Despite substantially lower tax rates this year, most city homeowners will find tax bills at least 10 percent higher than last year`s in their mailboxes next week, according to Cook County tax rates released Friday.
And in some areas of the city hit with big reassessments, including Lakeview, Bucktown, Old Town and the West Side, bills could be more than 20 percent higher for homeowners and steeper for landlords and business owners, spelling trouble for renters.
The increases are mainly attributable to reassessments last year that pushed the total value of city property up by about 16 percent. But the Chicago public schools also played a role, getting a $175 million boost in a year when many other taxing bodies came much closer to holding the line on increases.
The general City of Chicago tax rate declined to $9.311 per $100 assessed valuation for 1991 from $9.964 in 1990. Taxes levied in 1991 are collected this year.
In the rest of Cook County, meanwhile, the south suburbs, strapped by relatively low property values, continued to show the highest tax rates in the county and the biggest percentage increases, up as much as 18 percent. And in the north suburbs, tax rate increases appeared to be moderate, with bills expected to be about 5 percent higher than last year`s in many towns.
Interestingly, that 5 percent average rise was lower than increases of 8 percent or more posted in many collar county towns, even though the collar counties are under a state-mandated tax cap that bars governmental bodies from increasing tax collections by more than the rate of inflation.
Glencoe, for instance, had a modest 3.96 percent tax rate increase, thanks in part to higher assessments in the city that helped reduce its share in the funding of countywide agencies.
Still, Peter Cummins, the village manager, criticized Cook County`s system of reassessments and determining tax bills as confusing and cumbersome. ”It`s really a riddle for most people to figure out,” he said. ”It`s complicated and pretty much amounts to a system that is a bait-and-switch game, with the taxpayer in the middle.”
Next year`s tax bills in the north and northwest suburbs are expected to jump sharply as those regions undergo triennial property reassessment.
The tax bill increases in all parts of Cook County came despite a $1,000 boost in the homeowners exemption, which rose to $4,500 this year, and a boost in the senior citizens exemption, which rose $500 to $2,500.
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Those increases proved to be a moderating influence on tax bills, along with mostly lower tax rates in the city. But they were more than offset by this year`s higher state equalizer, up 2.9 percent from last year`s, and higher assessments, which rose by 400 percent or more in some city
neighborhoods. Big assessment increases largely resulted from the gentrification of neighborhoods, producing soaring market values.
The news is particularly bad for landlords and their renters, who do not benefit from the exemptions.
Ferd Isserman, for instance, saw the assessed value of the Old Town four- flats he owns go up 700 percent from last year`s assessment. That increase, he said, will have to be passed on to his tenants, but he is not quite sure how. ”You can`t say to these people, `Hey, because of a 700 percent increase in taxes, we`re going to have to triple your rent,` ” he said. ”. . . The whole thing is crazy.”
Experts predicted that such huge increases in assessments and the larger tax bills they bring could put pressure on landlords not to maintain their properties, accelerating the decline of neighborhoods now on the edge.
”It`s going to hurt all of us,” said Lorraine Hoffman, president of the Lakeview Citizens Council. ”In the end it`s going to be detrimental to the neighborhoods where the majority of people rent.”
Homeowners also called the higher bills a real blow, predicting that they may drive some of them out of town.
”We`re thinking now of moving,” said Joy Malnar, whose two-flat in Andersonville has undergone a 185 percent increase in assessed value since she bought it six years ago. ”If it keeps going up like this, we`re not going to have any other choice.”
”They don`t factor in things like the recession,” complained Jim Bolduc, city coordinator for the Alliance of County Taxpayers. ”It`s just one big cauldron in which everybody is cooked.”
Each year, tax rates in Cook County are determined by spreading the amount of dollars requested by each taxing body over the assessed valuation in the district. If assessed value is low, the tax rate must be high to produce enough revenue. And if assessed value is high, the tax rate can be low.
As a result, ”It`s important for tax rates to go down when assessments go up,” said Andrea Raila, a Lakeview property-tax consultant. ”That`s normal.”
But this year, she said, although city tax rates went down for the most part, ”they haven`t gone down sufficiently to soften the assessment blow.”
For instance, the tax rate for the Metropolitan Water Reclamation District dropped by 8.2 percent this year. Because of greater assessed values in the city, the district will get about the same amount of money as it did last year.
But, under the same rules, the Chicago Board of Education will get $175 million more this year than last, though it dropped its tax rate by 0.57 percent.
Most other city districts held the line better, allowing only modest increases in their budgets. And the Cook County Forest Preserve District dropped its tax rate 20 percent, cutting its budget by $5.7 million.
Last year was the first time the entire city was reassessed at once, a change from previous years when half was done one year and half the next.
That boost in work-670,000 properties reassessed in all, and a record 70,941 appeals handled-accounts in part of the delay in putting out the tax bills, which are the latest this year since 1981. The bills were being mailed beginning Friday and are due by Sept. 25.
Tax rates in the south suburbs painted a stark portrait of how the poorest areas often are hit hardest by property taxes. Strapped by relatively low property values compared with other parts of the county, the south suburbs showed both the highest tax rates and the largest percentage increase-as much as 18 percent.
The county`s poorest suburbs were clustered at the top of the list of high tax rates, requiring residents there to pay the largest proportion of taxes relative to the value of their homes just for basic services.
For instance, residents of Ford Heights-which has the lowest yearly per capita income ($4,660) in the Chicago metropolitan area-are paying the highest actual tax rate.
Ford Heights homeowners will be taxed at a rate of a little more than $18 per $100 of assessed valuation. That is nearly double the typical Cook County property-tax rate, which hovers around $10 per $100 assessed valuation.
Other low-income south suburbs with high rates include parts of Harvey and Chicago Heights at nearly $17 per $100 of assessed valuation; Markham, about $16; and Robbins, Dixmoor, Phoenix and Posen, in the range of $14.
Posen, in fact, had the highest percentage increase, at 18 percent.
”The bottom line here is that communities with stagnant assessed valuations have to jack up the rates to keep up with the costs of
government,” said Paul Green, director of the Institute for Public Policy at Governors State University in south suburban University Park.
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Green blamed the low or declining south suburban valuations primarily on the loss of manufacturing in the area in the 1960s. Consequently, the tax burden on residential property has increased. And when home values are low, the ratio of taxes compared with assessment levels is highest.
As in most other areas, school districts in the south suburbs provided the biggest reason for tax increases. However, because school district overlap communities, residents in the same town living across the street from each other could pay dramatically different rates.
For instance, Glenwood residents in School District 167 will see their rates go down by nearly 2 percent, while Glenwood residents in Elementary School District 153 and High School District 233 will see an overall increase of more than 14 percent.