Assessment errors lead to an extra tax appeal period
By Ali ElSaffar, Oak Park Township Assessor
As a result of errors in the assessment process related to the coronavirus pandemic, taxpayers in Oak Park, River Forest and Riverside Townships (“the three Townships”) will have an extra opportunity to file property tax appeals this year.
In an ordinary year, local taxpayers have two main opportunities to file appeals—first with the Cook County Assessor’s office, and then with the Cook County Board of Review. This year is different, however, because the county assessor’s office made more than 5,000 mistakes in processing appeals for the three Townships. These errors, which impact 17% of Oak Park properties, 23% of River Forest properties, and 12% of Riverside properties, did not come to light until after the Board of Review’s filing deadline.
To address this problem, the Cook County Assessor’s office first corrected the mistaken assessments, after which the Board of Review re-opened an appeal period for all property owners in the three Townships. The new appeal deadline is November 1.
In February, the county assessor’s office sent reassessment notices to the three Townships. The mailing of these notices kicked off an appeal period in which property owners could appeal the new proposed assessments.
When pandemic-related shutdowns began in March, unemployment started rising. The county assessor’s office assumed this would lead to significant declines in property values, as happened in the 2008 housing crisis, and decided to reduce the value of all residential properties and most business properties in Cook County.
For homes and condominiums, the plan was to issue a Covid factor that would reduce their assessed values by 8% to 12%, with the precise reduction depending on the estimated increase in unemployment in a particular neighborhood. Since property owners in the three Townships received reassessment notices before the pandemic, their appeals would first be processed using normal criteria, after which the Covid factor would be applied.
Why were there 5,000 errors? The Assessor’s office did not apply the Covid factor uniformly. Most properties got the full Covid reduction, but those that filed successful appeals typically received only partial Covid reductions. The corrections will apply full Covid reductions to the properties that received partial reductions.
If my Covid reduction factor is 8%-12%, does that mean my taxes will fall by 8%-12%? No! Property taxes are driven by the tax levies of school districts, municipalities, and other taxing districts, and neither the Cook County Assessor nor the Board of Review has the power to reduce those levies. The authority of these agencies is instead limited to determining the correct value of properties, which ultimately determines their share of government tax levies.
If an individual property’s assessment fell by 8%-12% in an ordinary year, the resulting tax reduction would be similar to the assessment reduction. The tax reduction would be offset by a slightly higher property tax rate on all properties in the community, which would ensure that local governments receive all the revenue they are entitled to.
Across-the-board Covid reductions, however, will have a much greater impact on tax rates than an individual assessment reduction. Indeed, the Covid reduction will cause tax rates to rise by about as much as assessed values fall (although rates will also be impacted by other factors). The result will be little or no savings for most taxpayers due to the Covid reductions.
To get tax savings this year, assessed values generally have to fall by more than the 8%-12% Covid reductions. But when the county assessor mistakenly gave smaller Covid reductions to taxpayers who filed successful appeals, it appeared that property owners who proved they deserved tax relief would not get it. To counteract this, the 5,000 corrections were made.
What if I already filed an appeal with the Board of Review? Appeals previously filed with the Board of Review will be processed, so it will not be necessary to refile your appeal. But it will be possible to submit supplemental evidence if you receive a corrected assessment from the county assessor.
The real estate market seems to be doing well despite the pandemic. Why were assessments reduced? Ordinarily, assessors observe the real estate market and attempt to align assessments to the market. The Cook County Assessor’s office, however, did not follow this practice when determining Covid reduction factors.
Instead, the county assessor’s office assumed that virtually all property values would fall during the pandemic. Market data, however, indicates that the office’s assumptions about home values were wrong. Thus far in the pandemic, these values have mostly been stable in the three Townships and elsewhere.
What impact will all this have on the property tax system? There is a good chance that second installment tax bills next year will be late. Second installment bills cannot be issued until the Board of Review resolves every appeal in Cook County, and the significant delays in processing appeals in the three Townships and elsewhere will make it difficult for the Board to finish its work on time.
In addition, the fact that the market did not decline in the manner anticipated by the Covid reductions undermines tax fairness. A fair tax system requires that properties with higher market values pay a greater share of the tax burden, and properties with lower values pay smaller shares. But the large number of below-market valuations brought about by Covid reductions has clouded the standard for determining fair assessments.
Release Date: October 12, 2020