Property taxes are rising in Cook County (Chicago), Illinois and there may be even bigger increases in the coming years. Officials are bracing for more tax hikes as local governments look for additional revenue sources and attempt to fill a widening gap in state-mandated pension funding.
Property assessments are still slipping thanks to the Great Recession that was initially brought on by the burst in the subprime mortgage bubble. In fact, equalized assessed values were down 4.4% in the city this past year and are expected to decline further as valuations continue to reflect recessionary sales. When values fall, tax rates must go up to bring in needed revenues for the city, county, schools, and other obligations.
Even with a 5.1% drop in the state equalization factor from 2.8056 in 2012 to 2.6621 in 2013, equalized tax rates are still on the rise. Property tax rates jumped 6.8% in the city and an average of 12%-19% in suburban areas this year.
The county’s fiscal outlook shows continued pressure to make ends meet. Meanwhile, the City of Chicago's Annual Financial Analysis 2014 projects a corporate fund budget deficit for 2015 of $297.3 million, growing to $587.7 million by 2017. These projected shortfalls do not include state-mandated obligations that will spike to a projected amount of $839 million in 2015 (payable 2016). This is an increase of almost $550 million from the City’s 2014 budget contributions for police and fire pension funds.
Appeals May Be Necessary
Property owners have no control over the tax rate that officials set. However, they can work to keep their property's assessed value fair and equitable.
The assessment appeal success rate for the largest taxpayers in Cook County was over 77% this year. The numbers prove that working with a professional to proactively appeal an overstated tax assessment is the best solution to dealing with escalating property taxes.