By Jeffrey Brown

As published by American Property Tax Update, January 2011

Our last Illinois quarterly up-date concluded with our speculation as to whether or not the extensive 2009 “level of assessment” reductions enacted by the Cook County Board for all properties located in Cook County and Chicago, Illinois, would flow through to any significant tax reductions on the actual 2009 tax bills. The statutory “level of assessment” reductions amounted to more than a 30% drop in the “levels of assessment” for commercial, industrial and larger apartment buildings located in Chicago and Cook County, Illinois. However, because the property tax bills in Illinois are issued and paid one year in arrears (i.e.; 2009 taxes payable in 2010) Cook County taxpayers were forced to wait until the issuance of the second installment 2009 tax bills to actually observe what impact, if any, the reduced levels of assessment would have on the dollar amounts of their actual tax bills.

The second installment 2009 Cook County tax bills (which contain the final tax amounts for the 2009 tax year) were just issued by the Cook County Treasurer’s Office with a final payment due date of December 13, 2010. Moreover, they are substantially higher than most Cook County taxpayers would have anticipated in light of the large “level of assessment” reductions enacted for 2009. What happened to cause the 2009 tax bills to rise so significantly when the “levels of assessment” had been so dramatically reduced?

First, in anticipation of what would have been an enormous revenue loss resulting from the adoption of the 30% level of assessment reductions directly into the 2009 tax bills, the Cook County Assessor’s Office, in the spring of 2009, began an unprecedented campaign to re-assess every property located in Cook County (including every property located in the City of Chicago) in a single year. Traditionally, because of its size and the sheer number of tax parcels it contains (well over 1.5 million) Cook County is divided into thirds for property tax assessment purposes with only 1/3 of the County being re-assessed in any given calendar year.

However, for 2009 the Cook County Assessor’s Office chose to re-assess every property located in Cook County. The Assessment Notices issued by the Assessor’s Office in connection with the “Re-assessment” appeared to have relatively modest “assessment” increases or decreases, but, in fact, contained very substantial increases to the underlying “fair cash values” or “fair market values” of the properties carried on the assessor’s books in an apparent effort to offset the large decline in the “levels of assessment.” The Assessor’s attempt to thwart the impact of the reduced “levels of assessment” by way of increasing the underlying fair market values of the properties essentially warped the Illinois constitutional and statutory requirements that properties be assessed for ad valorem tax purposes in Illinois based on their “fair cash value.” It also came at a most inopportune time for property owners, when the actual market values of their properties were already severely depressed as a result of the on-going economic recession.

The Cook County Board of Review was particularly helpful to Cook County taxpayers in rectifying to a certain extent the clear overstatement of fair market values initiated by the Cook County Assessor’s Office. Board of Review Commissioner Joseph Berrios, who was instrumental in spearheading this effort at the Cook County Board of Review, has now replaced the former Cook County Assessor and was recently elected to serve as the new Cook County Assessor.

 

Finally, the broad-based reductions to the “levels of assessment” do not necessarily translate directly into commensurate reductions on the individual property tax bills because the bills reflect the individual budgets and levies of the taxing districts which can vary dramatically from location to location and from tax bill to tax bill.