Property owners face potentially higher tax increases next year

If you haven’t already paid, the second and final installment of property taxes is due Tuesday.

Before you breathe a sigh of relief, assessments are starting to be published to determine how much you’ll pay in 2013. And if you didn’t know, the inflationary rate our taxing bodies can capture next year is double what it was on this year’s bills.

The rate of inflation for next year’s bills is 3 percent, according to the Illinois Department of Revenue.

Under the tax cap, that means the county’s taxing bodies can collect 3 percent more in 2013 than they did this year.

The increase, coupled with well-documented sticker shock from this year’s bills despite significantly lowered home values, could mean another record year for challenges. And that, in turn, could prompt the state to again sting county taxpayers with a multiplier increasing assessments.

“We’re hoping there won’t be as many, but last year was a record,” McHenry County Supervisor of Assessments Robert Ross said.

Taxpayers have a 30-day window from the day their township’s assessments are published to file an appeal with the county. Six townships already have published theirs, and four more are expected to do so soon, Ross said.

The county fielded 8,893 assessment appeals last year for this year’s taxes, up 51 percent from 2010. The 5,885 appeals filed that year were 40 percent higher than in 2009. By comparison, the county received 677 appeals a decade ago.

The ironic culprit for tax bills rising while property values fall is the tax cap law enacted more than 20 years ago to protect the Chicago suburbs from out-of-control increases.

State lawmakers imposed the tax cap, or the Property Tax Extension Limitation Law, on McHenry and other collar counties in 1991 to rein in double-digit annual tax increases. The law limits the increase that taxing bodies can receive over the previous year to either 5 percent or the rate of inflation, whichever is less.

State lawmakers in 1996 allowed voters in other Illinois counties to enact tax caps by referendum. The cap subsequently passed in 33 counties, while voters in nine others rejected it.

But the tax cap has become governments’ friend and taxpayers’ foe with the bursting of the housing bubble. When home values decline – a scenario that state legislators never considered – the tax cap ensures governments receive the inflationary rate of increase.

As a result, many local governments have made sure each year to capture that inflationary increase. But some governments in recent years, such as the city of Woodstock and Huntley School District 158, have recognized homeowners’ plights and opted not to collect that increase. The McHenry County Board is expected to keep the levy flat for next year’s tax bills unless revenue projections dip lower than 2 percent or decrease.

Getting one’s assessment lowered does not mean the taxing body gets less money, but that the decrease is divided equally among every other property in its boundaries. For that same reason, you pay slightly more for every other successful assessment challenge.

Furthermore, as successful appeals increase, so do the odds of the state slapping a multiplier on tax bills countywide, on top of any multipliers at the township level. The Illinois Department of Revenue issued a 1.7 percent multiplier on this year’s tax bills, meaning that everyone’s assessed value went up 1.7 percent, regardless of what they did or did not do to their properties. The 3.48 percent multiplier put on 2011’s tax bills was the first the state had issued for McHenry County since 1983.

The tax cap has averaged 2.6 percent since its 1991 creation. The highest percentage increase was 5 percent that first year for 1992’s tax bills, which is the only time that the 5 percent cutoff was lower than the rate of inflation. The lowest was the 0.1 percent increase that came in the throes of the Great Recession, for 2009 taxes payable in 2010.

On the Net

Visit shawurl.com/ckf to learn more about how to appeal your assessment.

What it means

Townships have begun the annual process of publishing property tax assessments. Property owners have a 30-day window from publication to appeal them.

Six of the county’s 17 townships have published their assessments. Deadlines so far are:

Residents of Alden, Greenwood and Seneca townships have until Sept. 21. Hartland Township residents have until Sept. 28, and the deadline for Nunda Township is Oct. 9.

The Aug. 27 deadline for Richmond Township has passed.

Assessments for McHenry and Dorr townships, and possibly Burton and Dunham townships, are expected to be published in the next week to 10 days.

Source: McHenry County Assessor’s Office

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