Double-digit property tax increases in city, Cook County suburbs/Whose property taxes went up most in Chicago?/

Double-digit property tax increases in city, Cook County suburbs
By Bob Secter
Copyright © 2009, Chicago Tribune
6:17 a.m. CDT, October 27, 2009
http://www.chicagotribune.com/news/local/chi-property-tax-27-oct27,0,3685132.story


Most Cook County residents are in for another round of sticker shock when new property tax bills arrive in the mail in a few days, with the median increase in many suburbs topping 10 percent and, in a handful, 20 percent.

Median increases in many city neighborhoods will also hit double digits, with some lower income areas seeing the highest percentage spike. The median rise in the West Garfield Park neighborhood will top 46 percent, according to figures provided to the Tribune by Cook County Assessor James Houlihan.

In all, four out of five homeowners in the city and northern suburbs will get higher bills than last year, In the south suburbs, 64 percent of homeowners will see bigger bills, yet the median tax bills in several south Cook communities will actually decline year over year.

In Chicago, the median hike in residential bills will be about 3 percent, although the median increase in many neighborhoods will be shoot significantly higher than that, a Houlihan spokesman explained.

As with any event involving property taxes, the size of bills and increases can vary dramatically from house to house, block to block and neighborhood to neighborhood. The median tax hike in any community is the middle point of all increases, with about half of homeowners facing higher hikes than the median and half facing less.

Figures provided by Houlihan illustrate how the upward march of property tax bills appears to have largely defied the housing-market crash as well as the steepest economic swoon since the Great Depression.

"This is just a terrible time for this to happen," Houlihan said. "People are really pressed and their bills are going to go up."

Some of the sharpest increases will be felt not by residents in trendy North Shore villages but rather in middle-class communities near O'Hare International Airport. In Franklin Park, the median hike in tax bills payable in 2009 will soar by 20 percent over last year, according to the assessor. In neighboring Schiller Park, the median increase will nudge 18 percent.

In the city, the median increase in the trendy Lincoln Park neighborhood is a modest 3 percent and in the North Side Lakeview neighborhood it will be even less, 2.1 percent. On the flip side, however, the median increase in the Englewood neighborhood on the South Side nears 25 percent. The median rise in President Obama's Kenwood neighborhood is 9 percent.

Though most bills will be up, regional variations reflect not only the health of local housing markets but also idiosyncrasies of the tax system in the county, where properties get reassessed on a rolling basis every three years and may not fully capture recent declines in property values.

Another contributing factor is the phasing out of a state-authorized program implemented earlier this decade to soften the tax blow of then-soaring home values. North suburbs received those benefits before south suburbs, so now north suburbs are feeling the pain of the phaseout earlier as well.

That helps account for contrasts like these: In Elmwood Park, part of the county's northern assessment zone, the median increase is more than 12 percent over last year, and in Skokie it is near 13 percent.

Meanwhile, in south suburban Alsip, median bills will be up just 2.8 percent, in La Grange Park 2.5 percent and in Evergreen Park 1 percent. In Chicago Heights, median bills are slated to dip 3.1 percent.

Then consider the situation in Northlake, which straddles the dividing line between the north and south assessment zones. In the part of the town north of North Avenue, the median assessment is up 20.9 percent. But south of North Avenue, the median increase is 8.7 percent.

Houlihan, a 12-year veteran at the assessor's post who is not seeking re-election, blamed the assessment spikes on lawmakers in Springfield, who in 2004 imposed caps on runaway tax assessments during the real estate boom but then three years later voted to gradually do away with the protections.

Foes of caps argued that they served to shift a heavier property tax burden onto owners of industrial and commercial property and would drive away business from the county if made permanent.

Assessment data showed residential properties now make up more than 62 percent of the value of taxable properties in the county, up from 48 percent a decade ago. Over the same period, the share borne by commercial and industrial property has dropped from about 42 percent to 32 percent.

The assessment caps are really an expanded homeowners exemption that tries to limit the annual growth in a home's value for tax purposes. In the three-year phaseout plan, up to $33,000 in such growth can be protected the first year, only $26,000 the second year and $20,000 in the third and final year.

Because of the staggered way the county is reassessed, tax bills to south suburban homeowners now reflect year one of the phaseout process, the north suburbs are in year two, and the city is in year three. Tax bills come due in semi-annual installments, and the second -- the one now headed your way -- incorporates all the changes from the prior year.

Assessor's data showed that the median assessment exemption in many northern suburbs currently sits at the allowable second-year cap of $26,000. That may portend even bigger bills for many homeowners next year, when the exemption declines to $20,000.

At the same time, the median assessment in many southern suburbs is well below not only this year's exemption for that region, but next year's reduced exemption as well.

Houlihan contended that the sharp increases about to jolt homeowners in many communities were not only predictable, but largely avoidable if the legislature left caps in place.

Two years ago, he had vigorously fought the repeal of the caps, arguing that it would result in sharply higher tax bills as caps were first lowered, then removed entirely. What couldn't be foreseen at the time was that the process would coincide with a steep recession, leading to the hard-to-grasp phenomenon of rising tax bills while property values plummeted.

bsecter@tribune.com




Whose property taxes went up most in Chicago? Property tax bills coming out this week jump as '7%' cap is gradually lifted
BY ABDON M. PALLASCH apallasch@suntimes.com
Copyright by The Chicago Sun-Times
October 27, 2009
http://www.suntimes.com/business/currency/1848022,CST-NWS-tax27.article

Four out of five Chicago homeowners will see their property taxes go up when they get their bills later this week, Cook County Assessor Jim Houlihan said Monday.

In the West Garfield Park neighborhood, the median tax bill will jump 46.4 percent, the highest spike in the city, according to the numbers compiled by Houlihan's office.

"I think it's outrageous. It doesn't seem fair," said Latonya Nelson, 39, who rehabbed a 100-year-old graystone opposite the park with her husband. "Especially with the economy being the way it is."

The main reason for the higher tax bills is the phaseout of the "7 percent" cap on property tax increases, Houlihan said.

Houlihan's controversial effort -- backed by Mayor Daley -- used a complicated math formula to shield homeowners in gentrifying neighborhoods from sudden steep property tax hikes. The formula shielded the first $40,000 of home value from tax hikes and aimed to prevent homeowners' bills from going up more than 7 percent a year.

Lobbies representing businesses and owners of commercial and apartment properties complained the program shifted some tax burden to them. House Speaker Mike Madigan remained a skeptic of the bill and two years ago he pushed through a staggered phaseout. So last year, the first $33,000 of city home values was protected. This year, that number drops to $20,000. That's why the bills will be higher, Houlihan said.

"This is a direct result of Speaker Madigan's phaseout of the 7 percent homeowner exemption," Houlihan said. "This is the one thing that worked. For the first three years, when it was really going, it protected homeowners. I met with the mayor and urged him to go to Springfield and try to reverse that. The budget indicates how serious the problem is: The mayor has $35 million to deal with that."

Mayor Daley's budget released last week included a pot of money to give $200 each in property tax relief to homeowners hard-hit by the phaseout. Daley is expected to talk about property taxes today, but it is unclear whether he will back an effort to revive the 7 percent program still unpopular with Madigan and business owners.

At the time he argued for a phaseout of the program two years ago, Madigan pointed to one study that argued the program's benefits were exaggerated.

Critics said the plan mainly benefitted yuppies. But Houlihan points to the accompanying chart as proof the West, Southwest and Northwest sides were the main beneficiaries and will now be hit the hardest by the phaseout.

The staggered phaseout of the program hits the city hardest and earliest, Houlihan said.

The amount of property value protected from tax hikes in north suburban properties drops from $33,000 to $26,000 this year, so tax bills will go up there too, but not by as steep a rate as in the city, said Houlihan spokesman Eric Herman.

In the south suburbs, where median home values are going down, the first $33,000 of home values are still protected from taxation, so homeowners there in general will not be hit as hard, he said.

Treasurer Maria Pappas expects to mail Cook County tax bills Wednesday, so they could be landing in homeowners' mailboxes as early as Thursday.

"They're trying to build the neighborhood back up, but if property taxes are going to go up 46 percent, a lot of the older folks aren't going to be able to pay that," said West Garfield Park's Matt O'Brien, 52, who works as a Dominick's grocery store cashier.

"The problem is, we're going to get taxed out of our properties," said his neighbor Kate Lane. "'Cause this is the best part of town. We've got the Eisenhower ... the Congress 'L,' the Douglas 'L,' we're getting taxed out for the rich folks and we poor folks are going to have to find somewhere to go."





City property tax: Blame game kicks off as bills leap - Daley lashes out at assessor, whose aide faults General Assembly
By Bob Secter and Hal Dardick
Copyright © 2009, Chicago Tribune
October 28, 2009
http://www.chicagotribune.com/news/chi-daley-property-taxes-28-oct28,0,2872323.story


Mayor Richard Daley on Tuesday tried to offer up a scapegoat for the puzzle of why property tax bills are soaring as home values are plummeting: Cook County Assessor James Houlihan.

As he promoted a modest city tax relief program, Daley also lashed out at the assessor, accusing him of not doing his part to keep a lid on tax bills expected to arrive in mailboxes the next few days.

"The thing I can't understand (is) this whole assessment deal," the mayor said. "Now, no one's value is going up in the city. ... I'm asking him how he does it."

Despite the attack, Daley didn't make clear how the assessor could have acted legally to alter the trajectory of the latest round of bills. The mayor also did not mention that new bills to Chicago residents reflect a $65 million City Hall property tax increase passed two years ago but that's only showing up now. Houlihan spokesman Eric Herman blamed big hikes largely on the General Assembly's decision to phase out a program designed to soften the effect on taxes of soaring property values earlier this decade. "This idea somehow that we're going around jacking up everybody's assessments is just fiction," Herman said.

The finger-pointing took place after Houlihan released new data showing that homeowners across much of the city and county can expect to be hard hit by the latest installment of tax bills.

In many northern suburbs and city neighborhoods, median percentage increases over last year will be in the double digits. Some lower-income areas in the city will experience some of the highest percentage spikes. Hardest hit is West Garfield Park, where the median increase of tax bills will top 46 percent.

How could a neighborhood ravaged by foreclosures during the last year be slapped with such an astounding hike? One big reason is an idiosyncratic tax system where assessments and tax bills lag far behind real time. The latest round of bills actually reflects 2008 taxes. For city neighborhoods, those bills were calculated using assessment values from 2006. That was in the middle of the real estate boom, when investors were sweeping into West Garfield Park, snapping up boarded-up homes and putting them on the market almost immediately. Buyers eager to capitalize on the city's next hot spot then bid up home prices and renovated or sold them again. Home values soared.

The bubble burst last year, too late to be factored into the tax bills that West Garfield Park homeowners have to pay this year. "We are legally prohibited from using current market conditions to go back and change assessments for a previous year," Herman said.

The West Garfield Park situation is a worst-case scenario, but taxpayers in many communities around the county now find themselves facing similar quandaries.

On Tuesday, the mayor also called on state lawmakers to reinvigorate the program of so-called assessment caps, which are gradually being eliminated. Daley said failure to renew the program is another factor in higher tax bills, and many tax experts agree. Houlihan, who is not seeking re-election, also has lobbied to extend the tax breaks.

With complaints coming as tax bills arrive, Daley is pushing tax breaks of up to $200 for city homeowners to be paid for out of parking meter lease proceeds.

Tribune reporter Azam Ahmed contributed.

bsecter@tribune.com

hdardick@tribune.com