Our home’s assessment increase notice came in the mail last week.
It said the assessment is going to increase 5.24%.
It’s called the “multiplier”
Those unfamiliar with Illinois’ complex real estate taxation may think that means my tax bill is going to increase 5%.
The tax takes of local tax districts are limited to
- whatever they got last year,
- plus the increase in the CPI (Consumer Price Index),
- plus new construction and re-modeling, plus any tax hike approved by referendum,
- plus whatever was shifted to people like us by cities like Crystal Lake, which have Tax Increment Financing districts.
This past year the CPI increased 2.5%, according to the Illinois Department of Revenue. Since 3.4% was used this year, it would seem to me that next year’s increase for most of us should be less than this year’s.
I interviewed McHenry County Supervisor of Assessments Donna Mayfield. She provided some really good information that I want to share with you.
I asked her what the it meant.
”The main reason we put the multiplier on there is to equalize the effect of the assessment process between townships. In theory, we’re trying to assure that people who are receiving the same services are paying a proportionate amount for those services. The reality is that it doesn’t always work.
“You may have one assessor who is assessing right at market value. You may have a housed across the street in a different township, but it is identical and the services it gets are the same. And if that assessor is assessing property lower, if you don’t try to equalize those two townships then the one is going to pay a lot more for those services.”
I asked her what the average increase was this year.
“We’re probably countywide about 5%”
The question assessors will probably get most this year is “What about homes not selling?”
“We probably didn’t have your assessment up to what would have been the market value during the boom.”
That led to the question of how much home value increase in 2006, which is what the always-one-year-behind real estate tax system is measuring with this year:
“18% in one part of the county and 6% in another.”
I wondered if we would see assessment decrease next year and the application of what is called a “negative multiplier.”
“No, I don’t think so.
“You know, we have a three-year average. So we run these studies every year. We average those studies. We also adjust those studies for any re-assessment the assessors have done.
“Now, when we have a booming market, this is a good thing because we don’t have these huge increases on a yearly basis. A declining market is a little more difficult to explain because you don’t show the decline as quickly.”
“Local tax districts should not fear that they will not receive some percentage increase from inflation,” I observed.
“That’s a true statement,” Mayfield replied.
I asked what next year’s multiplier would be.
“Truthfully, we haven’t seen a lot of failing values. The (number of) transactions have really fallen off.
“Back in 1979, we had 14-16% interest rates. For a while you didn’t see much happening. People sat on their properties because they couldn’t afford to take the loss. But initially the prices didn’t go down. What you say were people selling who had to. That was a much more drastic situation than what you see right now.
“I just wish I had a crystal ball. That would make our life a lot easier.
“We’ve had a lot of people call. I expect we’ll have a lot more appeals than we had previously.
“If you thought your assessment was kind of border line in the past, then I’d take a closer look at it this year.”
I asked what the Coefficient of Dispersion or margin of error was this past year.
Turns out it was 11.53%.
What’s that mean?
Half of the property in McHenry County is assessed between 29.5% of market value and 37.1% of market value. The other half is either higher or lower.
Because of the math, half of the county’s real estate is always assessed below the median average and half above.
If you want to appeal your real estate assessment, the sign above points the way to where the Supervisor of Assessments has her office.