Exemptions 'Tinker' with Your Homeowner Property Tax

Scott Bagnall, a township assessor and attorney, is good at listening. It’s his job at the Niles Township Tax Assessor’s Office, one of the 30 such offices around Cook County.

For instance, he listened intently when a resident came into his office a few years ago wondering why he was paying 27 percent more on his home property taxes than his neighbor was on a similar house three doors down on Jarvis Avenue in Lincolnwood. Both homes were assessed at similar values of $124,000 and $127,000, yet the man in Bagnall’s office was looking at an extra $1,200 in taxes.

Bagnall’s answer: It came down to exemptions. The neighbor had applied for and received an exemption for Cook County residents who have occupied their homes for 10 continual years.

Exemptions, which are discounts on your assessed property value, are the only tools to lower your property tax bill once your assessed value has been fixed. Residents can try to lower their assessed value by appealing the number set by the Cook County Assessor’s Office.

Aside from religious, charitable or educational organizations, no business property can qualify for exemptions; instead, they are reserved for homeowners. Unlike Cook County’s decision to be the , all Illinois residents can use exemptions.. You can access a list of exemptions from the Illinois Department of Revenue’s website.

How Cook County’s assessment process impacts exemptions

Yet unlike township assessors elsewhere around the state, Cook County’s township assessors cannot determine the value of properties in their own towns. Instead the Cook County Tax Assessor’s Office decides property values for everyone from its seat in downtown Chicago.

The end result, according to Bagnall, is a lot of appeals and exemptions on property value assessments, and lot of complaining at the local level. Decisions for all 1.8 million “parcels” (i.e. pieces of property) in the county are made in the county offices in downtown Chicago, which can be far from the actual property and its reality.

“People come into the township office and complain. Then we help them file for exemptions and appeals,” said Bagnall, who said that the complexity of the system in Cook County is exacerbated by confusing exemptions, of which there are at least nine for homeowners.

“The assessed value of property can be tinkered with through exemptions, which takes it farther away from the actual real estate value of the property,” said Bagnall. This, of course, leads to less tax revenue for local taxing bodies, such as schools, parks and libraries. Check back with Patch tomorrow on how those taxing bodies work to collect as much in taxes as they believe they deserve.

Exemption backlog in the county assessor’s office

According to Maura Kownacki, spokesperson for Cook County Assessor’s Office, about 300 people work for the assessor in various departments. They determine how much your property is worth, taking into account variables like your property’s age, the number of bathrooms in your house, and how much the house across the street costs. On your property tax bill, this is the “property value” of your home or business, or the closest thing to the market value of your property.

Kownacki then explained that the “very big issue right now” for newly elected Assessor Joseph Berrios, her boss, is a change to a tax exemption for seniors. State legislators in Springfield altered the “senior freeze” exemption for Cook County, requiring seniors to reapply every year for the exemption awarded for their age.

“We’re doing our best to get the word out and working closely with state legislators to change the law back,” said Kownacki, who fears the day seniors open up their bills and their eyes go wide.

“The basis of the property tax equation is assessment, but there are a lot of other factors involved,” said Kownacki. “The property tax system has to be reformed,” she said, referring to the many actors involved in determining tax bills, and the backlog in paperwork that ensues with exemptions.

In a December 2010 report on Cook County’s property tax system, The Civic Federation, a non-partisan government research organization, said this about exemptions, as they function with Cook’s “classified” system of taxation: “The current system of Cook County-administered relief creates an additional layer of application paperwork and audit procedures.”

It then went on to suggest a reduction in exemptions and even a change in the system altogether to “end the Cook County exception and make legal assessment levels consistent statewide.”

Paying for the “pie”

Ultimately, these exemptions add up, and this means more of the tax burden for those who do not qualify, or don’t try to qualify, for exemptions. By Cook County’s count for city and suburban properties in the tax year 2009, $26 billion in assessed value was removed from the final tax bills through exemptions. That’s a lot of paperwork and a lot of lost revenue.

But while paper can be recycled, the tax levied to public bodies such as schools or libraries still must be paid, as part of the overall “pie” of tax burden. According to Cook County Assessor’s Office Spokesperson Kownacki, about 60 percent of the tax bill goes to schools, many of which have received referendums from voters for higher taxes.

“The state is not fulfilling its obligation to fund education, and so it’s placed on the shoulders of taxpayers, with higher tax rates,” she said. When your next-door neighbor files for an exemption and contributes less to the overall tax bill for Cook County taxing bodies, less goes into the tax burden pie.

The lesson: Do your homework and file for any exemptions you can. Compare your property value with the people next door, and make sure your assessed value is not more than that of the people across the street for the same-sized house.

“The process to appeal is a lot more transparent than it used to be,” said Kownacki, who has worked at the office for 20 years. To find comparables, the property tax values are all listed online.

And consider stopping by your township tax assessor’s office before your property bill arrives to check on your property’s assessed value.

Dan Patlak, a Cook County Board of Review Commissioner and former township assessor, stressed the value of township tax assessors in helping tax payers understand the process, which he knows can leave people aggravated.

"It’s a confusing system," he said.*

*Clarification of Patlak's point on the subject.