The Tax Vortex

The latest round of assessments heralding property tax increases of as much as 50 percent are coming.

By Ben Joravsky
June 30, 2006

NOT EVEN 15 minutes into the workshop on property taxes, a man in the back of the room could contain himself no longer. “We cannot continue to pay at this rate,” he proclaimed, his voice cracking as he interrupted a local alderman’s opening remarks.

More than 300 north-siders were crammed into the June 20 meeting sponsored by Cook County assessor James Houlihan. “We need change,” a woman exclaimed. “Yoo-hoo? Is anyone listening?”

Taxpayer discontent has been brewing since April, when the assessor’s office began sending out new north-side property assessments for the next threeyear period. “The pitchforks are out, the peasants are restless,” cracked one state rep. “I sense a revolt.”

How much of a revolt may depend on the sophistication of the peasantry. Assessments on the north side are up as much as 50 percent. But an assessment alone won’t tell you what your property taxes are going to be. To figure that out you need to multiply your property’s assessed value by the “state equalizer” (a figure devised by the Illinois Department of Revenue to even out assessments across the state), then subtract next year’s home owner’s exemption of $4,500, then multiply that total by the tax rate. Using this year’s equalizer and tax rate (both vary annually), you can get at least a rough idea of what you’ll be asked to cough up next year.

For example, the assessable value of my north-side house rose from $44,500 in 2003 to $55,400 this year. Multiply that by the current state equalizer of 2.5757, subtract the home owner’s exemption, and multiply that by the tax rate of 6.28 percent, and it looks like I’ll be liable for $8,678 in property taxes, up $2,731—an increase of 46 percent—from this year. “Look at your income. Has it gone up 46 percent? I doubt it,” says state rep John Fritchey, whose north-side district covers parts of Lakeview Township. “It’s simple math—we have a tax that’s rising faster than our ability to pay it.”

As public policy this spells trouble. Our schools, parks, city, and county depend on taxes more and more people can’t afford to pay.

Even our elected officials are feeling the pinch. Based on the rise in his assessment, my alderman, Eugene Schulter, can expect to pay about $12,000 in taxes, up 74.5 percent. My congressman, Rahm Emanuel, will pay $16,000, up 71 percent, and Fritchey, my state rep, will pay about $20,000, up 44 percent. “My taxes were at $4,000 when I bought my home nine years ago,” Fritchey says. “That’s, what, a $16,000 increase in ten years? This isn’t some abstract, theoretical debate. This is real.”

Don’t blame Houlihan, says Fritchey: he’s just the messenger. (By the way, Houlihan figures to pay $28,000 in property taxes on his Lincoln Park home next year, up 48 percent.) Three years ago Houlihan helped convince the Illinois General Assembly to pass a so-called tax cap, which in fact was simply a temporary increase in the home owner’s exemption, from $4,500 to $20,000; it ends next year. In the spring he lobbied the assembly to pass a bill, sponsored by Fritchey, that would increase the exemption to $60,000 for the next three years. Had that bill passed, property taxes throughout the city would have gone down or stayed roughly the same. In my case, I’d be looking to pay around $4,800, a 19.4 percent decrease.

According to Fritchey, you could write a book on why the bill failed—the vote was confusing and inconsistent even by Springfield standards. Mayor Daley declared his support but didn’t lobby for it aggressively— he was out of the country on May 3, the day it came before the assembly. House speaker Michael Madigan voted for the bill but also failed to rally his troops behind it. Governor Blagojevich said he favored it, but one of his senate leaders, Carol Ronen—who represents Edgewater, which is getting clobbered by rising assessments— avoided taking a stand by voting present. (Ronen did not return my calls for comment.)

The bill was not without flaws. As even Fritchey admits, one of its major weaknesses was that it offered no relief for commercial or industrial property owners, who are also under siege from rising property taxes. Many business groups opposed it on the grounds that it would force commercial property taxes up.

But the most compelling reason the bill failed to pass is probably the most obvious one: Daley, Madigan, and Blagojevich can’t afford to cut off the stream of revenue from property taxes. Cut the property tax take and you’re going to have to either cut programs or replace it with some other kind of tax. “Nobody wants to make the first move,” says one state rep, “so nothing gets done.”

The house voted against the bill, the proposed $60,000 exemption vanished, and with the $20,000 exemption reverting to $4,500, there’s not much cushion against rising assessments, thus setting the stage for a taxpayers’ revolt. At last week’s workshop, speaker after speaker decried waste in government and vowed to vote incumbents out of office unless the system changes. “Where’s the tipping point? When is this going to stop?” one speaker bellowed. “I’m told my property went up 50 percent. But I haven’t got that money. I haven’t sold my property!”

On the stage 44th Ward alderman Tom Tunney, 32nd Ward alderman Ted Matlak, and 43rd Ward alderman Vi Daley nodded their heads in sympathy. “I’m with you—you want to keep fighting the system, it’s OK with me,” said Matlak, as though soaring property taxes were all about rising assessments and had nothing to with the fat budgets and tax increment financing districts the council has routinely approved all these years.

Fritchey says he’ll resurrect his bill to expand the home owner’s exemption during the assembly’s veto session in November. But the political calendar works against any form of systemic relief or change, as one of Houlihan’s aides pointed out to me near the end of the workshop. Taxpayers will be receiving their assessment notices, which roll out in stages—the northwest side’s up next—throughout the summer. But property owners won’t feel the bite until late next summer, when the county mails the first tax bills reflecting the new assessments. By then this fall’s gubernatorial and next February’s mayoral elections will be long over, the winners safely ensconced in office for another four years. Unless the public comes to understand the meaning of this summer’s assessment notices, there won’t be enough anger to force the mayor, governor, or house speaker to change the system.

“I wouldn’t wait for a miracle,” remarked Houlihan’s aide as he handed me a tax-appeal form. “I’d file your appeal now.”

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