Chicago Sun Times Editorial - Legislature ought to renew cap on property tax hikes
Chicago Sun Times Editorial - Legislature ought to renew cap on property tax hikes
Copyright by The Chicago Sun Times Editorial
January 5, 2007
The Legislature this spring has one last chance to renew a worthwhile program that has brought a small measure of sanity to an otherwise crazy property tax system in Cook County. A law pushed by Cook County Assessor Jim Houlihan has for the last three years capped the growth in homeowner property tax assessments at 7 percent a year, or 21 percent for three years, which in turn protected residences from massive tax hikes. That law, however, will expire unless lawmakers take action.
We think it merits renewal, even as we acknowledge the law isn't perfect. It's perhaps for that reason that the Legislature has so far been reluctant to act. As with any program that lessens the tax for some, it necessarily means that others will pay more than they otherwise would have paid. In this case, those "losers" are commercial properties and apartments, and homeowners whose home values fell, held constant or grew slowly.
Owners of commercial property and apartments have been among the law's harshest critics, arguing that the program unfairly shifts the property tax burden to them. That's one way to look at it. As Houlihan points out, however, another way to look at the law is that it slows the shift that has been going the other way. Residential property assessments have soared in Cook County in recent years, far exceeding the growth in commercial assessments, and residential tax increases have outpaced business class bills as a result. A Civic Federation report determined that residential properties paid 10.1 percent more in 2003 under the program but would have paid 16.8 percent more without it. Other classes paid 2.4 percent more, but would have paid 2 percent less without it. That supports Houlihan's contention that the law has helped to maintain the proportion of taxes paid by each class of property.
Homeowners whose property values fell or held constant still saw a reduction in taxes, but that cap limited the reduction. And homeowners in slow-growth areas probably paid a bit more than they would have without the program.
In the triennial reassessment of Chicago last year, the median increase for residential property was a staggering 41 percent. Unless the program is renewed, the full bore of that reassessment will hit Chicagoans' tax bills this year. If it is renewed, the increase will be no more than 7 percent a year, or 21 percent for three years, with a limit on the benefit for extremely wealthy homes.
There's a lot of unfairness and unpredictability inherent in our property tax system. It needs major reform, but at least this program makes the process a bit more predictable. Until the entire system is reformed, we'll take the Band-aid solution over no solution at all.
Copyright by The Chicago Sun Times Editorial
January 5, 2007
The Legislature this spring has one last chance to renew a worthwhile program that has brought a small measure of sanity to an otherwise crazy property tax system in Cook County. A law pushed by Cook County Assessor Jim Houlihan has for the last three years capped the growth in homeowner property tax assessments at 7 percent a year, or 21 percent for three years, which in turn protected residences from massive tax hikes. That law, however, will expire unless lawmakers take action.
We think it merits renewal, even as we acknowledge the law isn't perfect. It's perhaps for that reason that the Legislature has so far been reluctant to act. As with any program that lessens the tax for some, it necessarily means that others will pay more than they otherwise would have paid. In this case, those "losers" are commercial properties and apartments, and homeowners whose home values fell, held constant or grew slowly.
Owners of commercial property and apartments have been among the law's harshest critics, arguing that the program unfairly shifts the property tax burden to them. That's one way to look at it. As Houlihan points out, however, another way to look at the law is that it slows the shift that has been going the other way. Residential property assessments have soared in Cook County in recent years, far exceeding the growth in commercial assessments, and residential tax increases have outpaced business class bills as a result. A Civic Federation report determined that residential properties paid 10.1 percent more in 2003 under the program but would have paid 16.8 percent more without it. Other classes paid 2.4 percent more, but would have paid 2 percent less without it. That supports Houlihan's contention that the law has helped to maintain the proportion of taxes paid by each class of property.
Homeowners whose property values fell or held constant still saw a reduction in taxes, but that cap limited the reduction. And homeowners in slow-growth areas probably paid a bit more than they would have without the program.
In the triennial reassessment of Chicago last year, the median increase for residential property was a staggering 41 percent. Unless the program is renewed, the full bore of that reassessment will hit Chicagoans' tax bills this year. If it is renewed, the increase will be no more than 7 percent a year, or 21 percent for three years, with a limit on the benefit for extremely wealthy homes.
There's a lot of unfairness and unpredictability inherent in our property tax system. It needs major reform, but at least this program makes the process a bit more predictable. Until the entire system is reformed, we'll take the Band-aid solution over no solution at all.
posted by Carlos T Mock @ 9:39 AM
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