Friday, May 10, 2013

Kadner: A factor in multiplying tax confusion

Last Modified: May 10, 2013 05:26PM
There may be someone who can explain how the property tax is calculated in Cook County, but chances are you wouldn’t want to talk to him.
The property tax is probably the chief gripe of people who live and own businesses in the suburbs. Nobody understands how it’s calculated, and tax bills keep going up.
In a news release this week, the Illinois Department of Revenue announced that it has determined that the 2012 final equalization factor for Cook County is 2.8056.
The equalization factor also is known as the “multiplier,” but as Shakespeare once said, “An apparently random number by any other name still stinks.”
Here’s the really important thing the revenue department wants you to know: “The equalization factor does not cause individual tax bills to go up.”
I find that humorous because everyone who gets paid for handling property tax stuff in Illinois seems to be in a hurry to say, “Don’t blame us for any of this.”
The Cook County treasurer collects property tax payments and mails out the bills but always emphasizes that she is not responsible for those ever-increasing tax bills.
The Cook County assessor may assess your property and determine its “fair market value,” but don’t blame him when your bill arrives in the mail.
In fact, he’s the guy who handles your property tax breaks. There’s the standard homeowner property tax exemption, a senior citizen exemption, a senior tax freeze exemption, a retiring veteran exemption, a disabled veteran exemption and a disabled person exemption.
Everybody who owns a home in Cook County gets a property tax break, so you’ve got to wonder why everyone is so unhappy.
There’s a hint at the core problem in that news release from the revenue department about the final calculation of the equalization factor/multiplier.
By law, all property in Illinois is supposed to be assessed at one-third of its value. But Cook County doesn’t do that.
It has a classification system that places separate value on vacant lots, residential property, apartments, commercial land and industrial property.
Homes, condominiums and apartment buildings of six units or less are assessed at 10 percent of market value, as are vacant lots. Apartment buildings of more than six units are assessed at 13 percent of their value.
Property owned by nonprofit corporations and commercial and industry properties are assessed at 25 percent.
And, oh yes, there’s another designation for commercial or industrial property being developed in economically deprived areas, usually assessed at 10 percent.
You may have noticed that none of these are assessed at one-third of their value, as required by the state.
In fact, all of these types of properties in Cook County combined were assessed at 11.9 percent of their value, according to the state revenue department, or about a third of what they should have been.
That’s why you have to multiply everything by 2.8056 in the county “to achieve uniform property assessment throughout the state.”
In other words, Cook County tries to cheat, so the state is forced to make sure there’s an even playing field.
All the average guy knows is that nothing makes sense to him. The fair market value of his home doesn’t seem to resemble the amount of money he could get if he put it up for sale.
And a guy in a similar house down the street may be paying a lot less in property tax.
Of course, there’s a solution for that. You can appeal your tax assessment to the Cook County Board of Review.
You don’t need a lawyer to do that, county officials will tell you, although somehow entire law firms seem to stay in business by getting lower assessments for their clients.
And if you don’t like the decision by the board of review, you can take your case to the Illinois Property Tax Appeals Board. That’s where large companies often cut millions of dollars off their tax assessments.
But here’s the thing that most people never seem to notice about this entire tax process. As the revenue department says in its news release, “local taxing bodies determine tax bills when they request the dollars needed to provide services to citizens.”
In other words, if a town or school district needs $1 million, it sets its tax levy on property owners within its boundaries that will raise $1 million.
Even if 5,000 of those homeowners have senior exemptions and 10,000 have homestead exemptions and ACME Gunpowder just got a $500,000 break on its tax appeal, the town or school district levy is $1 million.
Someone has to pay it.
By the way, in my list of public officials who want you to know they have nothing to do with the amount on your property tax bill, I forgot to mention state legislators.
They do not assess your property, set a levy or collect the tax payments. But in reality, the Legislature plays a huge role.
You see, even though the Illinois Constitution gives the state a mandate to finance the public schools, the state provides less than 30 percent of the money needed to support public education.
Most of the money for the public school system comes from the property tax — on average more than 60 percent of a homeowner’s tax bill goes to his local school districts.
Municipalities, which get a lot of money from the local sales tax, generally represent around 10 percent of your property tax bill.
If you have any questions about all of this, you could always go to a township assessor.
In Cook County, unlike the rest of the state, the township assessor does not assess anything. So, he or she is not responsible for your tax bill.
It does sometimes seem that the entire purpose of the Cook County property tax system is to create jobs for people who have nothing to do with the tax.

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