December 22, 2022
After a record-setting delay, tax year 2021 tax rates have been released and second installment tax bills have been sent out with a Dec. 30, 2022 due date. Per State statute, second installment tax bills are supposed to be due Aug. 1. The last time tax bills were due as late as December was in 2010 for second installment 2009 tax bills, which were due Dec. 13, 2010.
The tax year 2021 due date is so late that the next property tax bills for first installment 2022 property taxes, which usually would be payable March 1, 2023, could be shifted to April 1, 2023, per legislation that is awaiting the Governor’s signature. There has been much infighting between the numerous elected officials who administer Cook County’s property tax system about which official is to blame for the lateness of the bills this year. However, this blog post will focus on the tax rates and the reassessment of the Chicago triad, whose impact is reflected in the bills due at the end of this month.
The Cook County Clerk’s office released the 2021 Tax Rate Report on Dec. 5, 2022. The report lists property tax rates for all of the taxing districts in Cook County and provides average composite rates for municipalities. The composite rate is the total tax rate that appears on a tax bill The report and accompanying press release also provide some historical context and analysis of changes to tax bills, the property tax base and differences in changes between different classes of property.
Properties in Cook County are reassessed in a three-year cycle, based on whether the property is located in Chicago or the north or south suburbs of the County. Chicago was last reassessed in 2018 before the 2021 reassessment. The total equalized assessed value of property in the City of Chicago (the taxable value of property) was $96.9 billion in tax year 2021, up by over 8% compared to 2020. Total property taxes billed in Chicago also increased by nearly 6.5% in tax year 2021 over the prior year, to $7.7 billion. However, the composite tax rate in the city declined by 3.1%, to 6.697%, due to a higher increase in taxable value than the increase to the property tax levied by the local governments that tax properties in Chicago.
As has been noted many times on this blog, it is impossible to predict how the changes above will impact any individual property. However, both the Clerk’s Office and Cook County Treasurer’s Office have produced analyses of changes to residential and commercial properties by ward and community area of Chicago, which provide a window into the differential impact across the City of both the reassessment and property tax levies by local governments.
According to the Clerk’s Office, the percentage increase in the tax bill was 8.86% for an average residential property in northern Chicago, 4.1% in central Chicago and 5.63% in southern Chicago.
In comparison, the tax bill for the average commercial property decreased by 0.41% in northern Chicago, increased by 3.32% in central Chicago and decreased by 1.4% in southern Chicago.
The Cook County Treasurer’s analysis of property taxes billed in tax year 2021 showed that more than 406,000 residential tax bills increased in tax year 2021, while nearly 318,000 decreased. For Commercial properties, more than 32,000 tax bills increased and nearly 37,000 decreased.
The following charts provide 30 years of context for the composite property tax rate in the City of Chicago. The first shows the change in property tax rates since 1990 and the second shows the property tax extensions, or the amount of money a government asks taxpayers for annually, for the primary governments on a City of Chicago property tax bill. Property tax rates fell significantly starting in the early 1990s despite growing tax extensions for several governments because the overall value of property increased faster than the amount of taxes requested by the governments. That trend reversed starting in 2010 with the decline in property value associated with the financial crisis and Great Recession. Since 2013, the composite property tax rate in Chicago has been relatively flat as significant tax rate increases from the City of Chicago and the Chicago Public Schools, enacted to help pay for pensions, have been offset by growth in the taxable value of property in Chicago.
The following chart shows how the amount of money levied by local governments have grown since 1990. The increases to the property tax levies for the City of Chicago and Chicago Public Schools referenced above can be seen in 2015 for the City and 2017 for CPS.