America's Property Tax Advisor

Cook County’s 2016 Equalization Factor
is Rising


Higher tax bills may be in store for most property owners in Cook County, Illinois. The Illinois Department of Revenue recently announced a higher tentative 2016 property tax equalization factor for taxes payable in 2017. The tentative equalization factor for Cook County for 2016 is 2.7455. In 2015, it was 2.6685.


This means that even if a property's assessed value and local tax rate remain the same, the 2016 taxes will go up by close to 3% with the new equalization factor. The 2016 local tax levies could easily grow more than 3% based on current financial conditions in many Cook County taxing districts, creating an even larger tax increase for most taxpayers.


Determining the Multiplier


The equalization factor, often called the multiplier, is calculated to provide uniform property assessment throughout the state. The Department of Revenue determines the multiplier by comparing the selling price of individual properties to the assessed value over a 3-year period.


If the median level of assessment for all property in the county varies from the 33 1/3% level required by law, an equalization factor is assigned so assessments meet the legally mandated level.


Commercial Properties Hardest Hit


While the state multiplier does not cause tax bills to automatically go up due to its inverse relationship to the local tax rate, it does contribute to the disproportionate tax burden distribution on commercial and industrial properties due to the county's classification system.


The multiplier is calculated from an average assessment/sales ratio using a number of property classes that are primarily assessed at 70% below the state-mandated assessment ratio level of 33.33%, such as:


  • Vacant lots

  • Residential single-family homes

  • Apartments

  • Most Incentive properties

As a result, this perpetuates the extension of a larger tax burden on commercial and industrial properties when the annual state equalization factor is applied to the second installment tax bills.


Equalized Tax Rates Also Rise


The estimated equalized tax rates in the City of Chicago could go up 7% to 9%, according to a presentation made by a prominent Chicago attorney at a recent luncheon hosted by the Institute of Professionals in Taxation (IPT). One can only agree with this projection, assuming the 2016 estimated local tax levies increase by at least 5% after application of the rising 2016 tentative state equalization factor.


Some taxing districts could see even higher 2016 equalized tax rate increases, especially in Cook County’s south suburban townships, which are being reassessed for 2017. In these areas, the taxable valuation base is generally lower but the demand for local government expenditures continues to grow faster than the annual rate of inflation.