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Changes coming to Cook County assessor’s office
Thursday, August 01, 2019 Chicago Daily Law Bulletin by Erica Minchella
In my last column, I suggested that if a version of Senate Bill 1317 passes, it might cause attorneys to leave the practice of real estate transaction law.
After researching the reforms being brought to the office of the Cook County assessor by Fritz Kaegi, I can’t help but wonder if the need for real estate tax appeal lawyers might be severely curtailed.
Kaegi has brought substantial changes to the assessor’s office, including not only the means and methods for determining assessed values but also instituting ethical rules for both the employees of the office and the attorneys who practice before the office.
One of his first acts was to proposed legislation — House Bill 2217, the Data Modernization Act — which did not pass in the last legislative session. The act would require owners of income-producing property to submit income and expense data related to the property. This information is required for the appeal process, so the intent is to value the property based not only on the appraised value of the land and improvements, but also on the revenue generated from the property as well as the expenses chargeable against it.
It is expected that it will provide for greater accuracy and efficiency and will produce better data to facilitate investment in Cook County.
If the data that is needed for an appeal is provided upfront, will there then be a need for or basis for appeal?
Tax appeal attorneys are concerned the information is not necessary for owners that are not intending on appealing their taxes. Additionally, its use as a device for determining capitalization rates is misplaced because Kaegi is seeking to use capitalization rates common to the mortgage and banking industry — rates that have no bearing on smaller structures.
The effect is to create such huge increases in assessments that it may either make no sense for investors to own properties in Illinois, or it will make rentals too expensive for tenants. While Kaegi is hoping to move the tax burden from homeowners to commercial owners, the impact may create unintended consequences.
The assessor’s office will be publishing the methods and codes for how values are derived. They are releasing their assumptions for commercial assessments so there is a basis for relating those assumptions to reality.
The fact that assessments may be going up doesn’t necessarily mean that tax bills will go up commensurately, because the way the rate is shared in a township may cause the tax to stay the same, or go up or down depending on how many properties are sharing that tax rate.
If there is a published formula and the formula is followed, where is the basis for appeal? The requirement under the law is to assess properties uniformly without bias. The analysis will be based on market prices built on data, not preconceived outcomes.
If there is less room to appeal and if there are fewer attorneys appealing taxes, will property tax appeal judges be needed? The implications could be far-reaching on more than merely taxpayers.