Oak Park trustee weighs in on 'regressive' property tax problem
The Brookings Institution is calling attention to a recent Chicago Tribune investigation that found a regressive property tax system has some Cook County homeowners from poorer neighborhoods paying more in property taxes than taxpayers residing in far more affluent areas.
In a posting on its website, Brookings researchers noted that under the county property tax assessment system as currently constituted, homes in low-income (and predominantly minority) areas of the city tend to be overvalued by 10 percent or more while homes in more affluent areas tend to be undervalued by that same percentage.
Researchers highlighted the bottom-line result can be stunning, leading to instances where the owner of an average home selling for $100,000 shelled out an effective tax rate of 1.6 percent over a four-year period beginning in 2011 while the owner of a $1 million home paid 1.1 percent.
With tax rates on the lesser valued home saddled with levies as high as 45 percent greater, researchers concluded the bulk of Cook County’s total $14 billion in annual property tax collections are being paid by those who can least afford it.
Still, Oak Park Village Trustee Simone Boutet said to truly understand the system might require more than just looking at the final numbers.
"There are differences between the tax rates, the method by which property taxes are assessed (the valuation) the tax levy and the amount each taxpayer pays," Boutet told the West Cook News.
According to Boutet, local governments control the community's tax levy, which determines the amount of money necessary to cover services. She added the Cook County assessor controls the valuation, or the determination of how much of the share of the levy each property owner must pay.
“Each taxpayer’s bill is based on the property’s equalized assessed valuation (EAV) in relation to the municipality’s levy,” Boutet said. “In the suburbs, the regressive tax problem exists between different municipalities. It is the result of the fact that poorer people are clustered in poorer communities with lower property values. Those communities must still levy to pay for basic services, such as police and fire, garbage pick-up (and) snow removal.”
Still, Brookings researchers can’t understand why a mansion owner in Lincoln Park would be lpay the same rate as some struggling property owner in Englewood or Hegewisch.
Boutet argues the reasoning is simple, at least when such comparisons are made to suburban areas.
“If wealthier people paid a higher tax rate in the suburbs, the rich suburbs would have even more money,” she said. “One cannot change the tax rate without lowering the levy or increasing the overall EAV."
Boutet said the method of property valuation in the city is determined by the Cook County assessor and not by local elected officials.
To Brookings, the answer to a fairer and more equitable system lies in the enactment of a new property tax assessment system that would result in more accurate, efficient, transparent assessments.