The Property Tax Merry-Go-Round

<div class="body"><p>It’s no surprise that taxpayers’ heads are spinning after receiving their tax bills. The Cook County property tax system falls under the jurisdiction of three separate departments headed by elected county officials. These departments must ?try to coordinate with one another to manage requests from 497 different taxing districts in a process that takes almost 2 years to complete.</p><p>With so many moving parts it’s nearly impossible for an ordinary taxpayer to differentiate the roles of each department and equally impossible for taxpayers to determine where to raise their concerns. The complex nature of the taxing system also allows politicians to exploit the system. Yet, as politicians continue to claim that they seek to make the system more transparent, the tax burden on citizens continues to get worse. The following is a quick guide to understanding how your tax bill is developed.</p><p>There are 6 steps in the property tax cycle: the first three determine the allocation of the tax burden amount to property owners, the last three determine the total amount of property tax to be allocated to the property owners through services. The beginning and later steps run concurrently.</p><p><b>STEP 1: ASSESSMENT</b></p><p>This first—and most misunderstood—step is the yearly mailing of notices to property owners indicating the value of the property. The Assessor’s office, soon to be headed by Fritz Kaegi, determines the “fair share” of the total burden in a taxing district by assigning value for each property. The assessor does NOT determine the amount of your tax bill.</p><p>The Assessor’s office is essentially a mass appraiser for all the property in the County. Cook County is the second-most populous county in the US, where the assessor appraises one-third of the 1.8 million parcels of land once every year in the triennial.</p><p>Unlike other counties where an assessor actually visits and views properties for changes and property conditions, The Cook County Assessor employs a computer-assisted mass appraisal technique that uses three to five years of sales data to value residential properties. Because of the impersonal nature of the mass appraisal technique, inequitable assessments are inevitable.</p><p><b>STEP 2: REVIEW</b></p><p>This is the homeowner’s opportunity to dispute their assessed value or “fair share” of the tax burden. The most common and successful complaint is the argument of lack of uniformity as compared to other properties in a given neighborhood. Others include over-valuation and property description errors.</p><p>There are two main opportunities to review and contest the assessed value. The first is at the township, which begins when the assessment notices are mailed and ends 30 days later. The second is at the Cook County Board of Review which typically takes place 5-6 months after the township review.</p><p><b>STEP 3: EQUALIZATION</b></p><p>Illinois law requires that all property in a given county must be assessed at 33 1/3% of the market value. Since Cook County ONLY assesses residential property at 10%, this multiplier is applied to compensate for the special classifications and for other valuations abnormalities. This is not something a taxpayer can fight per se.</p><p><b>STEP 4: LEVY</b></p><p>A levy is the amount of money a taxing district requests from taxpayers. Most Cook County taxing districts submit their annual levy to the Cook County Clerk by the last Tuesday in December.</p><p>Districts must follow the Truth in Taxation Law requiring public notice and a hearing if the proposed levy increases by more than 5.0% from the previous year’s extension. There were roughly 500 taxing districts requesting money from Cook County taxpayers in 2019.</p><p><b>STEP FIVE: EXTENSION</b></p><p>Extension is the act of creating and applying the tax rates. This duty falls to the Cook County Clerk’s office, which is led by David Orr. Orr happens to be the longest serving elected official in Cook County.</p><p>Tax Rates are computed by dividing a taxing districts levy by the total EAV (taxable amount) of all parcels of property in the taxing districts. There is an inverse relationship between the tax base and the tax rate. Example: When the tax base (EAV) decreases, the tax rate will increase; even if the tax levy doesn’t change.</p><p><b>STEP SIX: COLLECTION AND DISTRIBUTION</b></p><p>The county treasurer, headed by Maria Pappas, prepares property tax bills, receives payments and distributes taxes to the local government.</p><p>The Treasurer also conducts the sales of tax liens for nonpayment. The tax liens are structured as a reverse auction in which the starting bid willing to purchase the lien is 18% of the tax due, then gradually decreases until a winning bidder purchases the lien. In the past, delinquent bills had a grace period of 12 months before being held at auction by the Treasurer, this year delinquent payments had only an 8-month grace period.</p></div>