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Cook County's Broken, Racist, Rigged Property Tax System

The Tribune states it plainly in its remarkable series on Cook County's property taxes and the broken - some would say rigged - system run by Assessor Joe Berrios (and his predecessors):

"Cook County failed to value homes accurately for years. The result: a property tax system that harmed the poor and helped the rich."

That's not an opinion. It's a reported conclusion - one that seems irrefutable.

Now, what are we gonna do about it?


"Chicago has long been a city divided by race and class, a metropolis with starkly different crime rates, economic realities and educational opportunities depending on where you live. But there's another division in Chicago and Cook County, one that for years has gone unexamined even as it pits rich against poor."

Emphasis mine.

"An unprecedented analysis by the Tribune reveals that for years the county's property tax system created an unequal burden on residents, handing huge financial breaks to homeowners who are well-off while punishing those who have the least, particularly people living in minority communities."

This is the definition of institutional racism. (Paging the Tribune's commentariot.)


"Assessor Joseph Berrios has resisted reforms and ignored industry standards while his office churned out inaccurate values. The result is a staggering pattern of inequality."

That would be the same Joseph Berrios who is chairman of the Cook County Democratic Party - and friend of such local stalwarts as Toni Preckwinkle. What sayeth you now, Toni?


"Among his strongest allies: Illinois House Speaker Michael Madigan and Ald. Edward Burke, both property tax lawyers who benefit from the county's broken system."

Here's who else props Berrios up - and/or vice versa.


"From North Lawndale and Little Village to Calumet City and Melrose Park, residents in working-class neighborhoods were more likely to receive property tax bills that assumed their homes were worth more than their true market value, the Tribune found.

"Meanwhile, many living in the county's wealthier and mostly white communities - including Winnetka, Glencoe, Lakeview and the Gold Coast - caught a break because property taxes weren't based on the full value of their homes.

"As a result, people living in poorer areas tended to pay more in taxes as a percentage of their home's value than residents in more affluent communities. Known as the effective tax rate, the percentage should be roughly the same for everyone living in a single taxing district.

"But the Tribune's analysis shows the rates became skewed in favor of wealthier residents."

I don't ever want to hear the rich complain about taxes again.


"The assessor's office says it does not check its own work for fairness and accuracy, as is standard practice for assessors around the world.

"So the Tribune stepped in, compiling and analyzing more than 100 million property tax records from the years 2003 through 2015, along with thousands of pages of documents, then vetting the findings with top experts in the field. The process took more than a year."

This is a phenomenal piece of journalism.

"The conclusion: Residential assessments have been so far off the mark for so many years that the credibility of the entire property tax system is in doubt."


"Berrios, who took office in December 2010, declined to be interviewed for this series."

Declined is such a polite word. Say "refused." In fact, say "refused several requests to sit for an interview and answer questions we wanted to ask on behalf of taxpayers. His refusals occurred on the following days and in the following forms . . . "


"But through an interview in September with top aide Thomas Jaconetty, and then in written statements in 2017, the office defended its assessments as fair and accurate and said it strongly disagreed with the Tribune's findings.

"'The (Cook County Assessor's Office) believes the valuation and uniformity opinions formed by the Chicago Tribune are not sufficiently credible,' the office said in a statement."

Not good enough, Jaconetty.


"Jaconetty stressed that residents who believe their property is overvalued have the option to appeal - and are encouraged to do so.

"But when the Tribune partnered with the University of Chicago's Harris School of Public Policy to study appeals filed by homeowners, the paper found that the process makes an already unequal system even less fair."



"In defending the office, Jaconetty also noted that under Berrios the county has sent out property tax bills on time, which hadn't been the case for about 35 years."

At least we send out our rigged bills on time!


"Because of this, officials say, local governments saved millions in borrowing costs for loans used to tide them over until property taxes come in."

Fact check, please.


"But that timeliness came as accuracy suffered. Since 2009, the Tribune found, Cook County's assessments have been so inaccurate they violated standards set by the International Association of Assessing Officers, a professional organization that develops guidelines used around the world."

Link mine.


"Areas of the city where gentrification had taken hold saw values come in low, while homes just outside those neighborhoods were more likely to be overvalued. Small apartment buildings in the trendy eastern parts of Humboldt Park and Logan Square were likely to catch a break while many on the west sides of the neighborhoods got hammered.

"Bungalows in the far south suburbs of Chicago Heights, Lynwood and Ford Heights were far more likely to be overvalued while luxury homes in Wilmette and Winnetka were undervalued, some by as much as half."

Pick your cliched response:

A) The system works.

B) A feature not a bug.


Yes, Bruce Rauner, we need property tax reform! And that means you'll pay more!


"By comparing sale prices to property tax bills, the Tribune and the University of Chicago calculated the effective tax rate for Chicago and found it differed widely by neighborhood between 2009 and 2015, even though the rate should have been roughly the same for everyone.

"For example, the average effective tax rate in North Lawndale and Little Village was around 2 percent - about two times higher than in wealthier areas like the Gold Coast and Lincoln Park."

Berrios wouldn't say how his office arrived at its figures.


This reporting was done by Jason Grotto, John Chase and David Kidwell. Grotto is joining ProPublica Illinois, while Chase and Kidwell are now at the BGA.

Major losses.


From Part 2 of the series:

"Working with the Center for Municipal Finance at the University of Chicago's Harris School of Public Policy, the Tribune examined appeals on more than 2.7 million residential parcels and found that, in every year from 2009 to 2015, the industry's statistical measures of fairness got worse after the appeals process.

"That inequity has placed a financial burden on those who can least afford to pay more, the U. of C. study found. On average, even after appeals, people who own homes in the bottom 25 percent of values paid nearly $500 more a year in property taxes than they would have if the system were fair, the research shows.

"The reason: Wealthier neighborhoods appealed at much higher rates and regularly received significant assessment reductions even though homes in those areas were more likely to be undervalued. In poorer neighborhoods, homeowners not only are more likely to have their properties overvalued by the assessor, they are less likely to appeal."


"'You can't blame the people who appeal,' said U. of C. professor Christopher Berry. 'They are just responding to the incentives that the system gives them. But that system effectively transfers the tax burden onto those who can least afford it while giving a break to those of greater means. It's a textbook example of institutional racism.'"

Emphasis mine because Zorn.


"The system doesn't just help those in higher-priced homes. It has created a lucrative business for tax attorneys and given a political boost to Berrios.

"In 2015, when appeals hit an all-time high, records show that attorneys' fees from residential appeals totaled roughly $35 million, triple the amount in 2003. Many of these lawyers have helped fill the campaign coffers of Berrios, who is also chairman of the Cook County Democratic Party and committeeman of the 31st Ward Democratic Organization."

And don't forget, Michael Madigan is the chair of the Illinois Democratic Party. The Democratic Party in Illinois (still) has a lot to answer for.


"Berrios controls three active campaign accounts where he's raised more than $5 million since 2009, an unprecedented amount for an assessor. More than half of it came from tax attorneys and related businesses, a Tribune analysis of campaign data found."

How is such a clear conflict-of-interest even legal?

Dear Bruce Rauner: Campaign finance reform is far more important than term limits.


From Part 3 of the series:

"For more than a decade, the Cook County assessor's office hid a secret inside the massive computer programs used to calculate property tax assessments for single-family homes.

"It didn't look like much - just a few snippets of code amid thousands of lines - but it created erroneous valuations for homes throughout the county, affecting the tax bills sent to more than 1 million residential property owners every year.

"What the code did was deceptively simple: It decreased every estimated home value in the county by about 40 percent, a troubling practice that ignored legal requirements set out in county ordinances.

"The artificially low values threw the property tax system so far out of whack that it may have violated provisions of the state constitution. But, shrouded by an opaque and convoluted assessment system, these widespread inaccuracies were invisible to the average homeowner.

"The Tribune already has revealed how the county's assessment system under Joseph Berrios has been riddled with errors that punished the poor while providing breaks to the wealthy.

"Now the investigation shows that the assessor's office knowingly produced inaccurate property assessments during the long tenure of his predecessor, James Houlihan, and even as far back as the 1980s."

Remarkable journalism.

But I'd like to see a Part 4: What is the Democratic Party going to do about it?


Comments welcome.


Posted on June 12, 2017

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