Cook County issued its first tax rates under the constraint of the new property-tax cap Friday, and it produced good news for taxpayers: The cap reduced the collective revenue take of local governmental units by about $75 million, according to the county clerk’s office.
But for local government officials, the tax cap was bad news, ushering in a new era of tight budgets and service cuts. That has been the case in the five collar counties-DuPage, Lake, McHenry, Will and Kane-where tax caps have squeezed local government, especially schools, for the past four years.
The new tax rates issued Friday will establish what the county’s 1.5 million property-tax payers will owe this year. Difficulty in computing the tax rates and a huge backlog of assessment appeals resulted in the longest delay in issuing tax bills in the county’s history. Those bills will be mailed next week.
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The tax cap, passed by the General Assembly earlier this year, limits taxing bodies such as schools, park districts and small towns from increasing tax collections by more than 5 percent this year and possibly even less in years to come.
Chicago and other home-rule governments are exempt from the cap, although the city has imposed its own, voluntary 5 percent cap.
However, Chicago taxpayers are likely to see the largest increase in their tax bills because city property was just reassessed.
The Cook County cap is the expansion of a tax-limitation movement that began in DuPage County, where protesting taxpayers persuaded the legislature to impose a ceiling on tax collections in the collar counties in 1991.
Of the county’s more than 800 taxing districts, 241 got less than they asked for because of the new tax cap, according to the clerk’s office.
However, the $75 million reduction was only about 1.5 percent of the overall tax take by governmental units affected by the tax cap.
That’s a lower reduction than that experienced by the collar counties in 1991, but it is, nevertheless, a slowing of tax growth in the state’s largest county.
The Metropolitan Water Reclamation District, for instance, wanted to raise $340 million from property taxes this year. Because of the cap, it will get $327 million.
Ironically, the biggest reduction this year came from an unexpected source. For the first time in six years, the county’s multiplier-used to ensure that all property is assessed at the same level-actually declined.
According to the clerk’s office, which calculates the rates, 355 districts will collect a total of $88 million less because of a lower multiplier.
While taxpayers are pleased by the results of the tax cap, some government officials are not. Suburban school districts will feel the impact of the tax cap the most.
“We need to understand that tax caps don’t necessarily reduce taxes,” said Marilyn McConachie, school board member of Glenbrook Township High School District 225, which showed some of northern Cook County’s highest tax-rate increases. “I think the effect will be to reduce the quality of education in our schools.”
But thinking ahead, McConachie added, the district started putting itself on a “tax-cap diet”-expanding class sizes, consolidating language classes and delaying science lab renovations-so the real cap wouldn’t radically shock its schools, Glenbrook South and Glenbrook North.
The district will receive $49 million, $1.9 million less than it requested.
But school board President Irwin Lyons said school officials expected to collect less.
Some taxing bodies showed increases as a result of large capital projects undertaken before the tax cap took effect.
For example, Evanston/Skokie District 65 recently issued $35 million in bonds to renovate many of its 15 schools.
Even supporters of the cap concede that limits aren’t the solution.
“Even though caps have slowed (growth) down, it hasn’t removed the major problem,” said state Sen. Aldo DeAngelis (R-Olympia Fields), one of the chief proponents of tax caps. “And that is the inability of some people to continue to live in their homes because of the high amount of property taxes.”
Nonetheless, many have continued to cry foul.
Because of the pecularities of the system, taxing districts normally establish their budgets during the final months of a year even though the tax rates to fund them aren’t calculated until almost a year later.
And while many had anticipated they might be facing a cap, that didn’t become a reality until February, when Gov. Jim Edgar signed a law holding increases in tax collections to no more than 5 percent.
The ceiling drops further still next year when taxing districts will be capped at 2.7 percent, the rate of inflation.
Release of the rates Friday culminated what has been a strange year for the property-tax machinery in Cook County.
In any other year, the 1.5 million bills are issued in late July and are due around Labor Day.
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This year, they aren’t due until after Halloween.
In fact, the Nov. 3 due date marks the latest ever in Cook County. The record was set in 1981, when the final date for paying bills was Oct. 1.
After Nov. 3, a 1.5 percent-a-month penalty is imposed.
County officials have blamed the delays in part on the tax caps, which they said made calculating the rates more difficult.
But greater responsibility for the late bills probably lies with the near record number of assessment appeals filed this year. Most of those appeals came from property owners in Chicago.
The county’s Board of (tax) Appeals didn’t finish processing the 93,500 appeals until late August, about two months behind schedule.