Will Lower Assessments Lead to Lower Taxes?

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.”

Well, yes.

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.)

A taxpayer as seen by the Tax Foundation.

A taxpayer as seen by the Tax Foundation.

  • 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.


Will Lower Assessments Lead to Lower Taxes? — 12 Comments

  1. Because the Democrats have TOTAL control of the Illinois Legislature, it is likely that the funding for Teacher Pensions will be moved from Springfield to your local property tax bill.

    Will this reduce your State tax bill?

    If you think it will, I have a bridge to sell you.

    While this election cannot be used to stop this change (pension funding change can be passed before the new Legislature is seated next year)you can vote locally for Steve Reick to reduce Madigan’s majority in the Legislature.

    You can also vote for Rauner for governor.

    Do not fall for the ploy of voting for the Libertarian because that will have the same result as voting for Quinn.

  2. Total of all property tax collected in McHenry County for 2013 was $802,511,044.

    School property tax income for the 2013 tax year was $510,234,404 which represents 63.58% of all property taxes collected.

    BTW when schools report cost per student, it does NOT include Transportation costs which in 2013 totaled $23,529,504 in property tax dollars.

    Community Colleges collected $31,412,641.

    Some municipalities collect taxes separate for Police Pensions – in 2013 that represented $8,632,165 – McHenry County does not collect separately for Sheriff pensions..

    Park Districts collected $15,541,283 in property taxes.

    The conservation District collected $19,713,015 in property tax.

    Library Boards collected $20,801,887.

    Fire and Rescue Boards collected $50,564,460.

    Township Road Districts collected $17,153,970 of which $2,723,835 was transferred to Municipalities.
    Township Town accounts collected $8,992,139 in property tax.

  3. Thanks numbers guy, that is good information.

    You can’t compare what Townships collect to school boards.

    It’s outrageous our school boards get more and more when the enrollments are down.

    People are moving out of McHenry County.

    The amounts the school boards collect should reflect that, instead they take more from the tax payers that are left here.

    So, they get their portion regardless of population or enrollment.

  4. Many here remember when Property Taxes were an afterthought when purchasing a home or property.

    Since 2000, it’s been the first thing I look at when considering a property.

    I just closed on a property last night, getting over the asking price, which was a REO I purchased from Citibank in 09.

    Fetching a respectable 47% over what I paid.

    Of course this sale wasn’t in Illinois.

    Nice deal right?

    But I paid over %48 K in Property Tax in the 6 years and I’ll never see that money again.

    Which brings to relief the fraud of home ownership.

    Until folks start to have this mindset, that your home is nothing more than an ATM for government, you will continue to actually lose money on your so called investment.

    More and more people are starting to realize that the age old propaganda of home ownership being an ‘investment’, are starting to come out of the ether.

  5. D.J.?

    I wasn’t under any ether.

    I was under no delusion that I was making an investment.

    This is my home.

    This is where I have lived for over forty years.

    I raised my children and grandchildren here.

    I intended to die here.

    Now because of the greedy government and ever increasing tax burdens that doesn’t seem possible.

  6. Lower assessments lead to higher tax RATES.

    Tax RATES are a good way to compare real estate values across the region, State, Country and globally.

    Comparatively higher tax rates indicate lowered property values or higher local public spending or both, relative to tax rates in other geographical areas.

    California has long had a 1% property tax Rate cap (Proposition 13).

    Imagine what your life would be like of you could count on a household budget with an annual property tax amount restricted by law as to how much taxing bodies were legally allowed to seize from you?

    Do you think your home value might stop sinking?

    Do you think you might have discretionary funds for home improvement?

    Why is Illinois the only State in America that can’t seem to cover expenses for normal public functions (school, government) without charging property tax rates that exceed mortgage interest rates?

    Is Illinois providing value in return for a property tax rate which is FOUR TIMES (400% of!!)that of California, as McHenry County Illinois property tax rates are 4% when California property tax rates are capped at 1%?

    Tax rates are the amounts due from homeowners to taxing bodies empowered by State law, expressed as a percentage of home value.

    If Property Taxes are not paid, the County may seize and auction ownership rights of the property.

    This creates a death spiral for property values.

    As tax Rates are unlimited by Illinois law, it is conceivable that home values can drop to zero.

    As Public Pension Debt continues to accrue, and by law Illinois Property OWES that debt (Illinois or McHenry County cannot, by law, go bankrupt like Detroit), the value of Illinois property continues to sink near zero.

    The only property of value in Illinois is that which can be exempted from property taxation–TIF or Enterprise Zone recipients for example.

    In Western McHenry County, tax rates are around 4% of property value.

    This makes for ‘blighted’ conditions; it would be foolish to spend money on a property which constantly sinks in value…and values sink consistently as tax amounts rise each year due to higher spending by schools, governments, and on discretionary grant or road project expenditures.

    This means that household budgets must pay property taxes with money formerly spent on home upkeep.

    This reduces jobs for skilled labor in construction, landscaping, plumbing, roofing, and electrical trades.

    When a person can live anywhere else in America and pay average of 1.15% property tax rate, and where property values have risen in the past 5 years rather than plummeted as they have here, it is hard to imagine a rational person choosing to locate in McHenry County Illinois unless granted special tax exemptions.

    Special Exemptions mean that the other taxpayers in this region have to Subsidize the waivered amounts which would have been paid by the exempted party.

    With Blighted Conditions, local officials have chosen to exacerbate the problem for all local residents by applying for Enterprise Zone status.

    This will bring an even greater tax burden onto local homeowners as we are forced to subsidize big business which is courted by local officials with grants and tax abatement deals.

    Social Engineering Impact is clear: You Are A Moron to EVER risk a DIME of your own money:

    Instead, get Other Peoples’ Money (Taxpayer Money seems abundant if you know who to talk to) to take the risk, while YOU lock in the upside reward if there is one.

    No business would be wise to ever locate here without locking in tax exemptions and waivers.

    Homeowners must assume our tax bills will continue to rise each year and our property values will continue to sink each year.

    Behave accordingly, and we wind up with a blighted community outside Enterprise Zones which will be bought up in foreclosure for pennies by insiders. At that point, Property Tax policy may change.

  7. To lower taxes you have to “encourage” taxing body representatives to stop taking inflation and new growth increases.

    If that is done, your taxes will decline in a slow manner and essential services (think Sheriff, Health Dept, Roads) will continue to receive funding.

    It will cause hard decisions to be made about “fringes” (think federal lobbyists, trips to D.C, seminars on possibly relevant subjects).

    Check out my website, hammerand.com to see how property taxes has increased over the last 10 years, and ask yourself, could the County Board cut three-quarter of a million dollars from their two hundred+ million Dollar budget?

  8. Geez John, $3/4 M?

    That’s equal to what 3 retired School Admins are knocking down in pension every year.

    A scalpel is not what’s needed here. More like the blunt force of an axe!

  9. Why does Grafton have the highest tax rate?

    Has Zielinski under assessed properties to gain popularity?

  10. Buttons: Where did you get the idea that Grafton has the highest rate?

  11. This article, while being very enlightening, is silent about tax rates.

    The article does show Grafton as having the highest, less than one, (tentative) multiplier indicating the most accurate, consistent assessments. (A multiplier of one is a bulls eye indicating the need for no correction).

    What wasn’t noted in the article was that our office had, by several orders of magnitude compared to some other townships, the greatest number of adjustments to the 2012 assessments.

    That herculean effort was exerted in spite of 2013 being the final year of the general assessment period.

    Instead of casting wild aspersions, everyone has an open invitation to stop in our office so we can explain what we did and answer any and all questions.

    That should put everyone’s mind at ease.

    In doing so, you’ll realize that, for the first time in very long time, the days of property owners having to invest valuable time to get accurate assessments are thankfully behind us.

  12. Great Al, thanks for weighing in.

    But in reviewing the postings, I don’t see any “wild aspersions” being tossed about.

    What I do see is a lot of property tax fatigue.

    ‘Bulls eye’, ‘multiplier’, equalizer, quantifier, are the same gibberish Gov. terminology, tossed out to explain, why we’re being parted from our money.

    No one cares about assessed valuations when they continue to pay more and more.

    I have a property in Dallas that I pay.0190 of assessed value.

    that’s Dallas Tx., not some tiny village in McHenry County.

    In McHenry I’m paying .0419.

    Are the pols in Dallas twice as smart as those in McHenry ?

    Are they 2 X more efficient?

    Does my water come out of the faucet twice as fast in McHenry.

    I’ll take a stopwatch to it but I don’t think so.

    Or should I just refer to the disclaimer at the bottom of the, I don’t know how many assessor sites, that explains your not responsible for the rates?

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