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Cook County Assessor’s Covid19 Adjustments and Its Real Effects on Taxpayers

The Cook County Assessor Fritz Kaegi has been sending out notices to taxpayers, particularly, residential homeowners and owners of apartment buildings of less than seven units.  A number of clients and attorneys have asked our attorneys the meaning or effect of these notices on their property taxes which become payable next year.  In response to those questions, we offer the following explanation:

The Cook County Assessor’s job has the responsibility to assess all properties in Cook County as of January 1st of the tax year (the “lien date”) in a fair and uniform manner.  The Assessor’s role is often to analyze market data and base their valuations and assessments on that meta-data on a more macro-level, looking back at the data preceding the lien date.

In April 2020, only a couple of months into the pandemic and after the valuation date of January 1st, the Cook County Assessor Kaegi, contrary to statutory authority, made a decision to issue “Covid19 adjustments” to all residential property owners and some commercial property owners in order to provide some assessment relief to Cook County property owners.  Illinois Governor J.B. Pritzker issued his stay-at-home Executive Order 2020-10 on March 21, 2020.  Kaegi’s action for single-family homeowners has meant assessment reductions of 7.5 percent in Lincoln Park, to as much as 12.3 percent in Franklin Park.  For property owners of two-flats to six-flats, Assessor Kaegi reduced assessments from 9.3% to 15.4%.

The basic answer to our clients and counsel as to the effect of these actions remains somewhat uncertain, but we are fairly certain that the tax bills will not be reduced by the same commensurate percentage as the downward adjustments to the assessments.

If homeowner’s assessments fall by the same percentage amount uniformly in relation to one another, as they have in most townships in Cook County, residential homeowners’ proportionate share of their obligation to paying the levied (budgeted) taxes in comparison to one another is not altered.  Thus, each property owner’s proportionate “piece of the pie” is no larger or smaller than their neighbors who received similar relief in a decreased assessment.

Basically, the township must levy (request) enough taxes to satisfy their taxing districts’ budgets (for schools, police, fire, park districts, libraries, pensions, etc.) which have been set prior to Assessor Kaegi’s Covid19 adjustments.  As a result, the Cook County Clerk’s Office will have to increase the local tax rates and set the County Equalization Factor as determined by the Department of Revenue to compensate for the overall decline in assessments.  In addition, tax rates may be raised even further to try to fill in the budgetary shortfalls caused by decreases in retail sales due to the Covid19 pandemic.

Contrary to the Assessor’s “knee-jerk” reaction to respond “politically” to the Covid-19 crises by reducing the market values of residential properties throughout Cook County, when the data comes out about the effects of the residential market subsequent to the Governor’s “stay-at-home” order issued at the end of March 2020, suburban home values have risen, not fallen as Kaegi had predicted.  Standard & Poor’s CoreLogic Case-Shiller reporting has concluded that an index of Chicago single-family home values increased 1.2 percent in August compared with the year-earlier period.  Assessor Kaegi’s office has stated publicly that with a scarcity of data in April that he based his adjustments largely on unemployment data from the most affected areas of Cook County.  The higher the unemployment rate, the higher the Assessor’s downward Covid19 adjustments.

What is more clear than the effects of Assessor Kaegi’s adjustments to homeowners and small apartment building owners is that the Assessor has undergone a grossly, over-reaching policy, contrary to the Assessor’s statutory authority, to grant relief which is not reflective of the current and appreciating residential market and will not, necessarily lead to lower overall property tax bills.