Chicago-Based Publication Explains Why Those Not in Cook County Don’t Cry When Chicago Taxes Go Up

Mike Fourcher’s “The Daily Line” email today talks about the apparent impending repeal of the soda tax by the Cook County Board.

Included is information about property taxes.

What first caught my eye was the follwoing sentence:

But after decades of relatively low taxes–yes, you heard me right–Chicago and Cook County citizens are discovering somebody has to pay for all the stuff we’ve got here.

How rare is it for those based in Chicago to admit that their taxes are low!

Unfortunately, Fourcher concentrates on comparing tax rates, which ignores the fact that homes in Cook County are assessed about two-thirds as high as those outside of Cook County.

He reports this observation:

While this might be news to most Cook County residents, downstaters are acutely aware of it.

During last summer’s debate over education funding, witnesses regularly testified how they were paying sky high property taxes to keep their schools open.

One downstate school superintendent testified he paid $8,000 a year on a $300,000 house.

That means if Cook County residents, and Chicagoans in particular, have a gripe about their taxes, the rest of the state will not give a hoot.

There is a better way to compare property tax burdens than using tax rates.

As readers of McHenry County Blog might remember, there is a measure called the “effective tax rate.”

By dividing one’s tax bill by the value of one’s home, one can obtain one’s effective tax rate.

I found a web site, that provides this information.

The link in the previous sentence shows McHenry County’s effective tax rate–2.766%.

That means people living in McHenry County–on average–pay 2.766% of the value of their home in taxes every year.

Using the same web site for Cook County shows an effective tax rate there of 2.009%.


Chicago-Based Publication Explains Why Those Not in Cook County Don’t Cry When Chicago Taxes Go Up — 15 Comments

  1. Smartass is inaccurate.

    Our actual property tax rate in Woodstock is 4.2% of total home fair market value.

    Effective tax rate is about the same.

    The Tribune published a study which Cal posted, indicating effective tax rate in McH COunty is above 4%.

  2. Woodstock D200 school board should be glad to explain to CPS why property tax rates do not matter in a community, and that it is best for the children for CPS to at least double their tax rates (debt–used for operating funds, and pension payments–is not limited by PTELL) in order to fund multi-million dollar present-valued benefit entitlements for teachers and administrators.

  3. McH County had a mean and median property tax rate about 3.66% last tax year.

    (Had to calculate by hand, County Clerk publishes tax data as pdf.).

  4. Agree with Susan.

    I just went to Smartass and it showed my home as UNDERTAXED by several thousand dollars.

    Not accurate by a long shot.

  5. Startass seems to assume that property tax rates are the same in a given county.

    I know that they vary widely in this county, and I also know that the homeowners in the North Shore suburbs of Cook County pay a much higher tax rate than homeowners in Chicago.

  6. But the tax rate is not what one should focus on because it does not take into account the second element of the tax bill–assessments.

  7. Re: “the second element of the tax bill–assessments”

    And what is Madigan’s primary source of income?

  8. I believe the tax rate is exactly what should be focused on.

    Tax rate=public spending relative to the means of the community.

    Tax rate is a ratio. This smooths out comparisons to other places.

    It can be compared with counties all over the State and Country on a relative basis, since everywhere in America property taxes are used to purchase social services by community members.

  9. Because EVERYONE in a taxing district pays the same RATE, assessments are what drive discrepancies between who pays how much.

    Those who enjoy unfairly low assessments, or have high amounts of exemptions driving assessments lower, are not paying as much because the RATE is applied to a smaller taxable value.
    But when one home’s assessment goes DOWN, all OTHER homes must pay more to make up that difference.
    In this case the RATE rises to accomplish collection of that money from the new distribution of obligated properties.

    Tax Rate is said to be capitalized into home values.

    That is, a home in Woodstock taxed at over 4%, with Chicago homes paying 2%, will lose the difference in value–2% in this case–each and every year.

    This explains the suppressed home values in Woodstock even as the rest of the world recovered value.

  10. Tax rates are not comparables unless assessments are at the same level.

  11. Assessed values for homes are misleading.

    Taxes should be based on ACTUAL value.

  12. Tax rates are comparable always when one describes rate on full fair market value.

    (Rather than rate of EAV which varies).

  13. EAV can simply be multiplied by appropriate factor (in the case of Illinois counties outside Cook, the factor is 3) to get full, assessed value.

    Now consider rate. In a perfect world, the same rate being applied to all citizens’ fairly assessed properties would mean all paying their fair share.

    But in a world where assessments (that value to which the singular rate is applied) are variable due to subjective determinations by a human, the rate becomes distorted by unfairly low (or high) assessments.

  14. Property tax rate is just like sales tax at a grocery store.
    Every year you wheel your cart up the the checkout line and pay the local ‘sales tax rate’ in order to buy your house back from the government.

    The cashier has to charge all customers the same tax rate.

    But she likes some of the customers, so she may pretend not to notice the pool or tennis courts or extra bathroom addition in her friends’ cart, she may not run that through the scanner.

    However, at the end of the day, her cash register needs to contain a precise amount of money (the tax levy).

    That total amount she needs to collect in a day to turn over to store manager has to be divided amongst ALL her customers checking out that day.

    And she is constrained by law to charge all customers the same sales tax rate.

    This means she must divide the total amount her till has to collect that day by the total value of all the merchandise all her customers checked out. That ratio will be the tax rate applied to each and every customer.

    Had her friends been assigned full value on their merchandise, that tax rate would have been lower.

    The net effect is that all customers had to pay a higher rate so her friends could also pay that higher rate but on less merchandise than was verified in other customers’ carts.

    That’s how assessments which are unfairly low harm the entire community.

  15. When the libs get dispossessed of their own homes, come back and cry to me about from your diversity-hell!

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