The heated campaign for Cook County Assessor reveals why both ethics and tax reforms are needed to reduce the property tax burden in Chicagoland.
The Cook County assessor has enormous power, yet almost nobody knows what the office does. That's slowly starting to change, given the media fascination with the heated battle between Democrat Joe Berrios and Independent Forrest Claypool to fill the post this election cycle. With the election just days away, the latter candidate is going on the attack using an aggressive (and interactive) new campaign tool.
First, to understand why this race is important, it's crucial to understand what role the assessor plays in the life of Cook County residents. Simply put, he or she helps determine how much we pay in property taxes. By tracking property sales and other housing market factors, the office estimates the value of each property in the county. When the value is high, your bill (or that of your landlord) grows. When it's low, the bill shrinks.
Assessing every single parcel of land in Cook County is no walk in the park. As the Reader's Ben Joravsky and others have written before, it's a system that relies on human calculations and is susceptible to error. To amend a mistake, a property owner can appeal the decision before the three-member Board of Review, where Berrios has worked since 1988. It's not the easiest process in the world, so those who want to go through with it often hire a property tax lawyer to help guide them through the proceedings. And that's when critics say the Democratic nominee works his magic on behalf of wealthy clients.
As the Better Government Association and Chicago argued in its lengthy piece about Berrios' tenure, "the Board of Review ... is an opaque operation dominated by a tight circle of politicians and tax attorneys." Essentially, 15 law firms handle virtually every appeal that's argued. In 2009, the board granted $6.2 billion in reductions. Of that total, research conducted by the Claypool campaign contends that 92 percent went to clients of attorneys who have contributed to one of Berrios' political campaign committees between his first public election in 1982 and the middle of 2010. He cuts their property tax bill, in other words, and they reward him with a donation.
The campaign is presenting the data on an innovative website that uses Google Maps technology to highlight some of the largest cases. By clicking on the map that shows the heartiest 2009 reductions in Chicago's Loop, one can see that Willis Tower, for example, had its property assessment cut by $10.5 million last year. The firm representing the commercial client -- O'Keefe, Lyons & Hynes -- has chipped in over $60,000 to Berrios. "This is the official Cook County map of clout," Claypool said at a press conference this morning. Watch:
For every $1 that a homeowner or small business won back during the appeals process this year, Claypool's camp found that large commercial buildings (with the means to hire connected property tax lawyers) saw $9 in savings. And the total number of reductions creates a "tax shift" onto regular joes, who must refill the coffers of local taxing bodies with new revenue after the big boys win their breaks. Claypool pegs the figure at $986 million, although his calculation is imperfect; he factors into his baseline every reduction granted this year, which certainly includes some legitimate appeals. Still, until clout is taking out of the system, he says, it's impossible to know how many property owners are gaming it:
What would Claypool do differently? Most importantly, he's vowed not to take any campaign contributions from property tax attorneys. He also said he would work to engage regular people without connected friends in the appeals process through outreach. "It's not nuclear physics," he said. "It's simpler than people are lead to believe."
Berrios, for what it's worth, claims Claypool is a hypocrite for taking contributions from both wealthy individuals who own property and from retiring Assessor James Houlihan, who himself has not sworn off property tax attorney money yet and has donated $120,00 to the Claypool team. "Houlihan takes contributions from anyone -- including property attorneys and real estate developers -- and he then turns that money over to Claypool," Berrios said in a statement this morning. "Allowing Houlihan to be one of the largest funders demonstrates that Claypool isn’t being straight with voters."
Berrios has also noted before that he supported legislation passed in Springfield to preserve temporarily the current $20,000 property tax exemption for Cook County homeowners, but wants to see revoked a controversial provision forcing seniors to reapply for the tax relief every year. (The full back story on the homeowner exemption is here.)
It should be mentioned that neither candidate can lower taxes dramatically for Cook County homeowners. While corruption is easy to write about (and campaign on), two structural problems keep the local property tax burden high. The first is the state's ludicrous tax structure. Illinois' flat (and low) income tax rate, combined with an outdated system for taxing goods and services, means the state relies far too heavily on property taxes to fund schools and social services. It's a problem progressive budget experts and Assessor Houlihan himself has made repeatedly over the years. (The current version of HB 174 -- the tax reform measure passed by the Illinois Senate in 2009 -- would double the state's property tax credit, from 5 to 10 percent, as well.)
In Chicago, that problem is compounded by the Daley administration's reliance on tax increment financing (TIF) for development. From our post on property taxes in February:
Every time local governments create another TIF district to repair blight (or reward connected interests), revenue that would otherwise pay for schools, parks, and other public bodies is diverted into the city's TIF budget. In Mayor Daley's case, it's over 90 percent of his total tax bill. Those taxing bodies then have to raise their own tax levies to make up the difference. The Property Tax Reform & Relief Task Force has already recommended that the General Assembly review the state's TIF statutes. If action is taken to rein in the TIF network -- particularly in Chicago, where it has grown wildly under Mayor Daley's stewardship -- local officials won't need to raise rates nearly as often.
After November 2, whoever wins the assessor's race should hammer home the importance of these two issues. They'll certainly have a large platform from which to do it.