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Chicago



Property tax knives



By JOHN CAMPER

This month introduces new regular columnist, John Camper. A reporter for the Chicago Tribune, he started covering Illinois and Chicago politics for the Chicago Daily News in the late 1960s. He replaces Illinois Issues' award-winning "Chicago" columnist Ed McManus, who is now press secretary to Cook County State's Atty. Cecil Partee.



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In 1972 I attended a conference where the speaker of the Minnesota House of Representatives described how his state raised its income tax substantially in exchange for reducing the property tax.

"But how could you do that and get re-elected?" I asked him. (This was during the period when Illinois voters were smiting down politicians right and left for supporting a state income tax.) The Minnesotan seemed puzzled by the question. "We just explained it to the voters, and they accepted it," he replied. I was puzzled by the answer. Explain taxes to the voters? Maybe in your state, buddy, but not in mine. Here, tax policy is a game of three-card monte.

Seventeen years later, nothing has changed. This summer, after a quadrennial reassessment, residents of Chicago's north and northwest sides received property tax bills as much as 200 percent higher than the previous year, with many increases in the 50 to 70 percent range. Within days local politicans struck up a hypocritical chorus of outrage, a summer festival of buckpassing and fingerpointing that resembled a Nast cartoon.

Cook County Assessor Thomas C. Hynes said it wasn't his fault; he hates high property taxes. Mayor Richard M. Daley said it wasn't his, either. Members of the Chicago City Council, almost all of whom have voted for higher property taxes, said it wasn't their fault. They voted 41-0 to ask the legislature to hold a special session to do something about the problem.

Enough already. The fact is Chicago politicians adore the property tax. The money rolls in year after year, in good times and bad. This year the tax raised some $4 billion for local governments in Cook County. Since 1979 property tax proceeds in the county have risen 16 percent faster than inflation, according to the Civic Federation. The tax is easy to collect, difficult to evade. If you refuse to pay, the government will take your home.

Of course the property tax can hurt the elderly, the temporarily unemployed and old-timers living in hot neighborhoods. That's why reformers prefer the income tax, which is based solely on ability to pay.

But look at it from the perspective of a politician trying to extract the most money with the least hassle. The temporary increase in the state income tax, enacted this year after long and bitter struggle, will raise less than $500 from a family in Chicago's Lincoln Park neighborhood that makes $100,000 and lives in a $300,000 brownstone. But the recent reassessment, enacted with a stroke of a pen, raised property taxes on that type of house by $2,000 to $3,000. The income tax increase raises little to nothing from an elderly couple on the northwest side; but many such families received property tax increases of $400 to $1,000 this year.

Another nice thing about the property tax is that it's so complicated the taxpayer can't understand what hit him or who hit him with it. A Cook County tax bill is designed to delude homeowner into thinking local politicians are trying to keep taxes low. The bill contains a figure for "market value" that is far below what a home is worth. The "assessed valuation" is even lower, only 16 percent of the already low "market value" That sounds pretty good, particularly since other counties assess homes at 33 percent and Cook is allowed to assess commercial property at 40 percent.

But wait. The assessed valuation is now multiplied by a "state equalization factor" of almost 2. This is a necessary to undo all the complicated Cook County folderol and make its assessments comparable to those in other counties. More importantly, it allows local politicians to blame the wicked state for almost doubling property taxes. They would have us believe they're willing to get along on half the money they take in, but the state forces them to accept much more.


August & September 1989 | Illinois Issues | 68


The politicians are like the murderers in Agatha Christie's Murder in the Orient Express. Each one plunges the knife in, so all are guilty yet not is guilty. The county assessor sets the value of the house, the county clerk sets the rates, the county treasurer sends the bills, the state Department of Revenue sets the equalization factor. And there are many as 15 taxing bodies on a single tax bill, each getting its chunk.

All of this has confused the taxpayers into submission in previous years, but this year they appear less inclined to accept excuses. Chicago Ald. Roman Pucinski (41st) was jeered by a normally friendly group of constituents when he tried to blame the tax hikes on the state's failure to spend enough on education. "That's what the lottery is for!" shouted one person, recalling a misleading lottery ad campaign. (This is what happens when politicians consistently deceive the voters. People think taxes are no longer necessary to pay for education because the lottery is doing the job.)

The tax outrage will intensify after reassessment notices go out later this year to homeowners in the county's north and northwest suburbs, a highly inflationary real estate market. The only question is what form voter reaciton will take. If they direct their anger against a single incumbent, rather than all of them, the victim could be George W. Dunne, the chairman of the Cook County Board.

Cook County property taxes have risen rapidly in the last two years, largely to fund the criminal justice system. Dunne has been fairly candid in explaining this, but he is likely to face a challenge from Patrick Quinn, a former member of the Cook County Board of [Tax] Appeals and an expert at manipulating anti-tax sentiments.

In fairness to local politicians, the estate Constitution forces them to reply on regressive taxes. It allows home-rule governments to impose almost any tax without the approval of the legislature, except an income tax, the fairest tax of all. Local politicians would have a hard time talking the legislature into allowing Chicago to tax the income of its own residents as well as suburbanites who work in the city, as eastern cities have been doing for decades. But it would be worth trying, instead of dreaming up more ways to delude the voters. □


August & September 1989 | Illinois Issues | 69



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