Cook County property owners located in a tax increment financing district will now see how much of their tax bill is going into a TIF fund, Cook County Clerk David Orr announced Thursday as he released the 2013 tax rates.
“When tax bills arrive soon in mailboxes, more than 200,000 property owners will have a TIF line item that details the amount they are paying into a TIF fund,” Orr said. “As a longtime advocate for TIF transparency, I’m pleased that this enhancement means tax bills will accurately reflect property owners’ true distribution of tax dollars.”
Previous tax bills identified properties within a TIF, but did not show the tax amount and directed property owners to use the Clerk’s online TIF tool for more information. Now, the second installment tax bill displays the amount and percentage of the total bill diverted to the TIF fund.
For example, a commercial property in the Melrose Park-Mid Metro Industrial TIF district has a total 2013 tax bill (payable in 2014) of $32,936.20. Of that, $6,422.56, or 19.5 percent, goes to the TIF. In another example, a Chicago homeowner living in the 43rd/Cottage Grove TIF will pay 84.9 percent of their $2,048.30 bill into that TIF fund.
“Tax calculations are complex and it took quite a bit of work to modify the bills,” Orr said. “This could not have been possible without my Director of Real Estate & Tax Services Bill Vaselopulos and the County’s Bureau of Technology.”
About 12 percent of all properties in Cook County are located in a TIF district. That means, about 220,000 tax bills will include the new TIF allocation, and 58 percent of those are residential properties.
Orr’s announcement of TIF data on tax bills coincided with the release of the 2013 property tax rates of more than 1,500 taxing agencies* in Cook County, which will be reflected in the tax bills due Aug. 1. Tax rates are calculated by using the amount of dollars levied by the taxing agency and the value of all taxable property located within its boundaries. Tax rates increased across the county, largely due to declining equalized assessed values (EAVs) and the equalization factor decreasing by 5.1 percent.
The City of Chicago’s composite tax rate increased 6.8 percent in 2013, while the equalized assessed value (EAV) of all property fell 4.4 percent from the prior year. Chicago residential tax bills on average will increase 0.5 to 1.5 percent.
The levy^ for all Chicago agencies combined increased 1.3 percent or nearly $45.9 million compared to 2012. However, all of the increase was concentrated on Chicago Public Schools, up 2.53 percent, and the Chicago Park District, up 1.63 percent. The City of Chicago and the City Colleges tax levies stayed flat.
“If values drop and levies remain flat or increase slightly, the rates go up,” Vaselopulos said. “That does not mean your tax bill will go up because the higher rate will be multiplied against a lower taxable value. And identical properties on the same block can have vastly different tax bills depending on their exemptions.”
In the northern suburbs, which underwent the triennial reassessment, the taxable value of property dropped on average 12.8 percent and tax rates increased 12 to 19 percent. The EAV in the south suburbs decreased 6.2 percent, but tax rates increased 8 to 11 percent. Changes to suburban tax bills vary widely due to the multitude of taxing districts. On average, bills will increase about 2 percent in suburban Cook County.
These percentages reflect township-wide reductions. Individual taxing districts’ EAV decreases may vary.
The equalization factor issued by the Illinois Department of Revenue is 2.6621 this year, down from 2.8056 last year. The Department calculates the factor needed to bring the total assessed value of all properties to a level equal to 33⅓ percent of the market value of all Cook County real estate.
Countywide, $12,109,281,010 was billed by all taxing bodies in 2013, up 1.02 percent from $11.98 billion in 2012.
The tax rate release completes a process that started last December when each local taxing district, as required by law, filed its levy with the Clerk’s office. Each levy represents the amount of revenue an individual taxing body has requested to collect from the property tax.
Under Illinois State Statute, each Cook County taxing body with a statutory fund rate ceiling has its levy adjusted to the maximum amount based on the statutory fund ceiling for the district and the previous year’s total EAV of property plus the value of any new construction, or the current year EAV – whichever is less.
This calculation can restrict the agency from receiving the full amount of its levy. Statutory rate limits apply to most categories of taxing agencies, but not to home rule units such as the City of Chicago and the County of Cook.
In accordance with the tax cap requirements of the Property Tax Extension Limitation Law (PTELL), the revenue that agencies may collect is further limited this year, in most cases, to a 1.7 percent increase over the prior year’s extension. Home rule agencies are exempt from this limitation. Next year, tax revenues will be limited to 1.5 percent more than the amount extended this year based on the Consumer Price Index (CPI) released in January, 2014.
“The reduced EAVs result in higher tax rates for the vast majority of taxing districts, but this does not necessarily cause higher tax bills and more money for taxing districts,” Vaselopulos said. “Districts continue to be limited by the CPI increase under PTELL.”
The Alternative Homestead Exemption, commonly known as the “7 percent assessment cap” is now phased out in Chicago and the northern triennial area. Residents of south suburban Cook enter their third and final year under the 7 percent cap; homeowners are eligible for a maximum exemption of $12,000 this year, down from $16,000 last year. But most exemptions in the southern area are at the minimum of 7,000 because of declining EAVs over the past few years.
Vaselopulos added that some homeowners continue to be eligible for a Long-Time Homeowner Exemption that can provide additional relief to income-eligible homeowners who have lived in their homes at least 10 years, or five years if the home was purchased under certain assistance programs. Under the program, qualifying taxpayers are not restricted to the maximum exemption amounts that would otherwise apply but would get varying benefits based on their qualifying income.
The Senior Freeze Exemption continues this year, limiting the growth in EAV to the base year, which is set when the property owner turns 65 years old and qualifies with a household income no greater than $55,000. Seniors are required to reapply annually for these exemptions in order to continue their eligibility.
A sample of how to calculate a tax bill is included in the report (page VI). The impact of suburban tax rates can be figured by substituting the sample suburban rate with actual suburban rates. To download the 2013 Cook County tax rates and to view reports showing levy and valuation detail by taxing district visit www.cookcountyclerk.com.
* A taxing agency or district is a body of government such as a school district, library or municipality, that levies real estate taxes.
^A levy is the amount of money billed by a taxing agency.