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Property Taxes Going Up
By Bethany Pozzi-Johnson
Property taxes are on the rise. A third of Cook County is reassessed every year, and this year is Chicago's turn. Every building, be it residential, commercial or industrial, is reassessed at "fair market value" before the tax bills go out.
"Taxes are up in the city for two reasons: the decrease in industrial properties and the increasing value of real estate," said property tax consultant Herb Rosenbaum, senior partner at Schoenberg, Fisher, Newman and Rosenberg, Ltd. (SFN&R).
He added that residential properties are bearing a higher amount of the total tax in comparison with industrial and commercial properties three years ago and that, while industry has decreased, Cook County Tax Assessor James Houlihan "has also been reducing the percentage of taxes that commercial property owners pay."
Property tax consultant Andrea Raila of Raila and Associates countered that "commercial and industrial
properties are paying more than their fair share," despite the latest changes.
Here in Cook County taxes are levied differently than in the rest of the State of Illinois. Residential owners are responsible for 16%, and commercial 38%, of the total tax burden. The responsibility is equally at 33% outside of Cook County.
Raila believes the problem of rising Cook County taxes exists because "Homes are certainly appreciating rapidly but the key is there is no legislation…that caps real estate appreciation rates and assessments."
The Illinois General Assembly currently is considering a cap of 7% on the rate in which property can be taxed in Cook County. Others blame the City's tax increment financing (TIF) system. The original idea of a TIF was to waive taxes for a certain period in blighted areas to give developers an incentive to build there and eventually put properties that had been off the tax rolls back on it.
TIFs have proven to be such a treasure trove for developers, however, that they have pressured City officials to create TIFs just about anywhere in the City. The tax revenues not being collected in TIF areas have to be made up somewhere else, hence rising property taxes throughout the City.
To help yourself with this year's taxation, appealing to the County Assessor might make a difference.Not all claims are accepted, however. If you suspect you have been inaccurately assessed, firms like Raila's and SFN&R can help with the appeals process. Even if your house was assessed at a fair market value lower than what you think it was worth, there still may be hope for you. Properties that
have been assessed inequitably, when compared with similar properties in your neighborhood, have the best chance of getting their property taxes lowered.
Rosenbaum advises people to "first look at the fair market value of neighboring houses and compare with fair market value given to your house to see if you are uniformly assessed within your neighborhood." The Constitution of Illinois states, "all neighborhoods must be uniformly assessed."
Uniformity is such an important issue that 98% of cases his firm works with are based on uniformity and not on value.
Many homeowners are seeing a tax spike of up to double what they had been paying, so they are appealing the decision based on inability to pay their taxes, not on whether they were taxed inequitably.
"This is placing a huge burden on the tax appeal system," said Raila. Last year, 173,000 tax appeals were filed in Cook County, compared to 37,000 in New York City and just 14,000 in Los Angeles.
State Representative Ken Dunkin of the 5th District is looking for lasting solutions to the problem. "I'm going to support a measure that's going to change the system of how we assess the value of properties, because what's happening is that when we put a tax cap in the city, another part picks up the difference. It's a ‘balloon effect.'
When a cap is put on one neighborhood, the next neighborhood's taxes increase that much more" because the total taxes demanded by the cost of running the State remains the same.
Dunkin seeks a "more comprehensive or complete way to assess valuation" than what is currently available. While he originally supported the old State tax cap, which aided only certain types of properties, he now considers it a mere "Band-Aid" and not a solution.
Dunkin regrets people are being forced to leave their communities when their taxes increase at a rate they cannot afford. He believes everybody should be given a chance to stay in the community.
"I'm going to work with experts to find a [long-term] solution," he said.
State Assessor Houlihan's solution is extending the old tax cap to limit tax increases. Illinois Senate Bill 1498, which is called the Neighborhood Preservation Homeowner Exemption, would limit property tax increases to 7% yearly for all homeowners.
Raila advises all homeowners to participate in this effort by signing the petitions currently circulating to cap taxes at 7% per year. Raila also advocates permanent change, as Illinois has had no comprehensive tax reform legislation for 40 years. The option for a constitutional convention will be put on the ballot in 2008 for permanentconstitutional tax reform.
If enough people support the idea, 118 people will be chosen to participate in the convention. To determine whether your property tax assessment can be appealed, log on to www.cookcountyassessor.com or call (312) 443-7550 or contact Raila at www.araila.com or (312) 587-9494 for explanations, tips, and workshops. The law firm of Schoenberg, Fisher, Newman and Rosenberg, Ltd. can be reached at (312) 648-2300.
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