Property Tax Reform Intro FINAL

INTRODUCTION

TO REFORM

PROPERTY TAXES IN

COOK COUNTY

by the Cook County Property Tax (PTAX) Reform Group

Table of Contents

COOK COUNTY PTAX REFORM GROUP

Message from the President

Cook County’s Property Tax System

PTAX Reform Group

Guiding Principles

Addressing Key Issues

What’s Next

The Cook County Property Tax Reform Group

(PTAX) is the first working group of its kind. Built

across key County offices, the PTAX Reform

Group has taken an in-depth look at the way the

system has affected taxpayers and the

communities that need services to thrive.

In this report, we will provide the history of the

property tax system in Cook County, discuss how

it works, identify the challenges we face, and

begin to look at the key areas this group will focus

on to bring about the reforms needed to fully

transform the Cook County property tax system.

Reform will not happen overnight, but through

intensive review and collaboration, the PTAX

Reform Group will pursue the steps necessary to

get us to transformative, equitable solutions.

Message from the President

"The property tax system impacts every single person

who lives or works in Cook County. Working together

in a collaborative, data-driven way, we can build and

sustain an equitable, fair system that allows all our

communities to grow and fund our most vital

services."

COOK COUNTY PTAX REFORM GROUP

Property taxes are useful as a revenue source for governments and the residents they serve; they

reduce the reliance on more regressive taxes, such as the sales tax, and offer a relatively predictable

source of revenue. Property taxes are designed to be progressive taxes, as they “tend to take a

relatively smaller share of income as incomes fall” (Langley & Youngman, 2021).

Unfortunately, studies have shown that some property assessment practices across the United States

create regressive, inequitable systems in which “lower-priced properties are assessed at a higher

proportion of their sale prices than are higher-priced properties” (Berry, 2021).

In a groundbreaking 2017 investigation, researchers with the Chicago Tribune and ProPublica found

that “at least $2.2 billion in property taxes was shifted from undervalued Chicago homes onto

overvalued ones between 2011 and 2015”(Grotto, 2017). These regressive assessments can lead to

“financial breaks to homeowners who are well-off while punishing those who have the least,

particularly people living in minority communities” (Grotto, 2017).

The investigation also estimated that Cook County’s commercial valuation and assessment processes

created a regressive system where “undervaluing expensive downtown buildings while overvaluing

small businesses in poorer neighborhoods” (Grotto & Kambhampati, 2017) was a standard practice.

Assessments, however, are not the only part of the system that create potential inequities. Local

services, such as schools and libraries are funded by property taxes which are based on the value of

nearby properties. Communities with higher “property tax rates generally have low home values, which

drive up the tax rate needed to raise enough revenue” (Kingson, 2023). This situation results in higher

tax rates for people living in areas with lower-value properties and creates potential inequities for

communities which struggle to provide equitable access to services.

Higher tax rates discourage economic investment, even pushing existing businesses out of Cook

County to other communities. The loss of commercial properties and investment further reduces the

tax base and raises the tax rate. This can result in “fewer people paying property taxes, putting even

more upward pressure on the already enormous tax bills for those who do” (Toner, 2018).

This economic disinvestment spiral is primarily felt in the south suburbs, where some communities

have tax rates 400 to 500 percent higher than other communities in the County. For example, the City

of Chicago has a tax rate of 7%, while Park Forest has a tax rate of 41%, a 485% difference. In another

example, “composite property tax rates faced by Dolton homeowners are now more than triple those

in Chicago” (Toner, 2018).

COOK COUNTY PTAX REFORM GROUP

Cook County’s Property Tax System:

Its benefits and pitfalls

The system’s operation is hard to understand and changes due to assessments and appeals

are confusing, which creates instability for the local economy.

People who live in areas with lower-value properties and economic disinvestment are unfairly

saddled by astronomical tax burdens.

Residents and commercial property owners alike share a common dislike of Cook County’s

property tax system. The County’s system is one of the most complex in the nation and has been

described as “convoluted and opaque” (Grotto, 2017). General criticism and analysis typically

concentrate on two issues:

County residents’ confidence in the property tax system is low. Leaders in the property tax system

have recognized these challenges and believe that the system needs reform.

Based on the systems’ current state, President Preckwinkle called upon all Cook County elected

officials in the property tax system to confront the issues and implement change. This reform

group was created to work collaboratively on effective change throughout the system.

The PTAX Reform Group’s agreed upon mission is to ensure that the property assessment and tax

system produces predictable, accurate, fair, and equitable results in a timely and efficient manner.

Reforming the property tax system will allow us to address racial and socioeconomic inequities

across the County and provide transparency and stability in how we finance the government

services and programs residents rely on for robust, healthy lives.

COOK COUNTY PTAX REFORM GROUP

Cook County’s Property Tax System:

A Call for Reform

COOK COUNTY PTAX REFORM GROUP

Cook County’s property tax system is

one of the largest and most complex

in the nation. Here’s how it works.

Four separately elected offices make up the property tax system, which collects and distributes more

than $16 billion from people who own over 1.8 million properties (Cook County Treasurer, 2023).

The County sets a value for all the property, settles disputes through a system of appeals, sets the tax

rate for each area, sends out the tax bills, and provides each taxing district with the money they are

owed. Taxing districts such as local schools and municipalities set the levy or funding needs to provide

essential services.

Cook County collects and distributes funds to “588 individual taxing districts” (Cook County Treasurer,

2020), in addition to “more than 1,400 taxing agencies in Cook County” (Cook County Clerk, 2022).

Multiple taxing districts serve each property. These taxing districts include municipalities, school

districts, park districts, and others which provide a wealth of services that communities require. The

services provided to residents in these taxing districts support schools, police and fire protection,

health services, housing, roads, mosquito abatement, recreation, and more. The taxing districts for

each property are printed on a property owner’s second installment tax bill.

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PTAX Reform Group

Fritz Kaegi

Cook County Assessor

The mission of the Cook County

Assessor’s Office is deliver

accurate and transparent

assessments of all residential

and commercial properties.

Maria Pappas

Cook County Treasurer

The Cook County Treasurer is

responsible for collecting,

safeguarding, investing, and

distributing property tax funds.

Karen Yarbrough

Cook County Clerk

The Cook County Clerk is

responsible for maintaining

and providing vital records,

various aspects of the real

estate tax process, receiving

and making available to the

public statements of economic

interest.

Kim Foxx

Cook County State's Attorney

The State’s Attorney Office

works to uphold public safety

through the fair and efficient

administration of justice.

Samantha Steele

Commissioner

Board of Review

District 2

George Cardenas

Commissioner

Board of Review

District 1

Larry Rogers, Jr.

Commissioner

Board of Review

District 3

The Board of Review’s mission is to provide an efficient and accessible service to all property owners and

to review overvaluation assessment appeals with careful consideration to ensure a fair and impartial

judgment.

Toni Preckwinkle

Cook County President

LONG-TERM IMPACT

The complexity of reforming the property tax system requires a

comprehensive approach and long-term commitment.

TRANSPARENCY & ACCOUNTABILITY

Annual reports evaluate overall performance of the property tax system.

Research and other work products will be publicly available.

STAKEHOLDER ENGAGEMENT

For each set of reforms, targeted engagement plan will be implemented for

relevant stakeholders.

Mission

DATA-DRIVEN

Objective, third-party research, data, and shared fact sets based on industry

standards and best practices will guide the research and ultimately the policy

recommendations.

PTAX Reform Group Guiding Principles

To ensure the property assessment and tax system

produces predictable, accurate, fair, and equitable

results in a timely and efficient manner.

COLLABORATION

All relevant County offices are included; the staff working group meets

regularly to track progress, discuss research findings, and align on reform

recommendations.

COOK COUNTY PTAX REFORM GROUP

The PTAX Reform Group has identified the most significant hurdles to true reform and

outlined the following areas for further research and action, divided into immediate, County-

based actions and those requiring engagement with state legislators and other

stakeholders.

Inequities in the System

There continues to be the potential for regressivity in the Cook County property tax system,

and the group is committed to researching and implementing policy changes to correct it.

High Number of Appeals

Cook County remains a significant outlier regarding the number of appeals filed against the

initial assessments. Nationally, around 5% of the initial assessments are appealed (Nesbit,

2023). In Cook County, the figure is closer to 30% (Eng, 2023). Every property owner

deserves the right to appeal their assessment, but this departure from national norms may

contribute to inequities, reflects differing approaches within the system, and is time-

consuming and costly for property owners and the County.

Differing Systems of Commercial Property Valuation

Participants in the current system have differing views on how to value commercial

property, and Cook County should have a common approach across the board.

Access to Public Information

There are multiple actors and steps in the property tax system. The public, property owners,

and taxing districts need a clear understanding of the process and a way to receive answers

to their questions promptly and clearly. The County will recommend and make changes to

better inform all stakeholders.

An Integrated Data Management System

The County has committed to creating a modern data management system so that all

offices will be on a common platform and can access shared data for each property and

taxing district. Some of the components of that system have been put in place. Others are in

process. The working group will manage the completion of the process.

COOK COUNTY PTAX REFORM GROUP

Addressing Key Issues Within Cook

County's Property Tax System

13 14

Creating Effective Exemptions and Incentives

Exemptions are designed to provide tax relief for a residential property owner category (e.g.

homeowners, the elderly, or veterans). Incentives are designed to “encourage industrial and

commercial development in areas of the county which are experiencing severe economic

stagnation” (Cook County Assessor, 2023). Both serve an essential purpose. These tools,

however, result in the local tax burden shifting from those who receive the benefit to everyone

else. This shift can be problematic in smaller taxing districts or places where disinvestment has

occurred. The working group has retained the Chicago Metropolitan Agency for Planning

(CMAP) and the University of Illinois at Chicago to comprehensively analyze these tools' social

and economic costs and benefits. This will allow the group to learn how to deploy these tools

strategically to improve the system and achieve its mission.

Developing Performance Measures

Because of the many offices involved in the property tax system, a comprehensive, annual audit

should be a standard operating procedure. Therefore, the Cook County Office of the President

will provide annual reports on the property tax system, including the results of sales ratio

studies, which are the accepted measure of assessment performance in the industry. These

reports will also address progress in meeting the various objectives of the PTAX Reform Group.

Reducing the Reliance on Property Taxes

Illinois taxing districts rely more on property taxes to pay for its services more than in any other

state in the nation, except New Jersey (Civic Federation, 2022). While the property tax

assessment process determines the share of taxes each property owner pays, the amount paid

depends on how much each taxing district requests annually. Reducing the requested tax levies

will mean the taxing districts will have to rely on other sources of revenue or an increased use of

similar shared resources. The PTAX Reform Group will examine and recommend practical ways

of reducing the reliance on property taxes while still adequately funding critical public services.

These issues will be approached in multiple phases and engage stakeholders and community

members to ensure all voices are heard to achieve the goal of an equitable and fair system.

COOK COUNTY PTAX REFORM GROUP

Addressing Key Issues Within Cook

County's Property Tax System

Cook County PTAX Reform Group Decision-Making Framework

The PTAX Reform Group, working with the Civic Consulting Alliance (CCA), developed a

decision-making framework that leverages a data-driven approach to recommend policy

changes and implement reforms. The framework also includes ongoing review and

assessment, ensuring the PTAX Reform Group is using an equity lens to make progress in a

strategic and sustainable way.

COOK COUNTY PTAX REFORM GROUP

Addressing Key Issues Within Cook

County's Property Tax System

Review, Assess, Repeat

What's Next

COOK COUNTY PTAX REFORM GROUP

PTAX Reform Group Research Partners

The Cook County Office of the President has engaged academic and public policy leaders to

perform research and analysis that will be the foundation for the PTAX Reform Group’s

recommendations and reform efforts.

1. Langley, Adam, and Joan Youngman. Property Tax Relief for Homeowners. Lincoln

Institute of Land Policy, 2021.

2. Berry, Chris. “Reassessing the Property Tax.” The University of Chicago, 7 Feb. 2021,

cpb-us-w2.wpmucdn.com/voices.uchicago.edu/dist/6/2330/files/2019/04Berry-

Reassessing-the-Property-Tax-3121.pdf.

3. Grotto, Jason. “The Tax Divide: An Era of Errors.” The Tax Divide - Chicago Tribune, 10

June 2017, apps.chicagotribune.com/news/watchdog/cook-county-property-tax-

divide/houlihan.html.

4. Grotto, Jason. “The Tax Divide: An Era of Errors.” The Tax Divide - Chicago Tribune, 10

June 2017, apps.chicagotribune.com/news/watchdog/cook-county-property-tax-

divide/houlihan.html.

5. Kambhampati, Sandhya, and Jason Grotto. “How the Cook county Assessor Failed

Taxpayers.” ProPublica Illinois, 7 Dec. 2017, features.propublica.org/the-tax-divide/cook-

county-commercial-and-industrial-property-tax assessments/.

6. Kingson, Jennifer. “City Tax Rates Struggle to Keep up with Rising Home Values -

Axios.” Axios, 22 Aug. 2023, www.axios.com/2023/08/22/tax-rates-home-values.

7. Toner , Casey. “How Dolton, Illinois Reflects America’s Changing Suburbs in 2018.”

Better Government Association, 12 Nov. 2018, projects.bettergov.org/2018/dolton/.

8. Toner , Casey. “How Dolton, Illinois Reflects America’s Changing Suburbs in 2018.”

Better Government Association, 12 Nov. 2018, projects.bettergov.org/2018/dolton/.

9. Grotto, Jason. “The Tax Divide: An Era of Errors.” The Tax Divide - Chicago Tribune, 10

June 2017, apps.chicagotribune.com/news/watchdog/cook-county-property-tax-

divide/houlihan.html.

10. Pappas, Maria. “Tax Year 2021 Bill Analysis.” Cook County Treasurer, 1 Dec. 2022,

www.cookcountytreasurer.com/pdfs/taxbillanalysisandstatistics/taxyear2021analysis.pdf.

11. Pappas, Maria. “The Pappas Study - Cook County Treasurer.” Cook County Treasurer,

Oct. 2020, www.cookcountytreasurer.com/pdfs/taxstudy/thepappaspropertytaxstudy.pdf.

Works Cited

12. Yarbrough, Karen. “2021 Cook County Tax Rates Release.” Cook County Clerk, 5

Dec. 2022. www.cookcountyclerkil.gov/sites/default/files/pdfs/2021%20Tax%20Rate

%20Report.pdf.

13. Nesbit, Josephine. “Property Tax Assessment: What It Is and How to Appeal - U.S.

News Real ...” U.S. News & World Report , 6 Apr. 2023, realestate.usnews.com/real-

estate/articles/what-is-a-property-tax-assessment.

14. Eng, Monica. “How Cook County is Trying to Improve Its Property Assessments.”

Axios Chicago, 25 May 2023, www.axios.com/local/chicago/2023/05/25/cook-county-

property-tax-assessment-errors.

15. Kaegi, Fritz. “Incentives & Special Properties.” Incentives & Special Properties | Cook

County Assessor’s Office, 2023, www.cookcountyassessor.com/incentives-special-

properties.

16. Federation, Civic. “New Report: Illinois Property Taxes among Highest in Nation.”

New Report: Illinois Property Taxes Among Highest in Nation | Civic Federation, 22

Sept. 2022, www.civicfed.org/civic-federation/blog/new-report-illinois-property-taxes-

among-highest-nation#:~:text=Illinois%20came%20in%20second%20to,in%20

New%20Jersey%20paid%202.21%25.

Works Cited

Tara Stamps, District 1

Dennis Deer, District 2

Bill Lowry, District 3

Stanley Moore, District 4

Monica Gordon, District 5

Donna Miller, District 6

Alma E. Anaya, District 7

Anthony Quezada, District 8

Maggie Trevor, District 9

Bridget Gainer, District 10

John P. Daley, District 11

Bridget Degnen, District 12

Josina Morita, District 13

Scott R. Britton, District 14

Kevin B. Morrison, District 15

Frank J. Aguilar, District 16

Sean M. Morrison, District 17

Board of Commissioners

September 2023