Cook County assessor argues appeals rulings are undoing taxpayer equity efforts
A Cook County assessor's report on 2019 property reassessments in the North and Northwest suburbs says efforts to improve taxpayer equity and fairness have been undone to some degree by Board of Review rulings on commercial property owners' appeals.
Those properties have been underassessed by an average of 40% in past years, shifting more of the tax burden on to homeowners, the assessor's office argues.
"A minority of people in Cook County use the appeals process, and this minority tends to have the most wealth, knowledge of the system's quirks and weaknesses, and resources to navigate avenues to appeal," Assessor Fritz Kaegi writes in his introduction to the report. "The aggregate effect of appeals from this minority is to reduce its share of the base, thus shifting more of the responsibility for property taxes to everyone else."
But Board of Review Commissioner Michael Cabonargi said Kaegi's pursuit of a preconceived outcome -- that the tax burden should be shifted away from residential properties -- is a fundamental flaw of his argument.
While it's the role of the assessor's office to establish criteria at the macro level, the Board of Review decides appeals based on specific properties and specific circumstances, he added.
"If he's saying people don't have the right to appeal, that's something we're going to disagree on," Cabonargi said. "It's a healthy but natural conflict that we're going to review his work."
Kaegi said his office's efforts to get initial assessments correct must be paired with ensuring the integrity of the Board of Review's appeals process to make sure taxes on Cook County property owners are fair.
"We'll always need the appeals process to identify errors, but the more we can get right at the outset, the more we improve the assessment system for everyone," Kaegi wrote.
The shift caused by reassessments or owners' successful appeals on the value of their properties can have as an effect as great or greater on taxpayers as the initial setting of property tax levies by local governments.
Scott Smith, chief communications officer for Kaegi, said the office has a statutory requirement to assess at market value to ensure equity throughout the county. The new report provides data confirming other third-party reports that the office's assessments are in line with the market, he added.
"The International Association of Assessing Officers examined the state of commercial assessments as of 2018, which were produced by the (prior Joe) Berrios administration and adjusted by the Board of Review," Smith said. "It found widespread, substandard, and systematic undervaluation of commercial properties -- of about 40% overall in Cook County -- shifting the property tax burden to homeowners and small businesses."
During Kaegi's two years as assessor, the office has been working to close gaps in the residential assessment process that previously kept them from being equitable, Smith said.
"We believe we're doing the same on commercial assessments, but the Board of Review approved large-scale reversals of our work last year, which transfers more of the burden back onto homeowners," he added. "It also prolongs the inequity in the property tax system the IAAO identified."
Cabonargi noted that not every commercial property in Cook County is a Chicago skyscraper. Among the appeals the Board of Review considered last week were for a hot dog stand and a barbershop.
All three Board of Review commissioners consider each appeal individually and at least two of them need to agree for an appeal to be successful, he said.
Smith said the Board of Review should demonstrate more transparency in its decisions on successful appeals.
"For full transparency and accountability, we think the public deserves to know how the Board of Review plans to close some of these valuation gaps," he said. "Knowing the underlying data and methodology they use will restore confidence and certainty in the system."
But Cabonargi said the reasoning of each Board of Review decision has been available on its website for years, and that it's the assessor's office that's now catching up. He's pleased by the commitment Kaegi has made to increasing transparency, technology and professionalism in the assessor's office, he added.