Many residents have been hit with large increases in their property tax bills. While a significant portion of the increase is due to District 65’s $14.5 million referendum that was approved on April 4, a significant portion of the increase for some property owners is due to the Assessor’s 2016 triennial reassessment of property in Evanston and in School Districts 65 and 202.
A reassessment or a change in a property owner’s Equalized Assessed Valuation does not increase the total amount of taxes levied by the taxing bodies, but it will generally either increase or decrease a property owner’s proportionate share of those taxes.
EAV, A Property Owner’s Share of Taxes
In February 2016, the Cook County Assessor issued the results of his triennial reassessment of the market value of properties in Evanston and School Districts 65 and 202. Cook County Assessor Joseph Berrios said the median market values of single family homes increased by 25.4% between 2013 and 2016, and by 20.8% for condominiums.
Property owners had an opportunity to challenge the reassessed value of their homes.
A market value is the starting point in computing an Equalized Assessed Value (EAV) of a property. An Assessed Value of a property is 10% of its market value. The EAV is determined by multiplying the Assessed Value by a State Equalizer (which is the same for all property in Cook County).
An individual property owner’s proportionate share of taxes levied by a taxing district (such as the City of Evanston, or School District 65) is, in essence, equal to the property owner’s EAV divided by the total EAV in the taxing district.
In 2016, the total EAV of all properties in both the City of Evanston and in School Districts 65 and 202 (which includes all of the City of Evanston and a portion of Skokie) increased by 21.6%, according to records provided to the RoundTable by the County Clerk’s Tax Extension Unit.
In theory, if a property owner’s increase in EAV was less than 21.6%, his or her proportionate share of taxes levied by the City and the School Districts would go down. Conversely, if the increase was more than 21.6%, his or her proportionate share of taxes would go up.
“I always tell people you look at the median increase, and if you’re above the median you’re going to pay more, and if you’re below the median, you’re going to pay less,” Cook County Commissioner Larry Suffredin told the RoundTable.
“What I’ve been finding when people call me is the people who got the biggest increases are those who, for the most part, didn’t appeal to the Assessor and the Board of Review last year when the reassessment came out,” Mr. Suffredin said. “I always preach you need to appeal twice a year to protect your relationship to the overall value of properties. If you do not appeal, you’re really at the whim of other people.”
If a lot of people obtain reductions in assessed values, it has the effect of reducing their proportionate share of taxes and increasing other people’s proportionate share.
“I think the biggest issue that people are facing is not District 65’s referendum,” said Mr. Suffredin. “It’s that their assessment is much higher than it was a year ago.”
D65’s Increase in Property Taxes
During the Referendum process, District 65 estimated that the Referendum would increase a homeowner’s property taxes by 5.8%. District 65 Superintendent Paul Goren told the RoundTable the actual increase was 5.88%.
The table below shows the total amount of approved property taxes levied by the City of Evanston (including the Library and General Assistance program), School District 65, and School District 202 in 2015 and 2016, and the dollar and percentage increase. The taxes levied in 2015 were paid in 2016; taxes levied in 2016 are paid in 2017.
The property tax levies for the City and School Districts 65 and 202 account for about 86% of Evanstonians’ total property tax bills. The remaining 14% is levied by at least eight other taxing bodies. The taxes levied by the Metropolitan Water Reclamation District of Chicago, Cook County and Oakton Community College make up the lion’s share of that 14%.
As shown in the above table, the total increase in District 65’s levy was about $16.1 million or about $1.6 million more than the Referendum amount of $14.5 million. The levy of about $1.6 million was permitted under historical tax caps, and is tacked onto the Referendum amount. Dr. Goren told the RoundTable that District 65 calculated that the increase in the total property tax bill due solely to the Referendum is 5.88%. Using a different methodology, the RoundTable estimated the impact at 5.89%.
Mr. Suffredin noted that many residents’ share of Cook County property taxes went up significantly. He said, though, Cook County has levied the same amount of taxes, $720 million, since 1994. The increases are thus due to the reassessment of properties, not to an increase in the levy, he said.
Increases Felt in the Second Installment
According to the Cook County Treasurer’s Office, the first installment property tax bill is exactly 55% of the previous year’s total property tax bill. The second installment property tax bill thus reflects increases in property tax levies, changes in assessed value, and other factors.
Because of the way property tax installments are calculated, the full amount of the increase due to District 65’s referendum and the full amount of any increase due to the reassessment of property values were billed in the second installment property tax bills for 2017. In subsequent years, the impact of the referendum will be more evenly split between the first and second installment bills.
New Appeal Period
On Aug. 1, an appeal period opens for the 2017 assessments, Mr. Suffredin said. “Anybody who feels that they should have appealed before and didn’t, there is an opportunity to do it.” He said his office will be sponsoring a seminar on Aug. 3, with information on how to appeal.
Editor's Note: Thie article originally reported that the RoundTable's calculation of the increase in taxes due to the Referendum was 5.99%. The correct number calculated by the RoundTable was 5.89%. The RoundTable reqrets the error.