By ROBERT N. SCHOEPLEIN
Associate professor in the Institute of Government and Public Affairs at the University of Illinois, Urbana, he was chief of the Office of Financial Government Affairs during the fall of 1974. He has also worked with property tax administration in other states.
Riding the tax reform Rollercoaster
New law setting assessment ratios at 33 per cent is one of four related property tax reform bills considered by legislature. Others would create state tax commission and tighten up on administration of the property tax at county and township levels
EVERY 10 YEARS, like clockwork, the compounded irregularities in property tax administration throughout Illinois bring forth a cry for reform—generating blue-ribbon study commissions, public hearings, and supportive newspaper editorials. State legislators then find themselves having to choose between local control of tax assessments and sweeping reforms in property tax administration. The choice is not easy. Rates of assessment (assessed value/market value) vary so greatly among individual homes, farms, or businesses in so many Illinois townships and counties that the situation evokes laughter or tears—depending on whether one is getting the tax break or the tax bill.
Up in the rarified air of state bureaucracy, the Department of Local Government Affairs (DLGA) is charged with annually issuing to each county a tax "multiplier" (equalization factor) to bring each county to some common statewide equalized assessment level. State aid to local school districts—$1.5 billion for fiscal year 1976—is based in part on these equalized assessment levels. Gov. Dan Walker inherited a scandalous mess with these issued "multipliers," and under his administration DLGA has chosen to do very little to alleviate the situation (see June, pp. 179-182).
In the legislative hopper
The Legislative Committee to Study the Property Tax (Sen. Terrell Clarke, R., Western Springs; and Rep. Fred J. Schraeder, D., Peoria, as co-chairmen) introduced four basic property tax reform proposals into the House Revenue Committee this spring. H.B. 990 now is law (P.A. 79-703), reducing the statewide average assessment and equalization levels from the previous 50 per cent of fair cash value down to 33 1/3 per cent.
A second bill, H.B. 3061, would establish a new Illinois State Property Tax Commission to oversee property taxes statewide. This measure passed the House in June and presently rests in the Senate Revenue Committee.
The declared intent of the other two proposals, H.B. 3065 and H.B. 3012, is to reduce the glaring irregularities in property tax administration at the county and township levels. Both bills now languish in the House Revenue Committee and may never see the light of day. H.B. 3065 would provide more stringent qualifications and broader powers for county supervisors of assessment. H.B. 3012 would provide the machinery to combine small township assessors' offices into assessment districts of no fewer than 10,000 persons.
Property tax increase ahead
In reducing the statewide assessment and equalization levels to 33 1/3 per cent (with three years for all counties to achieve that level), the legislature simply legitimated the reality of sharply declining assessment levels the past three years throughout the state. While the Walker administration has sat on frozen county tax "multipliers," inflation has sent real estate market values skyrocketing. The legislature was under particular pressure this spring to act by a mandate handed down by the Illinois Supreme Court in April. In effect, the court charged the legislature to provide a reasonable and unambiguous basis for statewide equalization. The figure 33 1/3 per cent is close to the most recent year average assessment levels for all 102 counties.
At a present 33.83 per cent level, Cook County would be relatively unaffected by H.B. 990. Other counties are not so fortunate. Local government officials in 34 counties which are presently well above 33 1/3 per cent level feel penalized because H.B. 990 orders them to make no adjustments to their assessments for the next three
November 1975/Illinois Issues/341
Bill pending in Senate would create commission to take over property tax role of Department of Local Government Affairs
years. The legislature is deliberately banking on further inflation to erode assessment levels in these counties down to the target of 33 1/3 per cent. Local governments which are at tax rate ceilings can only suffer through an erosion of their tax base during times of inflation.
Municipalities, school districts, and other local government units in the 68 counties presently assessing below 33 1/3 per cent now must play "catch-up." Taxpayers in these counties are in for a shock when they receive their tax bills next spring as local property taxes in some counties will rise by 50 per cent over the next three years.
The state Board of Education estimates that local property taxes for schools in these 68 counties will increase by $54 million overall between 1975 and 1978 because of H.B. 990. State aid to these same school districts will decline by about $35 million over the three-year period. The state generates monies for state school aid essentially through state sales tax and income tax receipts, but it would be folly for taxpayers in these counties to anticipate some kind of compensating sales tax or income tax rebate from Springfield.
A new commission
H.B. 3061 as amended seeks to establish a state property tax commission, to create a property tax legislative advisory committee, and to bring the existing State Property Tax Appeals Board into the new commission. The bill as approved in the House by a 129-18 vote calls for three commissioners to be appointed for staggered six-year terms by the governor with the advice and consent of the Senate. The annual salary for each commissioner has been pegged at $40,000.
This commission would carry out all functions relating to property tax assessment and administration which presently are vested in the DLGA. The commission would develop performance standards for local property tax officials and would be empowered to police local assessment practices.
H.B, 3061 arrived in the Senate late enough in the spring session to be bounced around in the melee of the closing weeks' crunch of annual budget appropriations, and a motion to discharge the bill from committee was defeated by one vote. Senate sponsor Terrell Clarke feels this was Just as well, because the delay provided time for more public hearings statewide and further evaluation of the proposal.
The governor's office thus far has maintained a low profile in support of the commission. William I. Goldberg, the governor's chief legal counsel, testified that the administration would prefer the number of commissioners to be increased from three to five members "for greater geographic balance." Senator Clarke defends the proposal for three commissioners. He says, "It is the caliber of the persons appointed rather than the geography that is important." Senator Clarke and administration spokesmen seem closer on another thorny issue—qualifications for the commissioners. Rigorous qualifications earlier were amended out of the bill in the House. Senator Clarke defends reasonable, broad standards and explains his position by saying that. "stringent, narrowly defined qualifications for commissioners are unnecessary if one trusts the chief executive to make appointments of the highest caliber."
|Cook County has been explicitly written out of all commission functions except for the assignment of an annual tax "multiplier." The Chicago bloc in the Senate did not vole to bring H.B. 3061 out of committee, and their support m subsequent action may be crucial ii the commission is to come into being. Cook County Assessor Tom Tully worked behind the scenes for passage of H.B. 990 at a crucial moment in the spring session by assuring Chicago legislators that the 33 1/3 per cent statewide assessment level would not have an adverse effect on Cook County. His office again may have to convince the Chicago delegation that under H.B. 3061 nobody from the proposed commission would be looking over Mr. Tully's shoulders.|
Local political turf
The desire of Cook Count y politicians to be free from accountability to Springfield is shared by downstate elected local government officials and county party chairmen. Both H.B. 3065 and H.B. 3012 tread heavily on local political turf. The supervisor of assessments' office falls under the purview of county board politics in many Illinois counties, and negotiable township assessment levels throughout a county can be useful to county politicians. The proposed minimum performance standards for supervisors of assessment statewide smacks of control from Springfield. Moreover, many local (and state) politicians privately are appalled by the thought of "tenure" for the supervisor of assessments, as is proposed, even if it is based on good performance.
Issue of local control
The provisions of H.B. 3012 to consolidate small assessor's offices has run into opposition for similar reasons. An added dimension is the fight to retain assessing by township—a matter of jobs. An old sage has it that township assessor posts originally were created to give Jobs to Civil War veterans. The issue today would seem to be a tempest-in-a-teapot because part-time and professional Jobs in these small township assessor's offices are pitifully few in number. However, county party chairmen view the total number of such jobs in their counties as too scarce for their tastes.
Proponents of H.B. 3012 point out that surviving area assessors would have more generous operating budgets. Local politicians apparently don't see it that way. One rural county board member expressed his feelings this way, "I'd rather see the assessor's office run out of the back of a gas station than pay any more taxes to set up some slick operation 10 miles down the road."
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