Comparing Property Tax Burdens

Reader Susan provided two commentaries on property taxes this weekend.

The first tells how to compare real estate taxes from jurisdiction to jurisdiction, state to state. It’s called the effective tax rate.

Divide one’s tax bill by what one’s property is worth (see Zillow, for estimate). The percentage obtained is the effective tax rate.

Here are her comments on that:

Present value of 55 year old $240,000 defined benefit pension is above $6 million, without factoring in COLA or health insurance benefits, which make it higher.

Illinois law puts no cap on property tax as percentage of home value.

Illinois law guarantees this $240,000 and other public employee defined benefit pension payouts for life, with survivorship rights, health insurance benefits, and with COLA.

Illinois law, on that basis, effectively enforces property tax rates on homes that can rise to higher than 100% of home values.

If you think that is absurd premise look at Detroit: as property values approached zero, the lower denominator created higher tax percentage rate. Tax divided by property value equals tax percentage rate.

My 2014 property tax as a percentage of home value is 3.67%, up from 3.285% in 2013.

As a comparison, 15 year mortgage interest rates are below 3.3%.

U.S. average property taxes as a percentage of home value are below 1.2%.

Ask yourself, to what percentage of your home value must your property tax rise before you are forced to abandon your property?

Ask yourself, if you abandon your property, who will buy it at pennies on the dollar? Whose federal tax dollars will bail out mortgage guarantors?

Will property tax laws change when the smart money owns all Illinois residential real estate?

Coincidentally, Reboot Illinois had an article that featured effective tax rates this past week. Below is the top part of its chart. (Only the top part is needed because McHenry County is so high on the chart.)

How high are McHenry County taxes compared to other high real estate tax counties in Illinois?

How high are McHenry County taxes compared to other high real estate tax counties in Illinois?  The figure on the right is the average effective tax rate for each county.  McHenry County is fourth in value of homes and it ties for fifth in effective tax rate.  Not shown are Winnebago County at 2.39% and LaSalle County at 2.1%, both of which exceed McHenry County’s 2.09%.  Note how much lower residential property taxes are in Cook County.

Susan also reports on what happened in her Seneca Township part of McHenry County. Seneca Township is west of Woodstock.

Insatiable appetite for more money is UNSTOPPABLE FORCE.

Only self defense against unstoppable force is IMMOVABLE OBJECT.

IMMOVABLE OBJECT= Law Capping Property Tax at some Percentage of Home Value (1.75% ?).

It is only complicated when it benefits those who make it complicated.

Take your tax bill, divide it by your property value, and you have the percentage of your home value taken as tax. [The effective tax rate.}

In California, they have long had a Property Tax Cap (Prop 13) at 1% of property value.

They seem to provide more than adequate education and governance in California with this 1% Tax Cap.

*(PLEASE NOTE: The percentage increase of stated “percentage taken for McHenry County Pension” rose 31.2%. This should alarm all homeowners in the county as we are all legally obliged to provide these funds for life of recipient and survivors, and they must rise with COLA. School District 200 Pension percentage rose 22.35% year over year.)

Percentage increases of my property tax percentage by taxing body as stated on property tax bill of 2014 (compared to 2013):

McHenry County: up 7.31%
*McHenry County Pension: up 31.20%

McHenry County Conservation District: up 10.76%

MCC: up 9.84%

School District 200: up 11.83%

School District 200 Pension: up 22.35%

Seneca Township: up 6.7%

My Property Tax data:

2014 data:

Taxing Body Rate Percent [of Total Tax Bill]

MCHENRY COUNTY 0.945481 8.57%

MCHENRY COUNTY PENSION 0.150564 1.37%

MCHENRY CO CONSV 0.274794 2.49%

COLLEGE DISTRICT 528 MCC 0.429772 3.90%

COLLEGE DISTRICT 528 MCC PENSION 0.000872 0.01%

SCHOOL DIST 200 7.439407 67.46%

SCHOOL DIST 200 PENSION 0.302812 2.75%

WOODSTOCK FIRE RESCUE 0.757490 6.87%

WOODSTOCK FIRE RESCUE PENSION 0.107959 0.98%

RURAL WOODSTOCK LIBRARY 0.119080 1.08%

SENECA TOWNSHIP 0.187291 1.70&

SENECA TWP RD & BR 0.312990 2.84%

Totals 11.028512 *(% of 1/3 of home value)

2013 data:

Taxing Body Rate Percent [of Total Tax Bill]

A map of McHenry County showing its seventeen townships.

A map of McHenry County showing its seventeen townships.

MCHENRY COUNTY 0.881056 8.94%

MCHENRY COUNTY PENSION 0.114753 1.16%

MCHENRY CO CONSV 0.248082 2.52%

COLLEGE DISTRICT 528 MCC 0.391268 3.97%

COLLEGE DISTRICT 528 MCC PENSION 0.000792 0.01%

SCHOOL DIST 200 6.652401 67.49%

SCHOOL DIST 200 PENSION 0.247494 2.51%

WOODSTOCK FIRE RESCUE 0.681136 6.91%

WOODSTOCK FIRE RESCUE PENSION 0.082114 0.83%

RURAL WOODSTOCK LIBRARY 0.104300 1.06%

SENECA TOWNSHIP 0.175517 1.78%

SENECA TWP RD & BR 0.277957 2.82%

Totals 9.856870 *(% of 1/3 of home value)

If you would like to see how much more or less local tax districts will get from the property tax, most district comparisons are found below:

  • Find a comparison of this year’s and last year’s municipal tax takes (Crystal Lake has the highest increase) here.
  • A township government tax comparison is here.
  • Schools, junior colleges, McHenry County and the Conservation District are here.
  • Fire Protection Districts are here.

There is a link to the County Treasurer’s web site where you can find the tax bill you will have to pay this year here.


Comments

Comparing Property Tax Burdens — 22 Comments

  1. You’ll hear that Illinois Law protects pensions, but you won’t hear that Illinois Law had regid restrictions on Local Gov. spending.

    They got around that little Constitutional glitch, by voting for all those 100’s of Special Purpose Taxing Districts we see today.

    Point is this could all be reeled in, if a few Pols were able to grow a spine and begin working in the State’s interest, instead of their own. But after 30 years of Illinois observation, good luck with that.

  2. Politicians have 1 job and 1 job alone.

    To get reelected at all costs; which usually means at the cost of the taxpayer!

    I still get mad when talking about Quinn’s promise not to layoff any teachers if they voted for him.

    Just an example, but how is that crap not illegal?

    Buying votes with taxpayers dollars, the legal way!

  3. Comparing property taxes across states is a little misleading.

    Some states have high property taxes but lower income taxes.

    Some states have lower property taxes but higher sales taxes.

    In most states (not Illinois), the states pay most of the cost of local schooling, which is one reason property taxes are lower.

    So you really have to look at the total tax burden state by state.

    And you have to eliminate the outliers, like Arizona and Alaska, that get a boatload of tax money from extraction taxes (i.e., oil and gas).

    The Tax Foundation does some really good work on this subject.

    BTW, Cook County homeowners pay a much lower property tax rate because they are the ONLY county in Illinois where houses are assessed at a lower rate than businesses.

    So homeowners get a big tax break.

    It’s also the reason Chicago especially has been “hollowed out” with as many businesses moving out as possible.

    So great for homeowners in the short run, bad for homeowners in the long run. (The other big reason businesses have moved out is the terrible school system, which makes finding good employees difficult.)

    However, if you look at tax rates downstate, you will find they are MUCH lower than in the collar county area.

    Yet they have the same state income tax rate and the same state sales tax rate as we do!

    And while they spend, on average, about two-thirds as much per student as our schools do, their kids do just as well on state tests, especially if you adjust for local demographics, i.e., how many poor kids are in the district.

    So while you have to be careful in comparing property taxes among states, the conclusion is, yes, property taxes in the collar counties are way high.

  4. The California property tax cap at 1% of fair market value doesn’t do much good overall as California has one of the highest overall tax burdens in the United States with high income and state sales taxes.

    California taxes property at fair market value, not the equalized assessed value (EAV) as is done in Illinois.

    Also some very good school districts in California have cut programs that kids and parents want in recent years.

    School boards and state legislators cannot or will not obtain meaningful concessions from the powerful California teacher unions.

    The Chicago Metropolitan Agency for Planning (CMAP) has an overview of the residential and commercial property tax system in Cook and the Collar Counties.

    Decoding Property Taxes and Classification
    http://74.82.131.153/economy/tax-policy/decoding-property-taxes

    Cook County Property Tax Classification
    http://74.82.131.153/economy/tax-policy/cook-property-tax-classification

    Too many taxing districts consider property and people as sources of revenue.

    Too many taxing districts will do everything they can to extract as much revenue from you in as many ways as possible, simultaneously making it as difficult as possible for you to discover how they are spending the money.

    Too many taxing districts are more concerned about their image than the services they provide.

    A good image means people will less likely scrutinize the taxing district.

    A good image means people will be more willing to part their money.

    A good image means its more likely key taxing district employees can maintain their high pay and benefits.

    Taxing districts are part of a machine that includes public sector unions, the bond industry, the construction industry, architects, underwriters, financial planners, and a wide variety of other vendors and special interests.

    So now that property values are down and taxes keep going up, people are starting taking closer notice.

    The problem is they are late to the game.

    The game escalated 40+ years ago.

    The special interests have a 40 year head start.

    The most devastating impact on taxes in Illinois wasn’t a tax but the Illinois State Constitutional guarantee that pensions cannot be diminished or impaired.

    But pensions can be increased or improved.

    And after increased or improved, pensions cannot be diminished or impaired.

    That cycle happened over and over starting 1971.

    Guess where that money will come from?

    Taxes.

    Income Taxes.

    Property Taxes.

    Other taxes and fees.

    And since the State is in serious debt, the teacher and administrator pensions will likely shift gradually from state income taxes to local property taxes (those districts outside Chicago as Chicago teachers and administrators have a different pension fund).

    And since we are just now starting on a massive wave of teacher and administrator, police, and fire retirements with pensions starting around $65K – $75K or so, you are going to see taxes climb, services cut, maybe some contracts renegotiated.

    And even more insidious is the ever increasing bond debt.
    Just notice all the public sector buildings, roads, and other construction projects that have occurred in the last 20 years or so.

    You never used to see that rate of public sector construction.

    The resulting bond debt has far too often been tiered up.

    Payments start low and continuously increase over the life of the 15 or 20 year bond.

    When payments started getting too high, refinancing occurred.

    Interest rates have been low.

    What happens when interest rates start raising?

    It won’t be possible to refinance bond debt to a lower rate, so the taxing districts will have to admit the real reason they are refinancing is to kick the can down the road.

    How far can they kick the can?

    How many times can they kick the can?

    Each time they kick the can, fees and interest are paid that could have otherwise gone to something more productive.

    And how are all those bonds repaid?

    Through property taxes and other taxes.

    It’s sort of like going shopping, charging everything on the credit card bill, and then
    complaining the credit card bill keeps going up.

    With these taxing districts you need to figure out what they are doing to make the bill so high.

    And that’s where transparency is so key.

    And what happens when Chris Jenner pushes for McHenry County College board meetings to be televised.

    He gets resistance from the administration and majority of the board int heir every so subtle and sometimes not subtle methods.

    Now you know why they are resisting.

    They are protecting their image while engaging in their favorite games of hide and seek and kick the can.

  5. We need more Chris Jenners on the board.

    I am hopeful that with the GOP in the county that will happen.

    Transparency & honesty is the key; because without that who knows what is beyond that very dark Curtain.

    All of this secret stuff reminds me of the Obama regime.

    Our pols, MCC, MCCD, County board, school boards, oh — and of course the MCSD!

    Did I miss anyone?

    With new people this is the beginning of exposing the truth and bringing back our county.

    All must be made accountable.

  6. Mark’s comment articulates the problem beautifully.

    Now that we understand the problem, what are practical solutions?

    Can we, citizens, force an initiative to cap property taxes as in California?

    Can we, citizens, force privatization (or break monopolies and introduce competition) of public programs we can’t afford, like MCC, jail, schools?

  7. No similar initiative in Illinois.

    Possible to abolish some districts like the TB District.

    Anne Hughes tried and failed.

  8. Given that spenders of public money show no restraint, how can we force the pool of money to which they have access to be limited by law?
    State Constitutional Amendment, perhaps? +/-300,000 petition signatures to get on ballot, or am I reading the rules wrong?
    Or is a referendum local by county possible?
    “Property Tax Maximum 1.75% of (EAV or full assessed)value” ?

  9. I think the tax rate figure for McHenry County is WAY off.

    I just got my tax bill yesterday. It says my house is worth $230,580, which is probably pretty accurate based on what houses have been selling for recently in Lakewood. My taxes are $7,264.72. That would make my property tax rate 3.16%, not 2.09%.

    I also own a townhouse in Crystal Lake which I would dearly love to sell, but, the market being what it is, I haven’t. The assessor says it’s worth $59,960, which is actually probably a little high (sigh!) but close enough for government work. The taxes are $2,313.62, so the tax rate is 3.85%.

    So my actual tax rate is 50% higher than what the chart claims on my house, and 85% higher on my townhouse than what the chart claims.

    Please — other people who comment on this blog — is your experience like mine, that property tax rates area actually much higher than 2.09% of market value?

  10. MEET THE NEW POOR: educated professionals who are out of work, can’t afford groceries for their families, and can’t afford the gasoline to get anywhere. Tax increases are like poison for the NEW POOR – squeezing the little joy that’s left for them, while decisions are made to bury them even deeper.

  11. I think the article where the picture is from is a bit misleading. If you take a look at this page: http://www.rebootillinois.com/2014/03/13/uncategorized/brendanbond/list-residential-property-tax-rates-illinois-county/2303/

    What you will find is McHenry County is listed as having a $2,090 per $100,000 property value or 2.09%. To validate this, I also looked at Winnebago at $2,390 which would be 2.39% and Kendall at $2,160 at 2.16%.

    My guess is that $2,090 is an average across the entire county for $100,000 of property value, but not specifically to the township you or I live in.

    To get the taxable value of your property, you must take the market value and multiply that by 33 1/3%. Then multiply that by the state’s equalizer (often call the multiplier). This is just an example because I don’t know the equalizer rate. I’m going to use 1.0243 which I found on propertyshark.com.

    $250,000 * .3333333 = $83.333.25 (Assessed Value)
    $83,333.25 * 1.0243 = $85.358.25 (Equalized Assessed Value – EAV)

    Then you must take the EAV and multiply that by each taxing entity (School District, Fire, Police, County, etc..)

    Once you add up all those values you will get your property tax amount. Of course it couldn’t be easy, it’s government we’re talking about.

    Below is a good breakdown where I used some information from:
    http://www.propertyshark.com/mason/info/Property-Taxes/IL/Mchenry-County/

    Again, this was just a quick example. Hope that helps

  12. Ambassador K’ehleyr, don’t forget the elderly in our definition of “the new poor”.

    The Fed is keeping interest rates close to zero “to help the economy”.

    We’ve all seen how well THAT policy worked out — Japan tried it for ten years and they call it the Lost Decade.

    But the key here is that the Federal government has sacrificed all savers, but especially our elderly, to business, especially the banks.

    Low interest rates have lowered borrowing costs for businesses and especially banks, helping their profits.

    But how are the elderly who saved their whole lives and can now no longer work supposed to get by when they get a fraction of one percent on their savings?

    Lower interest rates have cut the income of the elderly who saved for retirement by 60% or more!

    And lower interest rates are making it virtually impossible for people of any age to save enough for retirement.

  13. Having lived in St. Louis, MO for most of my life I was accustomed to living in stable neighborhoods with affordable property tax rates thus I did not inquire into the McHenry county property tax burden before buying a home.

    My God!!!!!!!!!

    The property taxes for McHenry county, IL are outrageous.

    Why do the voters continue to send the same local pols. back to office term after term?

  14. just got our tax bill for 2015 and it’s up to $7700. $60 bucks a month jump. I can’t afford this going up like this every freaking year. I have no idea what to do. We don’t go on vacation, don’t eat out, don’t go to the movies, we do NOTHING that cost anything b/c between taxes and feeding a family of 5, we are BROKE and my husband makes good money. We’d be “rich” if we lived anywhere else just based on his net pay,not even his gross pay. I’m so freaking frustrated right now. I am on health leave from my job and just did NOT need this today.

  15. I just opened my tax bill in coral twp(mc henry) went up “”””””44 percent””””” over $1000.00 dollars on a home that is worth $102,000.00 are these “law makers” for real!!!!!!!!!!!!!!

  16. Any resources for a good chart documenting the property tax RATES per county or town from year to year?

    Perhaps a 10-15 year chart?

  17. Tax RATES in Seneca Township, Woodstock CUSD 200:
    (Due) 2012: 8.4422% of EAV; 1/3 of EAV is Total home value, tax rate is: 2.814%

    (Due) 2013: 9.8569% of EAV; 1/3 of EAV is Total home value, tax rate is: 3.286%

    (Due) 2014: 11.029% of EAV; 1/3 of EAV is Total home value, tax rate is: 3.676%

    (Due) 2015: 11.664% of EAV; 1/3 of EAV is Total home value, tax rate is: 3.888%

    Tax RATES in Woodstock, Woodstock CUSD 200:

    due 2015 : 13.9311% of EAV, tax rate is 4.64%

    (Good source for old tax rates and EAV is Official Statements of the many many many many bonds issued by Woodstock CUSD200 CUPSIP number 581158)

  18. Thank you, Susan.

    That’s funny because Jack Franks, a representative since 1999, I know has championed his push to lower property taxes.

    My mom in Woodstock just got her bill.

    $7,000 on a $175,000 house in the Ponds subdivision off McConnell.

    $7,000 per year to rent her property from the government.

  19. Franks has had years and done nothing but cooperate in spending and promising pensions which have given Woodstock a 4.67% of total home values property taxtha only thing which might save us are systemic changes.

    1. No more tifs or tax diversion to insider favored developers. Taxpayers cannot afford to subsidize developers and the office holders’ soft dollar benefits from controlling that cash flow.

    2; schools should have to include accrue d (owed) intersst when calculating statutory borrowing limits.
    Debt caps are an insult to taxpayers when they are cavalierly ignored by taxing g bodies.

    3.we as a county and here in Woodstock area especially are spending far more than we can afford.on schools and social services and government.

    Budgets needed to be slashed when mortgage meltdown occurred but instead budgets were raised.

    Schools need to consolidate and cut spending now that the population is falling and people are taxed out of their homes.

    Frank’s is spearheading a consolidation of power without any facts or figures to support that will produce cost savings.

    Other posts on this blog suggest this consolidation of power wil raises costs of these government functions.

    So I prefer to concentrate on systemic problems and numbers calculations rather than promoting the career of a politician.

  20. My taxes have gone up every year, Since 2001.

    I had one year when it went down (we protested).

    The next year it went up 26%.

    Steven Wilson is right, the tax figure is off.

    My neigbor has more sq footage than me his taxes has been lower 4 times compare to my one sine 2001.

    I paid over $9,000 in Lakewood, he paids $7800 in Lakewood, bigger house lower taxes, I just don’t get it.

    It’s time to move out of Mchenry County.

  21. Well I see that the entire McHenry County is a shocked as I am.

    Solution ….. Tax Revolt by the people! Enough is enough!

    What are they going to do put a lean on thousands of peoples homes? Put us all in jail? I don’t think so.

    My taxes are now on a 417,000 fair cash value home 15,600 ish dollars.

    Soon I’ll have to abandon my home.

    Oh by the way….. *** Someone at McHenry County when I called said that there are pockets of McHenry county that are all ready abandoning their homes due to being unable to sell them due to the outrageous taxes.

    If anyone would like to organize this revolt with me please e-mail me @ carolsnelten@gmail.com

    LETS DO THIS! NOW IS THE TIME!

    I am totally serious…..

    It is up to us…..

    I always wanted be on national news …lol.

    And this certainly would make national news.

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