Real estate tax bills are in the mail this week to Cook County property owners, so as a public service we`ll answer some common questions about our complex ad valorem tax system.
More Top Picks Vestibular Migraine Symptoms And How Its Diagnosed
Residents of outlying counties also should read this. You`ll want to know what you`re missing. It may persuade you to stay put.
Q-When do we get this year`s tax bill?
A-Next year. The bills out this week are for last year`s taxes.
Q-Why are the bills a year behind?
A-Because once, in the Great Depression, some politicians decided to push collections off a year to give folks more time to pay.
Q-So how do local governments get the cash to pay current bills?
A-A lot of them sell tax anticipation notes to investors.
Q-But doesn`t that cost taxpayers extra money for interest payments?
A-Yes. It costs Chicago more than $10 million a year to borrow funds because of the lag.
Q-Why don`t they collect taxes on a current basis so they don`t have to borrow?
A-Because they`re politicians. They`d have to collect double one year to get back on schedule. It`ll never happen.
Q-I got my reassessment notice earlier this year, and it looked like I caught a big break. I know I can sell my house for half again what the assessor calls my market value. Was I just lucky?
A-No, just naive. When the Cook County clerk computes your tax bill, he`ll more than double your assessment by applying the state-assigned
”multiplier.”
Q-Isn`t that misleading? Here I think I`m getting a great deal from Tom Hynes, the assessor, and the state turns around and doubles his figure. Which number is closer to the truth?
A-Depends who you ask. Hynes has said the state over-corrects his numbers when they ”equalize” his assessments to the 33 1/3 percent of market value required by state law. He says you can`t rely totally on reports of sales prices, as the state does, because they include things such as seller-financing charges that have nothing to do with the value of the property itself.
Q-What does the state say?
A-For the record, not much. Privately they hint that Hynes lowballs assessments so everybody will think he`s their best friend come election day. The guy who takes the heat is county collector Ed Rosewell. It`s his name on the bills, not Hynes`.
Q-Still, it seems goofy that they tax my property at double the value listed on my assessment notice. Is it all just politics?
A-No, it`s mostly structural. Cook assessments are low primarily because of the county`s unique classification system and because property is reassessed only once every three years.
Q-What`s the classification system?
A-In the early `70s, the original Mayor Daley engineered an amendment to the new state constitution that allows Cook County to assess homes and small apartment buildings at 16 percent of market value. But to make overall levels hit the state-mandated 33 1/3 percent, assessments on industrial and commercial property were jacked to 40 percent (later eased to 36 and 38.)
Q-So as a homeowner I finally get a break?
A-Not really. Cook`s commercial and industrial base never grew enough to offset the break Hizzoner handed voters, er, homeowners. So the state has to raise assessments on all classes for the overall valuation to hit 33 1/3 percent. Bungalow beaters like you get equalized to about 21 percent of true market value.
More Top Picks Best Steel Toe Boots For Men Lightweight
Q-Well, I`d rather be at 16 percent, but at least I`m not getting assessed at 33 1/3 like those suckers out in Du Page and Lake Counties. How do they put up with it?
A-They`re better off in the long run. Under Cook`s classification system, equalized assessments on commercial and industrial properties have run well above 50 percent of market value. So a lot of companies have fled to the collar counties, where all non-farm property is at 33 1/3 percent.
Q-So what? That`s less traffic and chimney smoke here in Cook.
A-But out there the tax base is growing by leaps and bounds, while yours is barely keeping up with inflation. That means their local governments can hold the line on, or lower, tax rates and collect significantly more each year for their first-class schools, parks and police departments.
Q-But I always thought taxes were a bargain in the city.
A-They were. But you haven`t checked lately. The city`s combined tax rate, released Friday, is $9.31 per $100 of equalized assessed valuation. In Lombard, it`s $7.50. The average for Du Page is $6.91. So even with your assessment break, you`d probably pay less if your house were in Lombard.
Q-But who wants to live in Lombard?
A-My parents. Next question.