Oak Park Township assessor: Property tax protections failed
Oak Park Township Assessor Ali ElSaffar explains a tax bill to Bob and Stacia Taylor. The Taylors saw the tax bill on their condominium rise 19.3 percent. | Bill Dwyer~Sun-Times Media
Updated: August 13, 2012 1:34PM
A combination of a seriously depressed housing market and the effect of a triennial reassessment of properties in Oak Park and River Forest has left many homeowners with daunting double-digit tax increases.
Oak Park Township Assessor Ali ElSaffar is hearing from many of them. There are several reasons, he tells them, but mostly, they’re victims of a flawed tax system.
“Because it’s an assessment year, the bills are all over the place,” ElSaffar said.
While the overall property tax levy in Oak Park rose just 3 percent, amounts reflected on individual tax bills have been much higher in some cases.
One woman’s property taxes rose 33 percent, ElSaffar said. And many senior citizens are seeing nearly 20 percent increases.
Those increases are all the more troubling in light of home values having fallen between 25 and 40 percent in the two villages the past three years.
ElSaffar said there are several reasons for the inflated tax bills, and local governments aren’t the main reason.
Besides the historical instability of individual property tax bills in a reassessment year, he said there are two major causes for the current bills. The first is a tax system not designed for a down housing market. The second is, ironically, falling home values themselves.
Property versus income
ElSaffar said people have been struggling with the disconnect between such taxes as income and sales taxes, and real estate taxes.
“It’s difficult for a taxpayer to grasp that their home value can go down and their taxes go up.”
“With the income tax, you make less money, you pay less taxes,” ElSaffar said. “Same with the sales tax. Buy less, pay less.”
Property taxes, on the other hand, are based solely on the collective tax revenues requested by the 17 taxing bodies than levy on Oak Park taxpayers. The only question left after Cook County approves the final levy amount is how that tax pie will be divided up.
“Property taxes are designed to raise a certain amount of money for governments,” ElSaffar said.
In the case of Oak Park, that levy amount for 2011— payable this year — is $168 million.
Vulnerable hit hardest
“What we’re dealing with here are programs that aren’t designed for a falling market,” ElSaffar said. “They were all designed based on the assumption that property values would only go up,” ElSaffar said. “They worked pretty well with property values going up, but they’re not designed to work with property values going down.”
Some of the most negatively affected homeowners have been senior citizens who in prior years were protected by a “senior freeze” exemption, and lower income homeowners who previously benefitted from the Long-time Occupant Homestead Exemption (LOHE).
“Those seniors were supposed to have some protection from big tax increases,” ElSaffar said. “That whole program has been turned upside down.”
The problem lies in what the senior freeze actually freezes.
“The senior freeze does not freeze a senior’s taxes,” he explained. “Instead, it freezes the equalized assessed value of the property. That is then multiplied by the tax rate to determine the bill.”
Oak Park’s unfrozen tax rate rose 19 percent this year, sticking most seniors with at least that high a tax hike.
The same holds true for the Long-time Occupant Homestead Exemption, which was designed to protect people from soaring taxes stemming from rising home values.
While a homeowner may have lived in the house more than 10 years and had annual income within the required range, the value of the home dropped below a price qualifying them for the program.
Good for governments
ElSaffar said local governments enjoy a stable revenue source through property taxes, and that stability should be reciprocated to taxpayers.
“People would like some stability,” ElSaffar said. “Most people can accept small increases. When people get mad is when they get sudden shocking increases.
“They can accept 2, 3, 4 percent, but 25 percent?” he said. “It’s reasonable to expect that government should find some stability for such a large bill.”
ElSaffar said “a few years ago” he worked with state Sen. Don Harmon, D-39th, on a property tax system proposal “that would work in both a down market and an up market.”
“It didn’t go anywhere,” he said. “No one was interested.”
What you can do
ElSaffar said those hit by large tax increases have limited options.
First, check to make sure you got the exemptions to which you were entitled.
“If you didn’t get your senior exemption, call me,” ElSaffar said, “or if you’re missing your standard homeowner’s exemption.”
“If a homeowner got all they’re entitled to, there’s not much we can do this year.”
For next year, however, ElSaffar said, “File an appeal.”
ElSaffar said Oak Park Township is open for appeals in late July.
The Board of Review will hold a forum on tax appeals at 7 p.m. July 30 in the auditorium at Percy Julian Junior High School, 416 S. Ridgeland Ave., Oak Park.