The Illinois real estate assessment system bases one’s share of the total bill on the value of one’s property (unless one has farm land).
A short history of how we got where we are.
The 1870 Constitution required that real estate be assessed at 100% of market value.
That’s hard to accomplish in inflationary times.
Over the decades the standard accepted by the Illinois Department of Revenue slipped to 50%.
Nevertheless, in the late 1960’s McHenry County was officially assessing property at 60% of market value.
Supervisor of Assessment Stanley Cornue, who was the first one to hold the office after the assessing function was shifted from the County Treasurer’s Office, annually put out a sheet of paper that said that.
Concurrently, an attorney was challenging the system based on the 1870 Constitutional mandate.
Shortly before the 1970 Constitutional Convention, the Illinois Supreme Court ruled that he was correct in his assertion, but gave state officials a period of time to fix the situation.
The new Constitution allowed the level to be set by the Illinois General Assembly.
By the time the issue came up I was in the Illinois House and one the Revenue Committee.
Inflation had pushed the assessment level down from 50%.
It was closer to 33%.
A subcommittee on which I served sat in Room 118 of the State Capitol, as I remember it.
It was pretty clear that we would not push for a return to the 50% level, but, rather, would set the assessment level at one-third of market value.
But the representative of the Illinois Agriculture Association (the Farm Bureau) objected on a one-year average.
He pointed out that in northwestern Illinois developers of what turned out to be Galena Territory prices for the farmland being purchased were far above the going rate.
He suggested a three-year average.
Against my better judgment, I went along.
Within a few years, the Farm Bureau passed legislation exempting farm land from the law.
A complicated formula was enacted which assessed farmland based on productivity.
The result were assessments that were no where near one-third of market value, whether calculated on a one-year or three-year average.
And the rest of us were stuck with a three-year average of one-third of market value (“fair cash value” technically) that is hard to understand.
As the real estate market tanked in the last decade, real estate taxes did not decrease.
The reason was the Property Tax Cap.
Since it went into effect in the early 1990’s, tax districts were not allowed to get more money in the aggregate than the increase in the Cost of Living (or 5%, if inflation were higher than 5%).
As property values regularly rose more than the rate of inflation, the County Clerk’s Office was forced to cut tax rates.
When property values fell after the recession began, those tax rates were below maximums set by state law.
The tax districts (think mainly schools, because they account for 60% of one’s tax bill–more in rural areas) did not exercise much, if any restraint.
Virtually all, until recently, took ever dollar to which they were entitled under state law.
County government and McHenry County College, as well as a few other tax districts have showed restraint.
Most other tax districts have not.
The tax district refrain is
“We’ll lose the money forever.”
But taxpayers will save the money forever.
This article was stimulated by the lower of real estate assessments by McHenry County Supervisor of Assessments Robert Ross.
The real estate assessments in all townships but Riley and Grafton will be lowered by something called “township multipliers.”
Assessments will decrease something less than 5%.
If you multiply your last year’s assessment by the multiplier for you township below, you will have a good idea of what your assessment will be. (Of course, property owners have already been mailed this information.)
- Alden – .9641
- Algonquin – .9578
- Burton – .9641
- Chemung – .97
- Coral – .9641
- Dorr – .9767
- Dunham – .9641
- Grafton – .9854 (tentative)
- Greenwood – .97
- Hartland – .9641
- Hebron – .9641
- Marengo – .9496
- McHenry – .9664
- Nunda – .9695
- Richmond – .9754
- Riley – .9641
- Seneca – .9641
So most people’s assessments will be lower.
Does that mean one’s property tax bill will decrease?
Not necessarily, because lots of tax districts are still below their statutory tax rate limits.
And, Home Rule municipalities like Crystal Lake have no limit. That’s why taxes increased 13% in Crystal Lake last year.
One tax district, the McHenry County Conservation District has reached its limit.
That will save taxpayers a small amount of money.