When Cook County homeowners get their property tax bills in about a week, most will owe more than last year despite continuing decreases in their assessed property values, experts said Tuesday.
Taxpayers often don't understand a simple truth that governs the complicated property tax system: Unlike sales and income taxes, property taxes are designed to collect a fixed amount of money, whatever the market fluctuations.
"Just because the values dropped does not mean taxing districts are going to be getting less money or taxpayers are going to be paying less," said Bill Vaselopulos, who is in charge of tax rate calculations for Cook County Clerk David Orr. "As values drop, (they are) offset by the increase in the tax rate."
On Tuesday, the clerk released the tax rates for village halls, libraries, park districts and other agencies throughout the county. The information is used to calculate property tax bills, which are expected to start going out this weekend and are due Aug. 1 — the earliest payment deadline in 34 years.
Some homeowners might be hard-pressed to make good, because it will be the third property tax bill they've received in nine months, said Myer Blank, a former city tax expert who works for a tax consulting firm.
Other taxpayers will be "shocked" at the increase in their bill, especially if their home values did not decline as much as others, he added.
"It's not how much your assessment drops, but it's how much your assessment changes in relation to other taxpayers," Blank said. "If your value isn't dropping and your neighbor's value is dropping, you're going to pick up a greater share of the tax burden."
Overall, government throughout the county is asking taxpayers for only a half-percentage-point more, but individual bills will vary significantly depending on a variety of factors.
Those include the property's location, how it has fared in the marketplace compared with others, the status of tax exemptions and whether the land lies in a special taxing district. In the suburbs, voters in some areas might have recently approved a tax hike that will be reflected on bills.
In general, though, Chicago homeowners can expect a harder hit than their suburban counterparts. That's because of a 1.2 percent overall increase in property taxes billed throughout the city and the phasing out of an increased homeowners exemption originally designed to soften the blow of rising home values before the economic downturn. The maximum city exemption will decrease by $4,000, to $12,000.
"What that creates is a shift from commercial (and) industrial properties back to residential properties," Vaselopulos said. In the north suburbs, the maximum exemption also will drop by $4,000, to $16,000. And in the south suburbs, it will be $20,000.
Assessed property values fell to about $152 billion, or nearly 11 percent, throughout the county. The biggest decreases were in the south suburbs, which were reassessed last year and posted a 17.5 percent decline, to less than $29 billion.
In the north suburbs, the total assessed property values dropped to about $48.3 billion, a decrease of about 10 percent. And in the city, the values declined to $75.1 billion, or about 8.5 percent.
This year, properties are being reassessed in the city, but those changes won't have any effect on bills until next year. Suburbs north of North Avenue were reassessed two years ago.
Tax rates, meanwhile, were lowest in the city, where they were set at about 5.5 percent of a property's assessed value. The city has a lower rate in part because of the higher property values and because there are more commercial properties.
The highest tax rates were in the south suburbs, where property values are much lower. Topping the list was Ford Heights, where the rate was about 27.2 percent of assessed value.
Assessed value is not the same as market value. This year, it's equivalent to about 30 percent of the price a home would fetch on the open market.