About those COVID-19 assessment adjustments...
May 14, 2020 5
Weeks ago, the Assessor's Office said Cook County real estate owners could expect a "COVID-19 adjustment" to be applied to property values later this year. "No action or appeal is necessary for eligible properties to receive this adjustment," representatives wrote in a release posted to the Office's website.
These are honest and appropriate measures for any valuating agency to take, faced with a situation like this. However, the statement itself is misleading in that invites readers to expect a break on their 2020 property tax.
In fact, it seems like the opposite is almost unavoidable. Let's briefly discuss why.
Adjustments for all mean nobody pays less property tax. These concepts are, really, as the Cook County Clerk's Office likes to phrase it, "Property Tax 101."
Our County and State budget obligations aren't going anywhere. Therefore, broad-based devaluation of the kind being spoken of only necessitates a proportional tax rate hike, as the County's 30 individual Townships and zany hodgepodge of taxing districts struggle—as they do on an average year, nevermind 2020—to meet their levies.
And that's before we even account for the shortfall in commercial tax revenue, which, already guaranteed, is the scariest factor at play in all of this.
Under a government-ordered lockdown, when many businesses have been forced to limit or totally suspend operation, the commercial share of the overall County levy must shrink. This is because commercial real estate is not, like your home, taxed on the estimated market values of the building and land, but rather its expected income.
Many if not most businesses, therefore, will be well-entitled to significant tax reductions, commensurate with the unprecedented loss of revenue this virus has wrought. As a result, businesses are going to pay untold collective millions less into the pot. This leaves homeowners in the position of having to bridge the gap—a position this County's residential owners have resignedly grown accustomed to.
Residential 2020 tax bills, then, could conceivably rise, even as your property's assessment receives the promised "adjustment."
The Assessor's Office deserves praise for not only soldiering on but attempting to accurately and equitably reflect the realities out there. As County Assessor Fritz Kaegi said, "It's the right thing to do."
But let's not pretend the steps being taken are tantamount to tax relief. That shoe has yet to drop.
This is part one of two. Next, we'll look at what happened to property tax bills after the 2008 subprime mortgage crisis.