If you shrieked in horror when you opened up your property tax bill last week, you’re not alone. Far from it.
Yet again, tax bills for many went up, despite the fact that home values have plummeted since the housing bubble burst. And yet again, the ironic main culprit is the law enacted 20 years ago to protect us from runaway property tax increases to pay for schools, county and municipal government and other services.
The tax bill for accountant Leslie Keast of Crystal Lake went up 16 percent, from $4,791 to $5,548 – her home’s value increased substantially despite having two foreclosed homes across the street. Across town, retired upholsterer Barbara Rogers’ bill went up 11 percent, from $5,180 to $5,750, despite her home’s value going down 7 percent and the senior citizen exemptions she takes.
Rogers and her husband have paid off their home, and Keast is five years away from doing the same. And both wonder just how long they can afford to stay.
“How much longer can I stay in my house?” Rogers asked. “The house is free and clear, but when you have a fixed income, that’s quite a chunk.”
Joe Greenwood of Lake in the Hills, a married father of two teenage boys, expected to see some kind of an increase.
He said it came as a shock when that increase turned out to be 14 percent – his $7,963 bill is almost $1,000 higher than last year.
“I moved here 12 years ago, and over the years it’s gone up a couple of hundred a year. But 14 percent?” Greenwood said.
<subhed>Why your taxes went up</subhed>
County Supervisor of Assessments Robert Ross said his office has fielded hundreds of calls asking why property taxes went up. The answer is a simple one – mainly because of the tax cap, and to a lesser extent the record number of people who challenged their assessments.
“Assessments don’t affect the amount that [taxing] districts get – the assessments control the share of paying what they get,” Ross said. “When you have tax levies going up and assessments down, there’s only one way the rates can go.”
The tax cap, formally known as the Property Tax Extension Limitation Law, was the taxpayer’s friend when property values were rising. It has become the friend of local governments and the taxpayer’s bane in the new reality of sinking values.
State lawmakers enacted the law for the collar counties in 1991 to help rein in tax bills increasing by double-digit percentages. The law limits the annual increase that taxing bodies can receive to either the rate of inflation or 5 percent, whichever is less. But when housing prices fall – a possibility never even dreamed of by state lawmakers – the tax cap works against property owners by guaranteeing that taxing bodies can collect the inflationary increase, which is 1.5 percent on the bills due this year.
In another twist, the other significant contributor to the increase is the record number of people who have appealed their assessments in the down market. Last year, there were a record 8,893 assessment appeals from taxpayers, up 51 percent from 5,885 appeals in 2010.
Reducing your assessment does not mean that a taxing body receives less money – because your assessment dictates your share, all other property owners have to make up the difference if you successfully get it lowered. Of course, you get to help pick up the slack for every other successful appeal in the tax district’s boundaries.
What’s more, the large number of appeals meant that the Illinois Department of Revenue issued a 1.7 percent multiplier for McHenry County, meaning that everyone’s assessed value went up 1.7 percent, regardless of what they did or did not do to their properties. The state last year issued a 3.48 percent multiplier, which was the first time since 1983 that it imposed one for McHenry County.
<subhed>Fix or fizzle?</subhed>
One of McHenry County’s representatives in Springfield has tried enacting a fix since hearing constituent outcry over last year’s property tax bills.
Rep. Jack Franks, D-Marengo, has pushed a change to the law that would forbid taxing bodies subject to the tax cap from collecting more in property taxes if their overall assessments drop from the previous year, excluding new construction. If approved, the law would set such a taxing district’s tax cap to zero unless voters approve a referendum allowing an increase.
His first attempt, House Bill 3793, was crushed last November on a 34-73 vote, but a second attempt has cleared the House.
Lobbying groups representing Illinois’ 7,000 units of government don’t like the idea one bit – they say the solution is not to cap revenues, but cap expenses such as pensions, unfunded state mandates and workers compensation. The groups also say that such a cap would cause governments to fall further into debt with rising inflation and rising fuel and supply costs.
Groups such as the Illinois Municipal League, Illinois Association of School Boards and Metro Counties of Illinois lobbied to defeat Franks’ first bill and are fighting the current version. Local governments pay for their memberships in said lobbying groups with tax dollars, a fact that irks Franks.
“They ought to be ashamed of themselves to use taxpayer money to hire lobbyists to increase people’s taxes,” Franks said. “That’s not what representative democracy is all about – it’s what good ol’ boy insider politics is all about.”
However, the most recent roadblock is not the lobbyists, but the senator whose bill Franks rewrote to move the idea forward.
Senate Bill 2073, an unrelated tax issue, passed the Senate and came to the House, but Franks rewrote it via amendment to carry the tax cap bill forward. It passed the House last February on a 74-39 vote and went back to the Senate for concurrence. However, the bill’s original sponsor, Sen. Terry Link, D-Lincolnshire, won’t move the bill forward, and told the municipal league in March that it was “dead on arrival.”
Franks defended his decision by saying that Link’s bill “was going nowhere in the House,” and he is encouraging constituents to call Link’s office to ask him to move the bill forward before the spring session ends May 31.
A Senate version of Franks’ bill has been filed, but has been stuck in the Senate Revenue Committee since January. Another Franks bill on the back burner would apply the measure to McHenry County alone.
<subhed>Mad as heck and stuck</subhed>
The fact that her tax bill increased is only one part of the system that infuriates Keast, the Crystal Lake accountant.
Keast said that taxing bodies are taking advantage of the fact that many people are trapped in their homes because of their depressed values, and therefore have a captive audience to tax.
“You can’t sell [your home] to get away from the property taxes, and who’s going to buy it?” Keast said. “The person who can afford to buy the house can’t afford the taxes.”
Keast and Lakewood resident Ron Edwards cited the Crystal Lake Public Library’s recently unveiled plan for a $28.6 million expansion. Edwards also angrily brought up McHenry County College’s plan for a $280 million expansion over the next decade – the college is predicting steady enrollment increases, but many of the county’s school districts are forecasting flat or declining enrollment.
“Does anyone besides the MCC Board of Trustees really deep down think they should get $280 million for expansion for the next 10 years? If anyone believes that’s realistic, I have some good swamp land to sell them,” Edwards said.
For Rogers, the retired upholsterer, skyrocketing property taxes are just one of her problems – her husband is dying of amyotrophic lateral sclerosis, or Lou Gehrig’s disease.
“I’ve done everything I can to lower my bill,” Rogers said. “It was so startling. How can my assessed value go down 7 percent and the bill go up 11 percent?”
Keast said she would sell tomorrow and get out of McHenry County if she could, noting that she will be broke if she stays until retirement.
“I’m livid. I’m a die-hard Republican, and even in a Republican county we can’t get our government and our school districts under control, and it makes me outrageously mad,” Keast said.
On the Net
Visit www.ilga.gov to get contact phone numbers and emails for your representatives in Springfield.