Cook County Clerk David Orr’s office on Tuesday released the 2012 property tax rates of more than 1,500 taxing agencies* showing the City of Chicago’s composite tax rate increased 17 percent in 2012, while tax rates in suburban Cook County increased 10 to 15 percent.
Chicago’s equalized assessed value (EAV) fell 13 percent, contributing greatly to the rate increase. But the reductions in taxable value within each city township varied greatly. Overall EAV in Chicago’s downtown commercial district declined 7.5 percent, while values in residential neighborhoods dropped 14 to 20 percent.
The decline in Chicago values is largely due to the reassessment and the equalization factor decreasing by 5.5 percent.
Bill Vaselopulos, Director of Real Estate & Tax Services for the Clerk’s office, said tax rates are calculated by using the amount of dollars levied by the taxing agency and the value of all taxable property located within its boundaries.
“If values drop and levies remain flat or increase slightly, the rates go up,” Vaselopulos said. “That does not mean your tax bill will go up because the higher rate will be multiplied against a lower taxable value. And identical properties on the same block can have vastly different tax bills depending on their exemptions.”
The tax rates are reflected in the 2012 second installment tax bills, which taxpayers will soon receive in the mail. Bills are due Aug. 1.
The levy for all Chicago agencies combined increased 2 percent or nearly $75.5 million more than in 2011. However, all of the increase was concentrated on Chicago Public Schools (up 3.4%) and the school bond levy (up 6.5%). The City of Chicago, the Chicago Park District and the City Colleges tax levies all stayed flat.
Countywide, $11,989,429,816 was billed in 2012, up 2.2 percent from $11.7 billion in 2011.
Tax bills for many Chicago homeowners will stay flat or see a slight decline. Tax bills for the majority of suburban Cook County taxpayers will increase an average of 3 percent in line with the Consumer Price Index increase. Variations will occur with adjustments in exemption amounts or dramatic assessment changes.
The tax rate release completes a process that started last December when each local taxing district, as required by law, filed its levy with the Clerk’s office. Each levy represents the amount of revenue an individual taxing body has requested to collect from the property tax.
Under Illinois State Statute, each Cook County taxing body with a statutory fund rate ceiling has its levy adjusted to the maximum amount based on the statutory fund ceiling for the district and the previous year’s total equalized assessed value (EAV) of property plus the value of any new construction, or the current year EAV―whichever is less.
This calculation can restrict the agency from receiving the full amount of its levy. Statutory rate limits apply to most categories of taxing agencies, but not to home rule units such as the City of Chicago and the County of Cook.
In accordance with the tax cap requirements of the Property Tax Extension Limitation Law (PTELL), the revenue that agencies may collect is further limited this year, in most cases, to a 3.0 percent increase over the prior year’s extension. Home rule agencies are exempt from this limitation. Next year, tax revenues will be limited to 1.7 percent more than the amount extended this year based on the Consumer Price Index released in January, 2013.
According to Vaselopulos, the equalization factor issued by the Illinois Department of Revenue decreased this year to 2.8056, down 5.55 percent from 2.9706 last year. The Department calculates the factor needed to bring the total assessed value of all properties to a level equal to 33⅓ percent of the market value of all Cook County real estate.
For the vast majority of taxpayers, the 2012 taxable value of their property, or EAV, will be lower than the 2011 EAV. This is due, in large part, to the equalization factor being reduced by 5.5% this year. For areas in the county that were not reassessed (all of suburban Cook) the EAV may have decreased by 7% to 9%. In Chicago, the area that was reassessed, the average EAV decrease was 13%. The reason for the larger decreases in the City is assessment reductions, in addition to the lower multiplier. These percentages reflect township-wide reductions. Individual taxing districts’ EAV decreases may vary.
The reduced EAVs result in higher tax rates for the vast majority of taxing districts. But this does not necessarily cause higher tax bills and more money for taxing districts. Districts continue to be limited by the CPI increase under PTELL.
The Alternative Homestead Exemption, commonly known as the “7 percent assessment cap” is now phased out in Chicago. Most homeowners in the City will receive the minimum exemption of $7,000. Over the next two years it will also be phased out in the north and south triennial reassessment areas. The exemption, first enacted in 2004, phased in a 7 percent increase of a property’s taxable value each year, subject to maximums which have varied under different versions of the program.
In 2010 the program was extended for a final three-year reassessment cycle, phasing in across the county, with maximum exemptions declining from $20,000 to $16,000 and then to $12,000. The residents of north suburban Cook enter their third and final year under the extended cap, with homeowners eligible for a reduced maximum exemption of $12,000 this year, down from $16,000. Residents of south suburban Cook, in their second year under the extended cap, are able to receive an exemption maximum of $16,000 this year, down from $20,000. Legislation was recently passed increasing the minimum homeowner’s exemption for all of Cook County from $6,000 to $7,000, Vaselopulos said.
Vaselopulos added that some homeowners continue to be eligible for a Long-Time Homeowner Exemption that can provide additional relief to income-eligible homeowners who have lived in their homes at least 10 years, or five years if the home was purchased under certain assistance programs. Under the program, qualifying taxpayers are not restricted to the maximum exemption amounts that would otherwise apply but would get varying benefits based on their qualifying income.
Newly passed legislation also increased the Senior Citizen Exemption this year, entitling qualifying residents to a $5,000 exemption in EAV, an increase over the prior year amount of $4,000. The Senior Freeze Exemption continues this year, limiting the growth in EAV to the base year, which is set when the property owner turns 65 years old and qualifies with a household income no greater than $55,000. Seniors are required to reapply annually for these exemptions in order to continue their eligibility.
A sample of how to calculate a tax bill is included in the report (page VI). The impact of suburban tax rates can be figured by substituting the sample suburban rate with actual suburban rates. To download the 2012 Cook County tax rates and to view reports showing levy and valuation detail by taxing district visit www.cookcountyclerk.com.