Increases in Cook County Residential Property Tax Bills Due in Large Part to Tax Burden Shift

December 15, 2010

By Ares G. Dalianis and Scott R. Metcalf

The 2009 Cook County second installment property tax bills that were due earlier this week contained increases that came as a shock to many homeowners. As a result, many school district officials have been asked to explain the increases. While the exact causes of higher tax bills will vary from property to property, the final results of the 2009 reassessment indicate that, in the aggregate, residential property increased as a percentage of the overall assessment base, which translates to a larger percentage of the overall tax burden falling on residential property owners.

The latest information on the 2009 reassessment indicates that while the total assessed value for Class 2 (Residential) property declined, the assessed value of Class 5 (commercial/industrial) property declined more. The result is that the tax base was comprised of a higher percentage of residential property value in 2009 than in 2008. The Final Assessment Abstracts for the 2008 and 2009 tax years, obtained from the Cook County Assessor’s Office, indicate that residential properties' share of the assessment base increased in all areas of the County.

COUNTYWIDE
2008			2009
	AV	% Tax Base		AV	% Tax Base
Class 1 - All	853,313,625	1.2%	Class 1 - All	565,782,355	0.9%
Class 2 - All	45,036,821,173	62.2%	Class 2 - All	41,962,772,641	64.5%
Class 3 - All	2,328,329,683	3.2%	Class 3 - All	2,466,526,923	3.8%
Class 4 - All	223,734,218	0.3%	Class 4 - All	194,682,407	0.3%
Class 5 - All	23,468,201,153	32.4%	Class 5 - All	19,344,148,226	29.8%
Class 6 - All	310,897,397	0.4%	Class 6 - All	241,663,015	0.4%
Class 7 - All	28,473,840	0.0%	Class 7 - All	40,772,027	0.1%
Class 8 - All	29,113,067	0.0%	Class 8 - All	32,141,954	0.0%
Class 9 - All	178,514,326	0.2%	Class 9 - All	167,543,440	0.3%

Total	72,457,398,482	100.0%	Total	65,016,032,988	100.0%

SOUTH TRIAD
2008			2009
	AV	% Tax Base		AV	% Tax Base
Class 1 - All	256,727,292	1.7%	Class 1 - All	139,823,801	1.1%
Class 2 - All	10,080,895,857	68.1%	Class 2 - All	9,369,495,275	72.0%
Class 3 - All	283,124,556	1.9%	Class 3 - All	254,928,244	2.0%
Class 4 - All	40,475,665	0.3%	Class 4 - All	35,589,380	0.3%
Class 5 - All	3,951,267,476	26.7%	Class 5 - All	3,066,221,489	23.6%
Class 6 - All	115,236,840	0.8%	Class 6 - All	89,615,956	0.7%
Class 7 - All	916,856	0.0%	Class 7 - All	677,482	0.0%
Class 8 - All	29,113,067	0.2%	Class 8 - All	32,141,954	0.2%
Class 9 - All	34,696,254	0.2%	Class 9 - All	28,898,094	0.2%

Total	14,792,453,863	100.0%	Total	13,017,391,675	100.0%

NORTH TRIAD
2008			2009
	AV	% Tax Base		AV	% Tax Base
Class 1 - All	212,676,731	0.9%	Class 1 - All	120,757,902	0.6%
Class 2 - All	15,616,351,765	66.0%	Class 2 - All	14,281,296,304	69.5%
Class 3 - All	442,436,551	1.9%	Class 3 - All	398,750,371	1.9%
Class 4 - All	90,882,903	0.4%	Class 4 - All	80,023,797	0.4%
Class 5 - All	7,157,396,848	30.2%	Class 5 - All	5,557,682,869	27.0%
Class 6 - All	137,994,951	0.6%	Class 6 - All	111,390,787	0.5%
Class 7 - All	241,120	0.0%	Class 7 - All	398,017	0.0%
Class 8 - All		0.0%	Class 8 - All		0.0%
Class 9 - All	11,845,913	0.1%	Class 9 - All	10,903,696	0.1%

Total	23,669,826,782	100.0%	Total	20,561,203,743	100.0%

CITY TRIAD
2008			2009
	AV	% Tax Base		AV	% Tax Base
Class 1 - All	383,909,602	1.1%	Class 1 - All	305,200,662	1.0%
Class 2 - All	19,339,573,551	56.9%	Class 2 - All	18,311,981,062	58.2%
Class 3 - All	1,602,768,576	4.7%	Class 3 - All	1,812,850,308	5.8%
Class 4 - All	92,375,650	0.3%	Class 4 - All	79,069,230	0.3%
Class 5 - All	12,359,536,829	36.4%	Class 5 - All	10,720,243,858	34.1%
Class 6 - All	57,665,606	0.2%	Class 6 - All	40,656,272	0.1%
Class 7 - All	27,315,864	0.1%	Class 7 - All	39,696,528	0.1%
Class 8 - All		0.0%	Class 8 - All		0.0%
Class 9 - All	131,972,159	0.4%	Class 9 - All	127,741,650	0.4%

Total	33,995,117,837	100.0%	Total	31,437,439,570	100.0%

Source: Cook County Assessor’s Office, Final Abstract of 2008 Assessment and Final Abstract of 2009 Assessment

The most likely explanation for this shift in the composition of the assessment base is the implementation of new levels of assessment for the various classes of property during the 2009 assessment year and the subsequent appeals filed at the Cook County Board of Review. In 2008, the Cook County Board of Commissioners amended the County’s Real Property Assessment Classification Ordinance to revise all assessment levels to either 10% or 25% of fair market value. The following changes were implemented for the 2009 assessment year:

Class	Property Type	New Level of Assessment (%)	Old Level of Assessment (%)
1	Vacant Land	10	22
2	Residential	10	16
3	Apartments	16 (2009) 13 (2010) 10 (2011)	20
4	Non-Profit	25	30
5A	Commercial	25	38
5B	Industrial	25	36
Incentives	Various	10	16

Additionally, the Cook County Board of Review initiated “Restoration Appeals” in order to allow property owners to make their case for consistent market values after the new levels of assessment were implemented. These appeals were filed by many commercial and industrial property owners to obtain the benefit of the reduced assessment levels.

It is important to note that changes in the composition of the assessment base are beyond the control of school districts. School districts have control only over their levies, which were limited by the Property Tax Extension Limitation Law (PTELL) to an increase of only 0.1% for 2009. Thus, it is the assessment and assessment review processes that determine who pays how much of those levies.

More Information

Ares G. Dalianis
agd@franczek.com
312.786.6163
Scott R. Metcalf
srm@franczek.com
312.786.6104