reimbursement deals under each TIF district.
    - Start looking at the people/firms who setup/administering the TIF districts. Identify the players.

    You approach it this way & TPTB (The Powers That Be) will want you to go away - quickly.

    It’s a numbers game. The numbers will tell the tale.

    Comment by Anon Downstate Monday, Nov 13, 17 @ 3:00 pm

  6. For everyone not in a “poor” neighborhood, this would result in your astronomically high property taxes becoming astronomically higher. I can’t imagine homeowners in Schaumburg or Tinley Park don’t think that aren’t already paying more than their fair share.

    Comment by City Zen Monday, Nov 13, 17 @ 3:38 pm

  7. The legal argument is one of uniformity.

    Google: Cook county racist property tax christopher berry, and you’ll find the following: A University of Chicago professor has determined that the working poor pay a much higher percentage of their property’s value than the affluent in Chicago.

    In fact, Professor Chris Berry used the words “institutional racism” in his description of the current property tax regime in Cook County.

    Comment by FearTheTree Monday, Nov 13, 17 @ 6:07 pm

  8. To me, the legal argument is the same as what has been used regarding the pensioners.

    Article XIII Section 5, Pension and Retirement Rights, says “shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”

    How many times has that boundary been drawn? Everyone respects the line; we would not dare diminish or impair.

    So now look at Article 10, Section 1, Goal-Free Schools. It says, “The State has the primary responsibility for financing the system of public education.”

    (I’m not a lawyer but it seems obvious that stating the primary responsibility is an aside to goal-making.)

    So why is this boundary not drawn? Why? The State has gotten away with this for decades; they’ve essentially abdicated and the property tax levies have swelled to ridiculous and damaging levels.

    ACLU should sue the State of Illinois for not following the IL Constitution, which disproportionately is creating a hardship for Illinois residents, especially some.

    Comment by cdog Monday, Nov 13, 17 @ 7:07 pm

  9. Link to IL Constitution
    http://ilga.gov/commission/lrb/conmain.htm

    Comment by cdog Monday, Nov 13, 17 @ 7:08 pm

  10. -The fact that some lawyers do these on contingency harms that argument.- Not true! Lawyers will only take cases on contingency when the property values are real high. If the lawyer knocks $100,000 or even $20,000 off the tax bill, getting 1/3 or 1/4 of that is worth it for the lawyer. If the lawyer is only going to save the client a $1,000 or even a few thousand, it just isn’t worth it to do it on a contingent fee for most lawyers.

    Comment by Johnny Justice Tuesday, Nov 14, 17 @ 12:15 am

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