I have been following effective tax rates for decades.
When I was State Representative I regularly asked the Legislative Research Unit to determine them for various parts of Illinois.
Why?
They are the only way to compare property tax burdens.
Take your tax bill and divide it by the value of your home.
When people would say they had no idea what their home was worth, I used to answer that they had a better idea than anyone else.
Now, I suggest the go to the web site Zillow and type in their address.
So I just did that for our home at 275 Meridian St., Lakewood, Illinois.
Zillow says it’s $332,109–up $1,586 in the last month.
Wow.
Our tax bill is $9,855.38.
Doing the division gives us an effective tax rate of 2.97%.
Wonder if that means we’re in for a jump next year.
I can remember when local effective tax rates were closer to 2%.
Last fall, the Chicago Tribune calculated effective tax rates for Chicago, suburban Cook County and the collar counties.
McHenry County was highest at 4.02%, as you can see.
In March I pulled the data for McHenry County municipalities and published it here.
With reassessment notices going out, I thought some folks might be interested.
And you will note, despite the gnashing of teeth in Chicago, even with increased real estate assessments this year and higher taxes to pay for local pensions, Chicago homeowners are still way lower than in McHenry County.
With some changes in the words, the song “Don’t cry for me Argentina” comes to mind.
The homeowners there are still taxes way lower than we are out here.
The tax bill above is $9,855 for the $332,109 house.
Let’s say the McHenry County portion of the property tax bill is 7%.
$9,855 x .07 = $690.
The Democrat Jack Franks for County Board Chair Proposed 10% Tax Cut Secret would be $690 x .1 = $69.
$69 / $9855 = .7% (seven tenths of 1%).
Not included in that $69 / less than 1% Tax cut:
– IMRF pension which can’t be cut, even though IMRF themselves cut the required employer contribution during the mortgage meltdown crisis, spreading the contribution over future years;
– the Conservation District;
– both of which are separate line items on the property tax bill.
++++++
Jack Franks says vote me into office then I’ll tell you my tax cut plan (how he would achieve the 10% County Board Cut and how he would help persuade other taxing districts to cut their property tax revenue by 10%).
Jack Franks also told the Northwest Herald in 2014 (while promoting two County Board referendums) that he would not run for County Board Chair in 2016 (he’s running for County Board Chair in 2016).
Jack Franks also told the the Northwest Herald twice in 1998 (while running for his first term as State Representative) that he would limit himself to 3 terms in office (he’s in his 9th term in office).
Jack Franks also says he’s never voted for a tax hike (he has voted for unfunded and underfunded state mandates on state and local government which became law that have resulted in tax hikes / service cuts / kicking the can.
It seems Jack Franks tells the voters what they want to hear.
+++++
The Republican Governor Bruce Rauner administration has a tax cut plan called the Turnaround Agenda.
Jack Franks doesn’t support that plan though:
– Workers’ Compensation Reform
– Lawsuit Reform (Jack Franks is a trial lawyer)
– Prevailing Wage Reform (Jack Franks agreed to step down as a candidate for State Representative 63rd District if someone came forward whom Jack Franks believed was both electable and held a political viewpoint consistent with his own; that turned out the be Jack’s friend John Bartman, a fellow Marengo resident, former Chair of McHenry County Democrat Party, listed on Jack Franks Host Committee fundraiser flyer, former chair of McHenry County Democrat Central Committee PAC, current Prevailing Wage Monitor for IIIFFC which is an IUOE Local 150 affiliate.
– Unemployment Insurance Reform
– County and Municipal approved Empowerment Zones where employees could not be mandated to pay fees to the union as a condition of employment
– Repeal Prevailing Wage
– Eliminate Project Labor Agreements
– Allow Municipal Bankruptcy (isn’t that better than unlimited taxes)
– One Year Property Tax Freeze (this Franks might support)
– Collective Bargaining Reform
– 10 Year Term Limits on Illinois General Assembly Members (most states have term limits for the legislature)
– Eliminate requiring employee fees to a union as a condition of employment.
– Prohibit labor organizations from making contributions to the campaigns of officeholders they collectively bargain with throughout the state, including mayors and school boards (currently the labor unions are exempted from the state law that prohibits contractors with more than $50,000 in contracts from contributing to the campaign of an officeholder that awards such contracts).
– Pension Reform for existing employees – Freeze Tier 1 benefits earned to date, all future service will be at Tier II benefit levels.
– Amend the state constitution to allow the above pension reform.
Unions (private and public) have a strangle hold on McHenry County.
Teachers go on strike – taxes go up to fund the salaries and the ultimate increases in pensions!!
Any unit of government trying to hold a line on salaries is consistently over-ruled by the a State or federal arbitrator even if there is no strike.
All a union in this County needs to do is just ‘threaten’ to sue and the County Board GIVES them $75,000 of your tax dollars!
The Board members may have an R behind their name but the majority is definitely not my kind of Republican!!
Thank you Mark!
Every reader of this blog should print out Mark’s comment and distribute it to their neighbors, family, friends.
Cut and paste it to your Facebook page.
If all homes are assessed Fairly, then each home is assessed at its Fair Market Value and the Tax Rate for each District reflects a Fair and Honest tax rate.
(When some homes are unfairly assessed at too low a value, the tax Rate RISES for ALL taxpaying homeowners.)
If you want to know the tax rates defined as:
GO TO:
https://www.co.mchenry.il.us/county-government/departments-a-i/county-clerk/taxes
CLICK (current year) LINK:
“District Rates By Taxcode”
(Find your own tax district which will include school, County, MCCD, etcetera).
For example, page 23 shows a section of Woodstock (District 08026).
The far right column Total indicates the Actual Tax Rate for homes within that District.
The Tax Rate on EAV there is 13.82%.
Since EAV is 1/3 of Total Fair Market Value of home, then 13.82%/3=4.6%
Homes in Woodstock there are taxed 4.6% of their total fair market value.
$800/month in taxes should be criminal!
Is it any wonder young people aren’t staying in McHenry County?
They can’t afford to!
Median income households in Woodstock cannot qualify for a conventional mortgage loan on a median value home due to 4.6% property tax Rate.
This severely diminishes the pool of potential home buyers for Woodstock property…
which depresses property values further….
which causes higher tax rates as schools refuse to cut levy…
which depresses property values further…
Susan—your statement above “median households in Woodstock cannot qualify for a conventional mortgage loan” is absolutely false, you should be ashamed, a fear monger.
Eligibility for a conventional mortgage loan depends on a lot more than median income and tax rate!
In 1970 at the age of 28, Madigan was elected
To represent the 22nd District in the Illinois
State House of Representatives.(46 years)
Madigan has been Speaker of the Illinois House since 1983,
with the exception of 1995–1997 when Republicans took
Control of the Illinois House.
As we know, good ol Madigan boy Jack Franks
Has been voting for Madigan since 1998.
DON’T FORGET Jack has been getting campaign
Donations from Madigan, unions & teachers pacs
All that time too.
All of us can make a difference if we write letters
To the editor, talk to people we know & walk our
Neighborhoods.
We can make a difference.
Jim,
When the taxes are higher than the mortgage, it makes it impossible for first time home buyers to buy a home.
Why do you think rentals are up in McHenry County?
Because many cannot get a mortgage!
30% of median income will not cover mortgage payments including property tax escrow at 4.6%.
Please explain the basis of your disagreement.
Woodstock homeowners pay at least 2% more than Chicago homeowners.
2% of $180,000 is $3600.
$3600 divided by $56,000 represents 6.4% additional portion of income required to pay for taxes (not a store of value as is payment towards home equity).
That additional 6.4% of income makes the 30% of income requirement impossible.
People with some degree of common sense instinctively know that
neither McHenry County nor Illinois can survive this fiscal mess
created by Madigan and his ilk.
This DEMOCRAT created catastrophic event cannot and will not be solved in our
lifetime, hence the Great Exodus from Illinois.
Why stay and pay to drive your family into the poorhouse if you can
leave ?
To believe otherwise is a fools errand
The ability to get a conventional mortgage also depends upon net worth and down payment, among other significant factors. The discrepancy between residential assessment levels, Cook County v downstate counties, arises because in Cook County residential properties have been valued as low as 22% of FMV whereas in down state counties homeowners have always been valued at 33% of FMV.
In Cook county, commercial properties are valued at 40% of FMV (unless you have clout) but in downstate counties they are valued at the same 33% as residential.
There are many factors that determine eligibility for a mortgage.
We got in the whole foreclosure mess because people were allowed to have mortgages at 100%, no money down, or 5% down and then lost jobs.
It goes on and on.
I believe that Woodstock homeowners pay twice as much as Chicago homeowners, since Chicago the effective tax rate in Chicago for homeowners is 2% and in Woodstock it is in the range of 4%.
Specifically, my statement was that median income households (half the population)
cannot qualify for conventional mortgage loans, therefore a large portion of potential buyers of Woodstock homes are knocked out of the ‘demand’ portion of the equation.
If the pool of potential buyers of all real estate is measured, some of them can afford to pay all cash, some can put down payments, and some of them require conventional mortgage loans.
Addressing buyers who require conventional mortgage loans, with traditional down payments, 30% of income requirement disqualifies potential buyers in Woodstock because property tax rates are 4.6% on Homes (vs. Almost everywhere else in America with property tax rates averaging 1.4%).
I do not understand how anything about differing EAV calculations or commercial property tax rates vs. residential property tax rates affects that.
Thanks Mark and Susan for your excellent contributions on the topic of taxes in our community.
To add further insult to an already terrible injury, go to this URL:
http://www.zillow.com/visuals/negative-equity/#11/42.3220/-88.4674
Enter your zip code (or county, etc.) and then use your mouse to hover over areas on the map.
As you do, the legend on the left will change.
Woodstock, for example shows 35% of homes underwater with 6% of them delinquent.
Will this get better or worse as taxes rise?
Worse, of course!
People will be forced to lower their asking price in order to close the deal.
Then tax rates will need to rise as the EAV declines in order to continue to pay for services.
The only hope is to reduce tax demand, significantly, if we are ever to come out of this doomed spiral.
For 2016, all assessments in Dorr Township will increase by 3.67% while properties in Greenwood Township by a whopping 6.76%.
Looks to me like real estate taxes might edge up a bit!
I don’t have data to support this theory but one of the problems in McHenry, other than the massive number of taxing bodies, is that outside of residents, or your standard auto dealerships, grocery stories, ect, there is a lack of revenue producing entities.
Part of the reason Cook County has such as lower property tax rate is you still have corporate headquarters, a huge airport, and tourist destinations generating hundreds of millions, if not billions in extra tax revenue.
Just imagine the tax dollars Wrigleyville generates every time there is a Cubs game.
Look at Schaumburg.
Part of the reason they built that huge mall was to accumulate sales tax revenue to keep property taxes down.
And what does McHenry County have?
Sure, there are some solid businesses here, but not an auto plant or attraction that becomes a huge tourist revenue booster.
Even if an auto plant gets tax relief, such as the Chrysler plant up the road, it creates so many collateral jobs that can be an extra shot in the arm.
But how do you attract a business?
There’s not a huge geographical advantage here.
A potential employer can go immediately north to Wisconsin and pay less a tax burden.
Kane County to the south can tout freeway access via I-90 and Hwy 20.
Motorola built that white elephant in Harvard, and immediately closed it.
If there was a distinct advantage to the county, someone would have snatched it up much quicker.
Employers also look to the local work force to see if it will support them.
Subaru of America built its plant in Lafayette, Indiana.
One reason?
Purdue is right next door, with a plethora of engineers and techs to hire.
Is our work force property educated?
MCC has to tell us that.
What is here that is good for an employer?
How do you attract other revenue generating entities?
Ya know, until Chicago has to pay the same rate as ours, our rate will always to higher so we can pay for their fun.
Our tax rate has almost nothing to do with Chicago, only costs us more for schools because we also do not get our fair share of State aid to education.
We have many more, wider, longer and safer than Cook County.
Bike paths that is!
No McHenry County tax district that is not a Home Rule municipality can collect more than 7/10 of 1% more next year than it did this year.
See CPI history:
http://www.revenue.state.il.us/LocalGovernment/PropertyTax/CPIhistory.pdf
Jim, we don’t get our fair share of income taxes is because Chicago gets it for their schools, that causes our property taxes higher.
If the playing field was level our property taxes would be lower and Chicago higher.
That is related action reaction.
If Chicago paid the rate of the rest of Cook Co, our rate would be lower.
Of course with the crew that runs the state, we’re going to get screwed no matter what.
Votes and payback rule.
Remember there are a few ways that taxes can be hiked more than 7/10 of 1% (.7).
Bond principal and interest that is payable to bond investors is an example.
++++
Collective bargaining agreements typically cover 3 – 5 years.
If pay for the employees covered by the collective bargaining agreement averages 3%, then savings must be found elsewhere to stay within the [7/10 of 1% + bonds].
Ditto for healthcare costs which could very easily go up more than 7/10 of 1%.
Disproportionate GSA to Chicago is often cited as the reason for high tax rates.
I do not believe this is supportable logic.
Spending more than the means of the local taxable community is a deliberate decision of school administration and boards.
Schools all over America provide equivalent education to children, using similar rations of non-local revenue.
See Peer Comparison Search Tool at the National Center for Education Statistics:
nces.ed.gov
At higher than 4% property tax rate, more than half (median) local household incomes must divert funds from college (or retirement) savings in order to pay extraordinary property tax amounts each year.
School boards and administrators who demand this fealty payment have yet to explain the value provided to families and children who are forced to give up future higher education savings in order to fund mediocre quality lower education provision.
Agreed Susan!
And Thank You for all your research!!
It would also help out if certain people paid their fair share instead of getting breaks and pushing their tax burden onto the rest of us!
EXAMPLE: How does Jack Franks’ 40 Acres qualify as Farm Land?
I see no crop.
Why was this granted as (severely reduced) Farm Land by the Coral Township Assessor?
http://www.mchenrycountygis.org/Athena/
PIN 17-06-400-021
You will need to select Basemap drop down menu on the left and then select 2014 Aerial.
Regarding General State Aid for Chicago vs the suburbs below are some observations:
1. For 17, Chicago will receive $1.1 billion in GSA ($3,183/pupil) with $704 million (or 64%) coming from the Poverty Grant component of GSA and the remainder coming from the Foundation formula which is primarily driven by EAV.
2. Crystal Lake D-47 will receive $8.8 million in GSA (only $1,246/pupil) with $1.0 million (or 12.5%) sourced from the Poverty Grant formula and $7.8 million from the Foundation component which is driven by EAV.
The GSA formula is structurally designed to more heavily weight funding to the Poverty Grant component based on DHS Low Income counts.
Therefore, the big winners in GSA funding will be democrat controlled cities (i.e. Chicago, Waukegan, Rockford, Elgin, etc.) given their high DHS Low Income counts.
Combine the GSA funding disparity with Chicago’s large EAV base and all the other funding Chicago receives from the State for categorical reimbursement and Federal sources, and you get a massive contrast in educational spending between Chicago and a suburban district.
Per ISBE, Chicago spends $9,778 per pupil on “Instructuctional Spending” alone.
Contrast that against local unit district’s spending rates of $4,879/pupil for Huntley 158 and $6,593 for Woodstock 200.
And this funding disparity will only grow worse as the legislature continues its efforts to modify state funding legislation to “re-distribute the wealth” away from the suburbs and send it over to Chicago, Waukegan, Rockford, etc.
For my district, Cary #26, we’ve spent years driving our operating cost structure down with the expectation that we’ll have to fund operations primarily on local resources.
ISBE has already scored several proposals over the last couple of years, and I don’t think too many McHenry County districts avoid a painful hit.
Considering McHenry County is considered a “wealthy” county, I believe the District 26 assumption that we are on our own for school funding is a good one.