Aldermen say property tax bills reflecting 10% tax hike necessary

by Agnes Connolly

The second installment of property tax bills that are due Aug. 1 and feature a 10 percent tax increase in Chicago are necessary, according to representatives for some local aldermen.

In a report released in June, Cook County Clerk David Orr said that the increase comes from the need to pay fire, police and teacher pensions. For police and firefighter pensions, the increase is part of a $543 million tax increase passed by aldermen in 2015 to strengthen those pension systems. To close a $716 million hole in the Chicago Public Schools teacher pension fund, Mayor Rahm Emanuel borrowed an additional $389 in May, and the tax rate increase will cover the rest.

"We understand there are pension issues, but there needs to be a fair tax at state level. We need to make income tax makes sense," said Alderman Gilbert Villegas’ director of policy Justin Heath. Heath made those comments last month. Since then, the state income tax rate has increased by 32 percent after the Illinois General Assembly overrode Governor Bruce Rauner’s veto of the budget this month.
At the city level, Villegas voted against the property tax increase, and his office has put forward an effort to help concerned residents deal with the hike. Villegas’s office offers free assistance to residents to appeal their property taxes, and on the ward’s Web site, there is a guide to help citizen’s appeal their property taxes.

"We get the frustration," said Heath, "But there are free resources that you can use to help you pay as little as you can."

Heath said that the office has gotten positive feedback from those who choose to use the resources they offer.

Representatives of the Cook County Assessor’s Office will help people with their property tax appeals during a tax appeal seminar from 6 to 7:30 p.m. Monday, July 24, at the Norwood Park fieldhouse, 5801 N. Natoma Ave.

The tax bills are based on an average single-family home valued at $224,500 in Chicago, $299,100 in the north suburbs and $163,000 in the south suburbs.

In Chicago, owners are required to pay about $3,996.34 in property taxes for 2016, a $363.15 increase from last year, when that tax bill was $3,633.19. The tax rate for Chicago is 7.145 percent for 2016, versus 6.867 percent in 2015.

The tax rate for the north suburbs is 9.263 percent for 2016, versus 10.649 in 2015. The tax rate is 13.384 percent for 2016 in the south suburbs, versus 13.662 percent in 2015.

North suburbs will see a 6.5 percent increase while southern suburbs will see a 3.9 percent increase.

For owners of business property in Cook County, those in Chicago can expect a 9.3 percent increase, while those in the south suburbs will see a 3 percent increase and northern suburbs will see a decrease of 4.2 percent.

"Property taxes are inherently regressive and disproportionately impact people in poorer regions. The overreliance on this mechanism of funding local government compounds existing inequities," Orr said in the report.

The report states that due to the lower property value base in the southern suburbs, property owners typically see higher tax rates than those in the city or the northern suburbs which have a larger taxable value base.

Orr included an example of the Village of Ford Heights. According to Orr, property owners in Ford Heights pay a tax that is nearly 40 percent of their taxable value. In some cases in Chicago or the northern suburbs, property owners have a tax rate of 7 percent of their taxable value. The report also states, "a tax bill is based on the amount of money sought from the taxing districts, the property’s assessed value, the state equalization factor, and the applicable tax rate."

"We acknowledge that property tax is a regressive tax, and we have strong support for a progressive income tax," Alderman John Arena’s chief of staff Owen Brugh said.

Brugh said for those feeling frustrated by the tax hike, it’s important to acknowledge where the money from the taxes goes.

"We need to honor the obligation and commitment we made to the police and firemen," he said. Brugh also said the tax hike would bring more police officers in the 16th (Jefferson Park) District, emphasizing the potential outcomes that could come from this tax hike and less focus on the increase itself. Brugh said he has experienced "a bit" of frustration from residents but reiterated the obligation to officers and firemen needs to be the focus.

Jim Poole, chief of staff for Alderman Ameya Pawar (47h) said that although tax increases aren’t popular, they are necessary for a sustainable system and to attempt to catch up the debt we have created.

"Without this increase, pension liabilities increase. We needed to make the tough choices," he said.

Poole said without the increase we would, "see systems collapse." Poole said that if such thing were to happen, Illinois would find itself in a "pay-as-you-go" government.