'Most people’ benefit from overhauled assessment system, Kaegi says in reelection pitch
Sunday, November 28, 2021
The Daily Line
by Alex Nitkin
Three years after Cook County Assessor Fritz Kaegi rode into office on a promise of reform and predictability, he’s facing a primary challenger trying to capitalize on what she’s calling three years of tumult and confusion.
Metropolitan Water Reclamation District President Kari Steele said in her campaign launch video that Kaegi has been “long on promises and short on results” and that he’s failed as a “competent manager,” pointing to a recent Sun-Times investigation into the office’s senior freeze exemption program.
But underneath the bad headlines, Kaegi argued in an interview on The Daily Line’s CloutCast podcast that he has delivered on the core promise of his 2018 campaign: to assess high-end properties at their real values, easing the tax burden on everyone else.
“Let’s look at results, and what’s in people’s property tax bills,” Kaegi said. “This was the first year that the median residential property tax bill fell in the city of Chicago for close to a decade.”
Related: South-suburban businesses slammed by property tax hikes as some homeowners’ bills sag: report
He credited his mission to correct “artificially low valuations” in downtown office buildings so that they are “in line with the market just like everyone else, and that’s making a meaningful difference in the property tax bills people paid.”
Kaegi has long argued his new valuation system is only trying to peg properties closer to their true values. And now the assessor is pointing to two new studies that he says back him up.
The International Association of Assessing Officers published a report earlier this month that found Kaegi’s assessments of Chicago’s north and northwest suburbs in 2019, his first full year in office, were closer to the mark than they were under his predecessor Joseph Berrios. And an investigation of 35 downtown commercial buildings by Crain’s last month found that Kaegi’s assessments actually came in below their appraised values in most cases, defying the conventional wisdom that downtown buildings are being unfairly gouged under the assessor’s system.
“That’s the kind of validation that I think will keep continuing to come, and it’s the culmination of three years of work,” Kaegi said. “People object to…having their assessment go up, that does not feel good — but I don’t see people disputing the valuation marks that we’re using in terms of being accurate.”
Kaegi’s re-tooled assessments have been assailed by commercial real estate interests, and groups like the Building Owners and Managers Association of Chicago have warned that shifting more tax burden onto commercial properties could be the death knell for many businesses that have struggled through the COVID-19 pandemic.
But their prophecies of doom have not come true, Kaegi said.
“We’re seeing a pretty robust investment environment out there among a bunch of different asset classes,” he said. “Cranes are returning, capital is flowing…the apartment business is quite healthy in terms of construction, and all the other fundamentals. If you look at industrial, it’s the same.”
Kaegi chided his critics in the commercial real estate industry as “working the refs,” saying many just miss the better deals they were able to cut under his predecessor’s widely panned system.
“There are building owners who definitely don’t want to pay more because they might have been getting a really good deal under Berrios,” the assessor said. “They will point to a whole bunch of reasons as to why not to change assessments from the way things were under Berrios, and I think we all need to evaluate those arguments critically.”
He added that many businesses have actually benefitted from his new system.
“If we are undervaluing the biggest buildings, you are putting additional burden on small businesses,” Kaegi said. “What we’ve really tried to remind everyone is that our guide is to identify what the market values for these properties are. Most people will benefit from that being done, including small businesses.”
Kaegi also pointed to a variety of new digital tools his office has introduced, including allowing homeowners and property tax attorneys to file appeals online.
But the tech upgrades have come at a cost.
Assessments of Chicago properties are months behind schedule this year, stoking fears of late property taxes in 2022 that could rip open revenue shortfalls for the county’s thousands of taxing bodies. But Kaegi downplayed the delay, calling it “unavoidable” as the county switches over to a new tax assessment software developed by Tyler Technologies.
He also predicted that come Election Day, voters will understand the lag.
“We think that the public, to the extent that they care about the inner-workings of our modernizations, they want it modernized,” he said. “They want better services. I think a lot of the distrust of the office has to do with antiquated systems that didn’t build faith.”
Kaegi has repeatedly and publicly sparred during his term with the Cook County Board of Review, which has radically lowered many of his office’s assessments on big businesses. But he vowed not to get involved in the Board of Review races underway for next year, saying it would be a “conflict” since the board’s role is to be an “independent” check on his office.
Related: Board of Review cuts big breaks for commercial owners, bucking Kaegi’s assessments again
Board of Review Comm. Tammy Wendt (D-1), Comm. Michael Cabonargi (D-2) and Comm. Larry Rogers (D-3) all face reelection next year.
Related: Kaegi’s transformation of tax assessments looms over contentious Board of Review primary
Kaegi is running for reelection on the same slate as all other countywide elected officials, including county board President Toni Preckwinkle, whom he called “the best county board president we’ve ever had.”
He said he will also make selective endorsements in Board of Commissioner races, including supporting Metropolitan Water Reclamation District Comm. Josina Morita and Hazel Crest Mayor Vernard Alsberry to succeed retiring county Comm. Larry Suffredin (D-13) and Comm. Deborah Sims (D-5), respectively.
“This county board is very strong,” Kaegi said. “We love the skills they have, and it’s a pleasure to work with them.”