Board of Review ‘defense’ unit helped save taxing bodies $138M in 2019: Report
Friday, February 19, 2021
The Daily Line
by Alex Nitkin
The Cook County Board of Review is known for encouraging county property owners to dispute their tax assessments in the hopes that they’ll get a break on their annual bills. But a small, relatively new sector of the office has done the opposite, fighting to stymie tax appeals, and the board says they’ve saved local governments millions as a result.
The board’s Property Tax Appeal Board Defense Unit, launched in 2017, dedicates about 15 lawyers and clerks to disputing appeals from property owners who believe the board — and the Cook County Assessor’s Office before them — set their assessments too high.
Those taxpayers took up their complaints with the Illinois Property Tax Appeal Board (PTAB), which denied $138 million in total appeals from Cook County taxpayers in Fiscal Year 2019 — in part because of the Board of Review defense unit’s efforts, according to an annual report published this week.
Between 7 and 10 percent of Board of Review decisions are hauled up to the state appeals board each year, officials said. During Fiscal Year 2019, that meant about 22,000 appeal dockets.
The county Board of Review and state appeals board both serve similar functions, but they differ in how their tax relief affects the municipalities and school districts that that rely on property taxes to feed their budgets.
The county assessor’s office and Board of Review “right-size the pie” of tax levies by redistributing tax burdens among properties, shaking out to a zero-sum effect for the taxing bodies, Board of Review Comm. Michael Cabonargi (D-2) said. But because PTAB appeals take longer to work out, reductions granted by the state board compel local governments to issue refunds.
“PTAB exposes schools, libraries and other local units of government to loss liability unless somebody is protecting that property tax base,” Cabonargi told The Daily Line on Wednesday. “Sometimes we’re litigating, oftentimes we’re settling, but what we’re doing is engaging early enough to protect the tax base.”
In the four years since Cook County Commissioners approved the launch of the new defense unit, the Board of Review has claimed credit for saving taxing bodies across the county — including the city of Chicago, Chicago Public Schools and the county itself — at least $422 million from potential refunds. The sum does not take into account appeals from the 2020 tax year, which are still snaking through the county and state appeals systems.
At an approximately $1.4 million annual budget, the defense unit represents a “relatively small investment that pays off in a larger way,” Cabonargi said.
Another $548 million in potential refunds from county taxing bodies remain on the table for PTAB’s consideration, according to the Board of Review report.
The Board of Review’s annual report also included the following findings:
- The success rate for property owners filing appeals with the Board of Review has gradually declined during the past decade. In 2010, 67.3 percent of appeals to the board resulted in assessment reductions. But in 2019, just 54 percent of appellants scored relief from the board.
- Property owners who filed their own appeals in 2019 saw slightly more success than those who hired property tax attorneys. About 55 percent of the 148,332 attorney appeals resulted in assessment reductions, compared to 60 percent of pro se appeals.
- Of the approximately 253,000 property owners who filed appeals in 2019, more than 80 percent owned single-family homes. Another 12.8 percent owned commercial properties, 6.7 percent owned condos and less than 1 percent owned vacant land.
Total appeals down this year, but hearings and commercial appeals up
The report shows that the Board of Review faced steady increases in appeals for six years, from 162,000 appeals filed in 2014 to 253,000 in 2019. But that trend reversed in 2020, when the total volume of appeals dipped to about 223,000 its lowest tally since 2016.
Related: Board of Review tax appeals dipped amid pandemic after consecutive years of record-breaking volumes
The decline was driven by a nosedive in residential appeals, which sank from about 204,000 in 2019 to less than 176,000 in 2020, according to board data. At the same time, commercial appeals ticked up to 34,432 in 2020 from 32,414 in 2019.
Thousands of homeowners got automatic breaks on their assessments last year thanks to Assessor Fritz Kaegi’s “COVID factor” adjustment, which predicted the pandemic would diminish home values. Kaegi’s office saw sharp declines in both residential and commercial appeals last year.
Related: Tax appeals to Kaegi’s office plummeted last year as Board of Review braced for record workload
At the same time, owners of hard-hit properties like hotels, restaurants and movie theaters have cranked up their efforts to seek relief from the Board of Review, according to board Chief Deputy Commissioner William O’Shields. Requests for administrative hearings at the Board of Review jumped by about 30 percent between 2019 and 2020, officials said.
“We’re hearing a lot of arguments from commercial and industrial owners centered on COVID, and how the stay-at-home order impacted their business operations,” O’Shields said Wednesday. “You have a lot of folks who feel those arguments can’t be made in the [written] pleadings alone.”
Political hiring probe grinds to stalemate
As board staffers work overtime to finish adjudicating appeals before tax bills are sent out this summer, the office continues to face pressure from Cook County Independent Inspector General Patrick Blanchard, who issued a report last year finding that the Board of Review “maintains a custom and practice of reliance on political factors” in hiring.
Unlike multiple other county offices, the board has not been targeted by the 51-year lawsuit by anti-patronage attorney Michael Shakman. But Blanchard wrote that the board “does not have a hiring process that is uniform, codified or transparent,” leaving it open to clout-based personnel decisions, and the watchdog listed seven recommendations to reform the office.
The board has since implemented “many” of Blanchard’s recommendations, including by writing a new ethics policy and working to update the office’s “way outdated” job descriptions, Cabonargi said.
“We haven’t heard anything from [Blanchard] since last year, and I don’t expect to,” the commissioner said. “We’ve responded to him, and we’ve never fought him at any step of the way. We always engaged with him.”
But the watchdog won’t be satisfied until all its recommendations are at least publicly addressed by the board, Blanchard told The Daily Line.
“The Board of Review has failed to specifically respond to each of our recommendations, which they’re required to do,” Blanchard said. “A proper resolution in our case would be a clear answer. The board doesn’t need to adopt all our recommendations, but if there are any they’re not adopting, they need to say why not.”
Blanchard’s office has kicked the matter to the Cook County Board of Commissioners’ Finance Subcommittee on Litigation, in accordance with county rules.
County Comm. Peter Silvestri (R-9), who chairs the subcommittee, said he plans to invite leaders of both offices to make their cases during a meeting scheduled for Wednesday.
Blanchard “makes the case for certain things not having been done and the Board of Review believes they have been done, so the question is, who’s correct?” Silvestri said Wednesday. “So we’ll have to take a look at it in the meeting.”